Act to monitor shipping trade

The Centre is planning to introduce the Shipping Trade Practices Act to regulate and monitor intermediaries of shipping industry.

Shipping lines and agents, freight forwarders, terminal operators, container freight stations (CFSs) operators, inland container depots (ICDs) operators, Container Corporation of India Ltd (CONCOR), cargo consolidators, transporters, stevedores and shippers will fall under the purview of the proposed Act.

"This will ensure that fair and healthy practices are adhered to and institutionalised in the trade. It will also provide the framework of the consultation mechanism to strike a balance between the potentially conflicting interest of service providers and service users," an official said.

The ministry of shipping (MoS) was in the processing finalising the draft of the Act and would post the same on the MoS website for public comments, the official added.

Asked whether it would be on the lines of the US maritime transport regulator Federal Maritime Commission (FMC), the official clarified that the proposed Act would only ensure transparency by monitoring all activities of maritime transport intermediaries.

Sources said the proposed Act would incorporate provisions of compulsory registration for all maritime transport intermediaries and penalties for not complying with registration norms.

"Procedures and modus operandi for arriving at rates for services provided by intermediaries will evolve through a process of consensus and conciliation," they added.

The government has no plans to intervene in the price-setting mechanism for the shipping industry. But, it would adopt mechanisms to eliminate unfair trade practices and curb fly-by-night operators in the industry.

Earlier, freight forwarders, shipping lines and agents had criticised the move of framing a new legislation, while shippers and exporters supported the concept.

Freight forwarders and shipping lines pointed out that too much of regulation would dampen the interest of the trade, as they already had to deal with several government agencies in the maritime transport.

But, representatives of shippers and exporters claimed that operations of intermediaries were not transparent and that the latter were imposing series of surcharges and levies without proper notice.