Vessel-related charges lowest in Chennai

Of the three contenders for transshipment terminals, Chennai happens to be the most competitive in terms of vessel-related charges for containers, followed by Kochi.

Shipping lines, however, have to shell out the most to call on Jawahar Lal Nehru Port Trust (JNPT), compared with all other Indian ports.

According to estimates made by the Indian National Shippers Association, Chennai's vessel-related charges for a 20 inch container at $15,024 is 33 per cent below $22,700 at JNPT. Kochi charges $15,418 for the 20 inch container, that is again 32 per cent less than that of JNPT.

Chennai and Kochi, have in past one year made efforts to get more competitive, slashing their vessel-related charges by at least 40 per cent, but JNPT has cut the charges only by 35 per cent.

According to a shipping ministry report, one of the reasons for JNPT not to be at par with other ports is because it has to pay service tax on port services and dues to the Mumbai port for the maintenance of the common approach channel to both JNPT and Mumbai.

Jawahar Lal Nehru Port Trust pays around $4,000 more than other ports for a 20 inch container on this account.

The committee on vessel-related charges had recommended last year that the service tax on port services should be withdrawn to make freight charges more competitive.

In addition, Jawahar Lal Nehru Port Trust could also afford to get away with charging more as the port was facing congestion for the past one year, and it would be more than glad to divert the traffic somewhere else, a port official said.

He, however, added that with new private terminals coming up, the port might sooner or later resort to drastic cuts in its rates.