The Hindu Business Line : Shippers prefer gateway ports fearing delays

The custom house agents and clearing and forwarding agencies involved in handling export/import of cargo here are a worried lot as shippers prefer booking cargos directly through gateway sea ports fearing delays in securing adequate custodial services, including clearance of customs formalities for exports/imports done at inland container terminals here.

The difficulties in getting adequate custodial services from the designated agencies running the inland container depots (ICDs) apart, the bottleneck in timely transport of containers due to shortage of trailers serviced at these ICDs and also delay in getting the payment of duty drawbacks (the export incentive) released for the shipments cleared from the Customs field formations have encouraged the shippers to opt for the gateway ports, said the officials of the Coimbatore Custom House and Steamer Agents Association (CHAASAAC).

The three ICDs based in Coimbatore are fast losing out the valuable export/import throughputs to the gateway ports due to the operational inadequacies and infrastructure/procedural flaws, said Mr Rajeshkumar, President of the CHAASAAC.

Drastic fall in volumes

As against the average volume of 1,000/1,200 TEUs (twenty equivalent units) of export cargo clocked every month by the three ICDs till a year ago, the volume has plummeted to around 600 TEUs in the past few months.

But the volume of export cargo booked directly for shipment at gateway ports of Tuticorin, Chennai and Kochi from Coimbatore has dramatically gone up and it is estimated at 2,000 TEUs every month, said Mr G. Sampath Kannan, Vice-President of the association.

One of the ICDs here run by the Container Corporation of India, has for example, recorded a lower export throughput of 3,854 TEUs during 2005-06 (up to February 2006) compared to 5,301 TEUs in 2004-05 and 7,125 TEUS in 2003-04.

The Singanallur ICD run by CWC which had clocked 2,513 TEUs of export cargo in 2004-05 has its volume coming down to 1,601 TEUs in the current year (up to February 2006), according Mr V. Subramaniam, former Secretary of the CHAASAAC.

ICD shortcomings

The shortcomings in cargo handling by the transporters engaged by ICDs, non-availability of trailers to lift the containers and delay in completing the customs formalities and the long waiting period for reimbursement of the export incentives, are cited by the officials as the reasons for the shift.

"We used to get the duty drawback payments released at the ICD-based customs authorities for the shipments done within three to four days. Now, it takes three to four months for the shippers to get the export incentive from the Customs department. There are cases when the payment is pending for the past six months. This huge delay in realising the duty drawback has made the shippers divert their cargo booking to gateway ports," said Mr Sampath Kannan.

Similarly, the frequent change in nominating the official transporter for moving the containers by the CWC authorities which led to litigation and the consequent introduction of the `royalty' fee in place of the full custodial charges leviable by the Singanallur ICD authorities has rendered the cargo handling costlier for the clearing and forwarding agencies. In a place like Coimbatore, which lacked good handling infrastructure and the scope for steady flow of volume cargo, the scheme of `royalty' fee will not work for long, Mr Subramanian said.

Possible solution

The CHAASAAC members feel that early introduction of the electronic data interchange by the customs authorities can to bring down the time taken by the Customs authorities for processing export documents and clearing the drawback claims. Engaging multiple transport operators by the ICD custodians would get the benefit of improved/competitive services for the ICD users, they said.

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