New Delhi: The government on Thursday announced steps, including reducing certain charges at ports and purchase of five additional second-hand container vessels by SCI, to resolve shipping sector-related problems of exporters and importers.
These measures were announced after a meeting of all the concerned stakeholders of the international trade segment, including senior officials of ministries like commerce and industry, shipping, ports, finance, civil aviation and railways; apex exporters body FIEO (federation of Indian export organisations), customs officials, freight forwarders, transport operators and shipping companies.
Exporting community and experts have flagged shipping sector issues which are hurting the country’s exports, which have contracted by 9.3 per cent in August. The issues figured in the discussions include container shortage, surge in ocean freight rate and shipping cost, shipping delays at the Indian ports, and turnaround time at the ports.
Briefing media after the deliberations, Commerce and Industry Minister Piyush Goyal said that several issues were discussed to look at addressing the challenges that exporters and importers are facing in the shipping area.
“I am confident that it (decisions taken today) will result in significantly bringing down the shipping cost, improve the availability of empty containers, help faster evacuation of export consignments, and significantly reduce the congestion at ports,” he said.
It was announced that the Shipping Corporation of India (SCI) will “purchase five additional second-hand container vessels” to further boost cargo handling capacity.
The SCI also announced that they are chartering container ships to significantly increase the container capacities, on an immediate basis capacity will be enhanced by 9,000 TEUs (twenty-foot equivalent unit).
The Railway board and Container Corporation announced that empty containers can now be stored at the yard at zero cost for 90 days. The charges of Rs 3,000, that is being levied beyond 90 days, are now halved to Rs 1,500.
Further, the storage and handling rates will be reduced for containers from Rs 9,000 to Rs 2,000 (for a 40 ft container) and from Rs 6,000 to Rs 1,000 (for a 20 ft container).
The Central Board of Indirect Taxes and Customs (CBIC) announced that custom clearances at the ports will be expedited by simultaneous screening of two twenty feet containers.
Further, the shipping ministry said that the port capacities have already been enhanced by 2.3 million TEUs.
Furthermore, the Jawaharlal Nehru Port Trust (JNPT) assured to eliminate any congestion and bottleneck at NhavaSheva port.
It was also decided that private container yards will have to mandatorily register themselves with GST authorities and should not accept any charges in cash in order to ensure illegal profiteering arising out of shortage and delay.
The shipping lines assured that all charges like container transportation and Lift-on-Lift-off at yards would be embedded in the delivery order given to shippers.
Goyal said that the key objective of the meeting was to understand and resolve issues being faced by the exporters and importers in the shipping and cargo industry.
“The deliberations took stock of the emerging geopolitical and economic scenario. Collectively, we made decisions to promote a trust-based working environment for faster processing of cargo during exports,” he said, adding that it was decided to set up a multidisciplinary help desk to support exporters and permit empty containers to be stored in the yard at the Jawaharlal Nehru Port Authority (JNPA).
The minister added that it was also decided to reduce handling and loading costs of empty containers by the Container Corporation of India Ltd (CONCOR); minimising traffic delays near and around JNPA to enhance export-related processes; and implementing simultaneous container scanning at JNPA for faster clearances and reduced turnaround time.
FIEO Director General Ajay Sahai said specific varieties of containers like “Refer, Open top” containers or 45 cubic feet may be in short supply.
“It is the lack of space on ships and blank sailing which is the basic problem. Shipping lines urged to increase frequency and port to reduce turnaround time for them are other major takeaways,” he said.
Sahai added that freight rates have started coming down and are likely to come down further.
“Mundra (Gujarat) to the UK freight for a 40 feet container declined from USD 4,000 to USD 3,200 between July 24 and September 24. SCI is entering into container line space and has started one vessel and five more are expected in the near future,” Sahai said adding that more scanners will be installed at JNP and infrastructure at Mumbai airport shall be augmented for truck docking and holding area.
India’s exports registered a steepest decline in 13-month falling 9.3 per cent in August to USD 34.71 billion due to global economic uncertainties, while the trade deficit soared to a 10-month high of USD 29.65 billion.
Exports during April-August this fiscal increased 1.14 per cent to USD 178.68 billion, and imports grew 7 per cent to USD 295.32 billion.
