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i-maritime Newsletter

Feeder operators justify trade-recovery charge at Chennai container terminal - 2011-11-07

The Chennai Feeder Operators, a forum representing container shipping lines operating at the Chennai port, has justified the levy of Chennai Trade Recovery charge due to long waiting time for their ships calling at the container terminals. The charge was increased to $200 for a TEU (20-ft equivalent unit,) on October 15 from $65 a TEU in August to compensate for the loss incurred to them due to the delay. The port has been plagued by landside congestion both inside the port and outside with trucks in queue up to 20 km north of the port. “Our members are totally frustrated by the on-going problems in Chennai port and the lack of any progress on infrastructure,” said Mr S.C. Lim of the Singapore-based Henry Noon & Co Pte Ltd, which is the secretariat for the operators, in a statement. Vessel values of up to $60 million now call at Chennai. The cost of delays to schedule impact the charter hire, where daily charters for such vessels can be $20,000.
Also, the operators need to be compensated for vessels staying up to seven days in the port against the usual 36 hours on additional bunker cost consumed. This adds up to daily 20 extra tonnes at sea on the Singapore round voyage equating to an additional $1,30,000 a vessel voyage. Port stays at Chennai Container Terminal (CCT) since mid-August has been averaging five days against the normal 36 hours. Even when one goes back on schedule, there is no guarantee of a window and the vessel may again be delayed. Understandably, with weekly and twice weekly services, the exposure to shipping lines has been huge and this has been going on for some time. At the same time, the terminals have been imposing „carting‟ and „export volume‟ restrictions, which have artificially capped loadings and, therefore, freight earnings. The charge was introduced in arrears. Two weeks ago, the port was completely closed for all movements and, hence, the subsequent introduction of higher charges. Even today the CCT is berthing only two vessels instead of the usual three resulting in bunching of vessels. The CCT is also trying to impose a reduction of 20 per cent on imports, which will again reduce operators‟ earnings that need to be compensated, Mr Lim said. The operators are prepared to have a dialogue with the stakeholders on the charge provided this is linked to improvements such as providing suitable gate access enhancement (at least two gates open 24 hr per day and the lanes increased at Zero gate to three each direction from the current 2 each way); an end to any trade volume restrictions; a return to berthing windows and normal port stay of 36 hours, Mr Lim said.

Source: Hindu Business Line