Chennai Port Trust increases concession for coastal vessels to boost coastal shipping

In a bid to boost coastal shipping and have a competitive edge over private ports of Kattupalli and Krishnapatnam, the Chennai Port Trust (ChPT) has increased concessions for coastal vessels carrying trans-shipment containers that call at Chennai in bigger ships from Singapore or Colombo and go out of the city in smaller feeder vessels to save cost.

Coastal shipping despite being more cost-effective in comparison to road and rail still lags as a preferred source of transportation. As per reports, road transportation cost is ₹2-3 per tonne/km, in rail it is ₹1.2-1.5 per tonne/km, while in sea transport it is ₹0.2-0.3/tonne/km.

As of 1st July, the ChPT has modified the concession offered on vessel-related charges (VRC) for coastal vessels carrying coastal trans-shipment and Exim (export and import) laden trans-shipment cargo.

Now, an upfront concession of 70 per cent in VRC will be offered to coastal vessels carrying 100 twenty foot equivalent units (TEUs), or more, of Exim trans-shipment containers per voyage. And, an upfront concession of 50 per cent in VRC will be offered to coastal vessels carrying either 100 TEUs of coastal laden trans-shipment containers or 100 TEUs of combined EXIM and coastal-laden trans-shipment containers.

According to a trade notice issued by ChPT, the Coastal container ships carrying laden trans-shipment containers can claim any one of the above concessions; no other concessions for coastal vessels can be claimed along with this concession.

Earlier, Coastal vessel were offered a flat 70 per cent concession in VRC exclusively plying between coastal destinations in India and carrying 100 TEUs or more of Exim trans-shipment containers per voyage.

Furthermore, there was a 70 per cent concession on VRC of ChPT Scale of Rates (SoR) for the first 25 voyages per year and a flat 80 per cent concession on VRC of ChPT’s SoR per year from the 26th voyage onwards.

A senior ChPT official said the concession, which will be valid for a year, was in line with the Centre’s plans to boost coastal shipping.

Source: The Hindu Business Line

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