The Hindu Business Line : A master for shipping

NOT SO LONG ago, when the freight market was in the dumps, shipowners were vociferously complaining about their dwindling incomes while shippers silently enjoyed the bonanza in a depressed market. Now that the situation is slowly reversing, the shipping lines are all smiles while the shippers have started making noise. Not surprising though. For, nobody ever thought the freight market would remain depressed indefinitely and that the shippers would continue to have fair sailing.

The complaints of the shippers are many, the most important being their helplessness at the hands of myriad agencies active in port operations. While the THC (terminal handling charge) has been the bugbear, such issues as freight hike, cargo shutouts, cancellation of sailings, all done mostly arbitrarily too, it is felt, deserve attention. The functioning of shipping lines, their agents, freight forwarders, consolidators, stevedores and various other agencies is said to be non-transparent and complicated which leads to the virtual fleecing of shippers on one pretext or the other. The levies are slapped arbitrarily and the cost data in support of the imposts neither furnished nor explained. Often, the currency conversion rates are higher than that notified by the Reserve Bank of India and the Customs authorities. Even state-owned organisations are not spared this arbitrariness.

The Government must, therefore, set up a regulatory body, perhaps on the lines of the US' Federal Maritime Commission, to monitor and control the operation of shipping lines, their agents and others involved in ocean transportation of goods. The criticisms may have some truth, but the shipowners, now swimming in profits after a protracted slump, are defiant. The history of acrimonious relationship between the shippers and the shipowners is long and well-known. Interestingly, the Shipping Ministry too pleads helplessness as it refers to the TAMP (Tariff Authority for Major Ports) order on rationalisation of the THC. The order has not only been rejected by the agencies concerned but also challenged in the court of law. This only suggests that the legal provision for constituting a regulator has to be examined as the Major Port Trust Act, 1963 does not provide for such an authority. The Shipping Ministry has sent the matter to the Commerce Ministry, which has sought the views of the Director-General of Foreign Trade.

No doubt shippers hoping for radical reform will be disappointed. It will be hard to make shipowners and their allies agree to a regulated regime because it is felt that such a regime, even if labouriously tweaked, will inevitably produce inefficiencies and side-effects. Odd though it may seem, the rumble of discontent among shippers can be a hopeful sign of their resurgence after the low following the laissez faire freight market. Various shippers' bodies may now regroup and try to speak in one voice. But this can be useful only if it speaks in a spirit of forward-looking cooperation. The shipowners too must refrain from doing anything that pushes the shippers into the confrontational mode.

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