Surcharge at container terminal flayed

The South India Chamber of Commerce and Industry (SICCI) has slammed the congestion surcharge being levied on the trade at the Chennai Container Terminal Ltd (CCTL), and called upon the government to consider creating a new port facility. SICCI has also suggested creating a new container terminal, preferably at Ennore Port.

The high levels of cargo congestion due to surge in volumes at the Chennai port has lead to the trade having to bear the congestion surcharge imposed by feeder operators.

The surcharge is being levied on vessels thanks to the slower turnaround times and extended stay at the berth caused by higher volumes, SICCI said.

"This practice is only in the interest of the feeder operators and is in total disregard to the interests of other stakeholders of CCTL. The surcharge should be imposed on the creator of the congestion "" the terminal operator "", instead of holding the trade to ransom," SICCI said.

The industry has been up in arms against the move, calling the congestion surcharge an additional burden. Even in the event of the surcharge being absolutely necessary, the industry feels it would be more realistic to calculate it depending on the magnitude of congestion at the terminal.

"Having a terminal at Ennore Port would give the operator abundant freedom to design, develop and tailor a terminal to international standards without any restriction to modify an existing facility."

This facility would be able to accommodate substantial traffic volumes and relieve congestion at CCTL, SICCI said.

SICCI noted that while the sizes of the feeder vessels at CCTL had improved in recent years, the berth occupancy has reduced from 48-72 hours in 2001 to 19 hours in 2006 for vessels of 1,000 TEU capacity and above.

"The reduction in stay to one-third has not resulted in the lesser feeder cost being passed on to the trade. Instead, any additional stay of a day or less has become an opportunity to clamp surcharges without rhyme or reason," SICCI said.

While CCTL's investments to meet enhanced volumes by adding multiples of container handling equipment cannot be ignored, the operational negatives are too many, SICCI said.

The infrastructure in the hinterland was at breaking point due to the surge in goods volumes coming into CCTL, with the bottlenecks in the roads leading to accidents, delays and risks to the lives of citizens, SICCI added.

A SICCI study shows that the terminal handled volumes of around 0.325 million TEUs (twenty-foot equivalent units) in 2001, when the terminal was privatised.

As of December 16 this year, the volumes handled at CCTL crossed the one million TEUs mark. This effectively means that the terminal has registered threefold growth in less than six years, SICCI said, noting that the infrastructure at CCTL had largely failed to keep pace with this growth.

Volumes out of CCTL are expected to touch 1.75 TEU in the next 3-4 years. SICCI alleged that since the management of CCTL was taken over by DP World last year, the terminal has faced frequent work stoppages, go-slow movements by equipment operators, and strikes by CCTL users, greatly damaging export commitments and tarnishing the reputation of the trading community.

While proposals for a cargo corridor exclusive to Chennai Port have been discussed, no serious effort has been visible on this front, SICCI said.

The container terminal at Chennai was privatised and handed over to a special purpose vehicle created by P&O Ports in November 2001. P&O Ports was taken over by DP World in 2006, and CCTL is presently operated by DP World.