)
The DP World Cochin is planning to reduce the free period for cargo-laden containers at the International Container Transshipment Terminal (ICTT) in Kochi, a move importers say, would result in paying more for parking their containers at the terminal.
Under the proposal, the average free period is expected to be reduced to three days from the present seven days, starting from April 1 this year. As a first step towards this, DP World had written a letter to the Tariff Authority for Major Ports (TAMP) seeking reduction of free time at the port.
In a letter, India Gateway Terminal Private Limited, the Indian arm of DP World, had cited two issues for this -- congestion at the terminal yard and a recommendation from the department of Customs.
The letter stated the present infrastructure at the terminal had been designed to handle volumes of up to one million TEUs (twenty-foot equivalent units of standard-size container) with a certain expected mix of transshipment containers.
The present high levels of dwell days by import containers have ensured the storage capacity is severely congested. Dwell time is the average time in days that a container stays in the shipyard.
While the ICTT yard capacity is 203,700 TEUs, in 2013, the terminal handled a much higher capacity at 343,930 TEUs and 360,000 TEUs in 2014. This was achieved by higher efficiency and better equipment utilisation, the letter stated.
Consequent to these efficiency initiatives, the yard's overall utilisation has been raised to 366,837 TEUs. The company expects to handle 668,000 TEUs in 2015. With the present dwell time, the terminal will not be in a position to handle higher volumes as the ground slots required would be 3,966, whereas only 2,446 are presently available.
This means after three days, importers will have to remit the required rent for keeping the containers leading to higher import costs.
Already, there have been complaints from the export-import business houses that the rates were much higher at Kochi, when compared with other major international ports like Colombo and Indian ports like Chennai, Mangalore and Mumbai.
DP World also cited a letter from the Customs Commissioner, Cochin, to the chairman of Cochin port, which stated the average dwell time at Vallarpadam was 15 days as against the average of 5-6 days for other ports in the country. The commissioner also referred to the target of three days, set by the Central Board of Excise and Customs, to be achieved by all customs formations in the country by March, 2015.
In the event of this, DP World requested the TAMP to reduce the free period for laden containers, in two phases and this should be attained from April 1, 2015.
The company also wanted to impose rent after three days. It has proposed to charge rates from a minimum of $6.19 for 20 feet containers for eight days and a maximum of $3238.17 for 40-45 feet containers for a period exceeding 15 days.
Sources told Business Standard this may adversely affect the Cochin terminal, as a major portion of the import cargo would be diverted to other ports like Chennai and Mangalore.
He said that the move by DP World will actually ‘ kill’ Cochin port. Though they had targeted 668,000 TEUs for 2015 this will only be a dream if the free time is reduced. During last year the terminal handled only 350,000 TEUs, he added.
