Routing subsidy through Port Trusts will spruce up Coastal Cargo: CONCOR

NEW DELHI: To make terminal operators at ports treat vessels carrying domestic cargo at par with those carrying international cargo, the Shipping Ministry should allow them to charge the same level of tariff from all vessel operators, feels Container Corporation of India (CONCOR).

Vessel operators can handle export and imports or EXIM cargo, or coastal cargo, that is mostly domestic, and pay accordingly. CONCOR is the largest container train operator which also aims to become a large Indian coastal cargo operator.

Priority vessels

As the terminal operators or ports make more money by handling EXIM vessels, many of them tend to prioritise these vessels against coastal cargo vessels when both jostle for same space or facilities of a port.

The Shipping Ministry has already asked ports and terminal operators to charge lower tariffs for coastal cargo vessels compared to EXIM cargo vessels.

“The 40 per cent subsidy should be provided by the landlord port or Port Trust to the terminal operator to prevent the terminal operators from giving lower priority to coastal cargo vessel operators,” said Pradip Agrawal, Director-Domestic, Container Corporation of India (CONCOR).

CONCOR has, in January 2019, started a regular coastal vessel service along India’s coast between ports at Kandla (Deendayal Port Trust) and Tuticorin (VO Chindambarnar Port Trust). It also plans to further expand the service to various ports within and outside India. While coal, steel, cement, fertiliser are already moving along the coast, there is scope to move foodgrain, salt, sugar, tiles and marbles along the coastal belt, said Agrawal

“Different ports or terminals have different strategies when they handle coastal and EXIM cargo vessels. Some ports/terminals provide good services to coastal operators; some do not provide any discount for neither coastal nor EXIM cargo vessels; and some provide high level of discounts even to EXIM vessels to attract vessels and cargo,” Indian National Shipowners’ Association or INSA CEO Anil Devli noted.

In this context, “if the government wants promote coastal cargo, government can say they will bear the extent of discount on charges imposed by ports – such as pilotage (charges for helping move a vessel within/near port) and wharfage (charges for using port’s space for tying a vessel and other operations) – for coastal vessels only,” Devli added. Both ports and terminal operators levy various charges on a ship that calls a port. Broadly, cargo-related charges are collected by the terminal operator, while vessel-related charges are collected by the landlord port, added Devli.

Managing terminals

In a port ecosystem, the terminal operations could be managed by those who own the port like Port Trusts themselves; or by separate companies specialising in handling terminals.

CONCOR’s Agrawal said that ports need to make available some dedicated space for de-stuffing and stuffing cargo. After the cargo is unloaded, it has to be shifted to warehouses that are located over 50 km away, which adds to the time and cost.

CONCOR is in talks with Food Corporation of India for moving foodgrain from North to South or from Punjab to Tamil Nadu.