Terminal handling charges to increase in Kochi from May

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The terminal handling charges at the International Container Transshipment Terminal (ICTT), Vallarpadam, are set to increase from May.

The terminal operator DP World effected a 7.27 per cent hike for some services, citing an order from Tariff Authority for Major Ports (TAMP) dated March 27.

Members of Exim trade sector, voicing their concerns over the hike says that the timing is most inappropriate as the Centre attempts to reduce logistics costs from 16 to 9 per cent to make Indian trade more competitive.

However, DP World has clarified that certain handling tariffs will remain unchanged and some, including transshipment handling charges, will be decreased by 7.27 per cent.

Agreeing that some handling charges remain unchanged from the previous year Prakash Iyer, president of Cochin Port Users Forum said some charges including handling cost of empty boxes; reefer plugging for reefer cargo; port storage handling of all export-import cargo, as well as for coastal cargo including dry and reefers have risen by 7.27 per cent.  

The rise in handling charges for empties would adversely hit exporters with a corresponding increase in ocean freight. Imports are almost 50 per cent less than exports out of Kochi and containers must be repositioned to meet export requirements. The rate increase would pave way for cargo to move out of Kochi to Tuticorin Port, which is almost 60 per cent cheaper, Iyer said.

As per experts while the proposed revision would spare the export/import tariff of dry units, the hike in handling charges of empty unit will impact trade which is already experiencing reduced volumes. It will impact the terminal handling cost of empty units and reefers, which are crucial to the industry. Kochi which is depending, by and large, on equipment repositioning from other ports is repositioning refrigerated containers and 40 feet high cube containers from elsewhere to carry export cargo from Kochi impact the trade.

This hike in rate will also worsen the perception of Kochi being the most expensive port in India and affect the competitiveness of Indian products as the marine product exports is hit by the global slowdown. The high rates in Kochi have already forced cashew exporters in Kollam to shift to Tuticorin Port, experts say.

Exporters have approached DP World, requesting them to maintain the existing tariff, which will help the ailing trade community.

Suraj Muraleedharan, president of Cochin Customs Brokers Association, said that besides the rate hike the trailer crew’s demand for higher allowance would impact traffic movement from Kochi