The increase in Kochi terminal handling fees affects Exim trade

In May, terminal handling fees will increase at the International Container Transshipment Terminal (ICTT) in Vallarpadam. Terminal operator DP World has imposed a 7.27 percent increase on some services, citing a March 27 order from the Tariff Authority for Major Ports (TAMP).

Exim trade sector members expressed concern about the increase, saying the timing was highly inopportune as the center seeks to cut logistics costs from 16 percent to 9 percent in a bid to make Indian trade more competitive.

However, DP World has clarified that certain handling rates will remain unchanged and some, including transshipment handling fees, will be reduced by 7.27 percent.

Some processing fees remain unchanged from last year, agreed Prakash Iyer, President of the Cochin Port Users Forum. But others are up 7.27 percent, including empty carton handling costs; reefer plugging for reefer cargo; Port warehousing for all export-import and coastal cargo, including dry and reefer vessels.

The increase in handling fees for empties would burden exporters with a corresponding increase in sea freight. Imports are almost 50 percent less than exports from Kochi and containers need to be repositioned to meet export demands. The rate increase would pave the way for cargo to be shifted from Kochi to Tuticorin Port, which is nearly 60 percent cheaper, Iyer said.

Binu KS, President of the Kerala Steamer Agents Association, said that while the proposed revision would save export/import duties on dry units, it would impact handling costs for empty units and reefer containers, which are critical to the industry. Kochi largely depends on the repositioning of equipment from other ports. Reefer containers and 40ft high cube containers are repositioned from elsewhere to transport export cargo from Kochi. Therefore, the proposed increase in the empty unit handling fee will impact trading, which is already experiencing reduced volumes, he said.

Alex Ninan, President of the India-Kerala Region Seafood Exporters Association, said Kochi was already known as India’s most expensive port and the proposed rate hike would degrade perception. The global slowdown has hit seafood exports and any rate increase would hurt the competitiveness of Indian products. High rates in Kochi have already forced cashew exporters in Kollam to relocate to the port of Tuticorin, he added.

“We are reaching out to DP World with a request to maintain the existing tariff, which will help the ailing trading community,” Binu said.

Suraj Muraleedharan, president of the Cochin Customs Brokers Association, said that alongside the rate hike, trailer crew demands for higher allowances would affect Kochi’s traffic. Source: business line

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