Mumbai: Shipping lines calling at India’s biggest grain handling port located at Kandla on the western coast will have to pay between 15% and 50% more for docking at the port to load and unload cargo, after the tariff regulator for the Union government-run ports approved a hike in vessel related charges.
These charge, individually called port dues, pilotage and berth hire (collectively these are known as vessel related charges) constitute a major expense for shipping lines entering an Indian port.
The fees are payable by the shipowners to the respective ports and are levied on the basis of each ship’s cargo carrying capacity.
A hike in calling costs is typically passed on by the shipping lines to users and results in higher expenses for exporters and importers. Kandla Port had last year sought approval from the Tariff Authority for Major Ports (Tamp) to hike the vessel related charges, arguing that it was losing money since costs had gone up after the last rate revision in April 2002.
“In view of the deficit position reflected in the income cost analysis submitted by the port, this authority approves a 15% hike in port dues and pilotage, and a 50% hike in berth hire charges at Kandla,” a 12 June note issued by the tariff regulator had said.
The tariff hike is not applicable to the Vadinar division of Kandla Port and its satellite port at Tuna. Pilotage fee covers the cost of piloting the ship to an allotted berth, provision of required number of tugs/launches for inward and outward movements, and shifting from a berth to another once, within the port’s harbour.
The new rates will remain in force for three years till 31 March 2010, said Tamp.
Faced with higher calling costs, shipowners have threatened to call at other ports.
This could hurt Kandla’s revenues. The port handled 52.98 million tonnes of cargo, mainly foodgrain, fertilizers, timber, container cargo, and petroleum, oil and lubricants in the 12 months to March 2007.
“Any rate increase would divert the traffic to other neighbouring ports, thereby reducing the revenues earned by the port,” said an official with container feeder operator Shreyas Shipping & Logistics Ltd, who did not wish to be identified.
However, executives at Kandla Port said that the rate hike was “minimal” and was less than the rates prevailing at neighbouring ports.
“Even with the proposed 15% hike in port dues and pilotage, and a 50% hike in berth hire charges, the rates at Kandla Port are still lesser than the rates levied at the neighbouring ports,” said H.C. Venkatesh, traffic manager, Kandla Port. “Besides, the port has only resorted to a minimum rate hike at a time when the vessel related charges require a hike of over 100% across the table to break-even,” the official added.
Compared with international ports, vessel related charges are high at Indian ports, said Sudhir S. Rangnekar, president, Association of Multimodal Transport Operators of India and a former director of liner and passenger services at state-run Shipping Corporation of India.