Wednesday, September 24, 2014

Unshackle major ports to compete with private ports


Edit piece in Port Wings latest issue: 

There are 12 major ports including Kamarajar Port (erstwhile Ennore Port), India’s first corporate port registered under Companies Act, 1956. All of them are controlled by Tariff Authority of Major Ports (TAMP) who regulate all tariffs, both vessel related and cargo related, and rates for lease of properties in respect of Major Port Trusts and the private operators located therein.
On the other hand, our country has over 180 minor ports, which are oflate re-christened as non-major ports.
Presently, major ports account for 58 per cent of total cargo, while non-major ports are handling 42 per cent. In 2000-01, non-major ports handled just 10 per cent of total cargo. However, scenario has changed in last one decade.
The growth shows that non-major ports have grown exponentially over the years and the major ports have failed to garner more cargo.
While the record book may say it was sheer efficiency and productivity of non-major ports to record such growth in short time, the reality is totally different.

According to maritime experts, it was a fight between a free man (non-major ports) and a shackled lion (major ports).

Adani Port (Mundra), a non-major port in Gujarat, came into existence more than a decade ago. It has now established itself as a major port in terms of cargo volume and challenges other major ports in the region.
Likewise, Kamarajar Port, which runs as a corporate entity, has more flexibility in decision making than other major ports governed by Major Port Trust Act, 1963.  

While non-major ports (private ports) have a free hand to decide on port, cargo related charges and development projects, major ports are literally at the mercy of TAMP and every single decision on such matters has to be approved by the authority thus making it difficult to stay in the competition.
Without a level playing field, non-major ports have attracted, rather eaten away considerable cargo from major ports and registered themselves as efficient ports.
With the gap on loss of cargo widening rapidly, major ports have started pleading before the Union Government to do away with TAMP to remain in positive trajectory.
Though the previous UPA government relaxed TAMP’s claw from new PPP projects in major ports  finalized after July 2013, chorus for a total liberty from the authority by 12 major ports is growing day by day. And the new NDA government is seized of the matter.
The recent plain speak by Shipping Ministry top official on TAMP’s existence clearly denotes that the message has reached its crescendo and outcome is sooner.
But when is the million dollar question.

Shattered dreams: DG Shipping sleeps on DNS cadets’ future


With no option for mandatory sea-time training in sight, future of over 3,000 Diploma in Nautical Science (DNS) cadets, who were left in the lurch by their institutes, Indian Maritime University (IMU) and the Directorate General of Shipping, is getting darker day-by-day.
Though the DG Shipping took initiatives to provide sea-timing to those affected DNS cadets by entering into an MoU with the Directorate of Shipping Services, Andaman & Nicobar Islands, nothing had fructified even after a year.
While the DG Shipping ensured that there won’t be any such trouble for those students joined DNS course post-2013 with a mandatory “sea-time training sponsorship” condition, the directorate has conveniently forgotten the plight of those 3,000-odd, who are in search of sea-time training on their own for last four years.

The course is a six-semester (three year) programme constituting three stages. Initially, a student is admitted for the one year residential (two semesters) pre-sea course and on completion of I & II Semesters, the candidate will be awarded Diploma in Nautical Science (DNS).
This diploma programme is followed by one and a half year (3 Semesters) on-board ship training and after successful completion of the same, a candidate is awarded Advanced Diploma in Nautical Science (ADNS).
After completion of the on-board training, the sixth semester constitutes “Second Mate Certificate of Competency” awarded by the Director General of Shipping and simultaneous award of B.Sc., (Nautical Science) degree.
The DNS issue began in 2009, when the Directorate General of Shipping came out with an order (M.S. Notice 21 of 2009) in May, 2009, proclaiming that decision has been taken to allow the Indian Maritime University to start the Diploma in Nautical Science [DNS] programme leading to B.Sc degree in Nautical Science from August, 2009 onwards on the same lines as the DGS-IGNOU programme which was promulgated through Training Circular No.20 of April 2004.
When the DG Shipping came out with the order allowing IMU to conduct the course, they failed to read the job-market conditions in the maritime field that was withering out after an economic meltdown in the global market.


After the opening of the maritime training to private sector in 1996-97, there has been mammoth growth in number of maritime training institutes conducting pre-sea courses, and as on date more than 100 institutes are approved for conducting various pre-sea training courses of both the discipline -- Nautical and Engineering.


As the issue started to reach the doors of DG Shipping, they went on a detailed review on the approved intake of pre-sea courses against the training berths (sea-timing) availability and it has revealed that the intake capacity created for pre-sea courses significantly exceeds the training berths actually available.
During that review meeting, DG Shipping has expressed concerns that the large and rapidly growing backlog of trainee officers who have completed their pre sea courses, but are unable to get the training berths on board ships – a prerequisite for their Certificates of Competency in the entry grade, is really a matter of serious concern.


As the DG Shipping felt that the situation is getting out of its control, it has initiated action by imposing a restriction on new approvals/ increase in capacity of the one year DNS course in 2011.
Besides, the maritime institutes also expressed their apprehensions that the effect of elusive sea-timing for trainee cadets could spell doom on their future.Though DGS implemented the plan to limit the damage on wannabe seafarers, IMU and its affiliated institutes continued to admit students in DNS course.


According to DG Shipping sources, the Directorate in 2006 came out with a training circular to put the onus on the training Institutes to obtain training slots at the end of the graduation, failing which they should compensate the student by return of his fees spent.
However, DGS circulars in 2007 and 2008, possibly with pressure from institutes, modified the whole strategy of putting the responsibility on the training institutes to tie up with shipping companies to get training slot for their cadets.
Since the DGS “strong orders” remained only on paper and not enforced in letter and spirit, a few institutes flouted every orders. They not only admitted students to DNS courses, but also put the onus of sea-time training on the very students, who joined the course with great expectations.


Speaking to Port Wings, one of such cadets, who completed the DNS and now stuck in the middle without the sea-time training, said that most of the institutes while admitting the students had promised of linking them with those shipping companies who provide slots for students to complete sea-time training on their ships.
“However, many of them went back on their promises and literally forced the students on streets and search for sea-time training on their own,” lamented the cadet.


Taking corrective measures to secure the future of new students joining DNS course, DG Shipping in 2013 announced that admission to DNS stream hereafter could be done only after the presentation of sponsorship certificate from shipping companies by the candidates.
Though the measures secured the future of those new DNS students, absence of any strong measure to provide sea-time training for those 3000-odd cadets irks them.
“The authorities failed to understand our plight, which is drifting further with that new system, where the shipping companies would naturally prefer the fresh candidates than the out-of-touch cadets for sea-time training,” one of the dejected cadets told Port Wings.

Friday, September 12, 2014

New diktat from Plant Protection puts exporters, importers in a fix


Port Wings News Bureau:

While the EXIM trade, especially the exporters and importers of agricultural products in the country, are already reeling under number of bureaucratic hurdles placed by the Directorate of Plant Protection, Quarantine and Storage, a latest circular from the directorate notoriously nailed the last nail on the prospects of stakeholders.

In a latest circular dated Aug 28, 2014 and implemented from Sept 2 onwards across the country, the directorate informed all the stakeholders that as per the direction of the Plant Protection Adviser, the exporters/ importers or their Custom House Agents (CHA) to apply/submit the documents for issuance of Import Permit/ Import Release Order / Phytosanitary Certificate one day in advance, before inspection by Plant Quarantine.
“Subsequently, the posting of PQ Inspectors will be done one day prior to inspection,” the circular further added.
According to estimates, about 16,000 containers (TEUs) of agri-products like maize, wheat, rice, groundnuts, chillies, coconut fibre and cocopeat are being exported to different countries through Chennai Port every month valuing into several crores. Likewise, about 6000 TEUs of timbers, wooden logs, different types of pulses, variety of fruit items and perishable goods are being imported via Chennai Port every month.
For exporting or importing such agri-products, PQ department is mandated by the Ministry of Agriculture to give clearances in the form of certificates.


According to CHAs, the latest order would further delay the PQ inspection process, which has been already stretched to few days, instead of hours, now.
Speaking to Port Wings, a regular agri-products exporter from South India, said that the implication of the latest mandatory “one-day in advance application” circular would be far reaching and they would be forced to shell out more foreign exchange in the case of clearing import consignments from CFSs.
“In Chennai, the office of the Plant Quarantine is located on the other side of the city and all the CFSs are located on another corner of city. In such circumstances, getting the PQ officer on spot for inspecting the cargo is a daunting task,” the exporter added.

“Even if the PQ inspector convinced with the samples and wanted to issue the necessary certification, the officer need to return back to his office, located on another extreme corner of the city, for issuing the certificate. Again, the process stretches to days instead of hours,” rued the exporter.


According to traders, setting up of a dedicated PQ office at Chennai Port would reduce the problem to a certain extent.
It may be noted that PQ office was located in Royauram till 1999. Due to various reasons, including the construction of a spacious lab, it was shifted to Meenambakkam, near Chennai Airport.
If the Government of India is really concerned with the growth of export or import of agriculture commodities, they should immediately shift the PQ office from Meenambakkam to Chennai Port, which could be a permanent solution to the whole issue, traders said.

Thursday, September 11, 2014

Tardy Chennai Customs hamper Chennai Port’s growth: Trade


Port Wings News Bureau:

Chennai Port, which is ranked second among the Centre-run major ports in country in handling containers and has weathered several storms over the years, is now passing through a period of uncertainty due to lackadaisical attitude of Chennai Customs.

Though the port has big ambitions to become a top container handling port in the country by improving its productivity, the sheer inefficiency of Chennai Customs to facilitate seamless cargo flow via the port could derail its ambitious plans, warns EXIM fraternity.

With the Madras High Court banning the handling of dusty cargoes like iron ore and coal at the port few years ago citing environmental concerns, the port management zoomed its priority to three Cs  - Containers, Cars and Clean cargo -- to remain in positive trajectory.

For the past few years, the port embroiled in severe trailer congestion and the mainline shipping liners, at one point of time even imposed hefty Chennai Trade Surcharge for moving boxes from Chennai. However, the port management managed the congestion issue by taking several infrastructure projects and now has a perfect system in place.

Chennai Port & Congestion:

It was widely believed among the EXIM trade that the Chennai Port management alone responsible for the trailer congestion issue. 
Though they had a share in it initially, the management took several corrective measures like streamlining movement of container trailer vehicles inside the port premises, widening of internal roads, opening of more points for entry and exit at main gate.
With these measures, the port management absolved its name from the whole issue and sought the cooperation from Central Industrial Security Force (CISF) personnel and the Chennai Customs for speedier movement of containers.

When the internal assessment by top CISF authorities in the port pinpointed that their personnel posted at the main gate also taking time to check each and every details on shipments, they worked out new strategies for checking and now it has also been properly streamlined.
While the port management and the CISF adapted to the demand given the importance of EXIM for the sustained economy, it is the Chennai Customs, which is still adamant to play the real facilitator role.

Inefficiency of Chennai Customs:

Speaking to Port Wings on a condition of anonymity, an exporter said that the officers of the Chennai Customs should change their attitude towards EXIM community and until unless they change their work culture, growth of Chennai Port will remain in limbo.
Chennai Customs cannot hide their inefficiency anymore behind the oft-repeated term of officers-shortage. Government of India brought in the Customs Department for facilitating the trade and not to remain as hindrance to the EXIM growth in Chennai,” the exporter added.
“Chennai Port had so far successfully managed frequent labour problems, severe congestion of container trailers and even environmental issue over the years. But the attitude of Chennai Customs Officers is something they are unable to grapple with,” another regular exporter told Port Wings.

Chennai Port’s interim proposal:

To overcome the shortage of Customs officers, as it badly affected the Chennai Port’s prospects, the Chennai Port management at one point of time had taken steps to place its officials on deputation to help speedy verification of shipment documents along with Customs officers. However, the CBEC Board shoot down the proposal citing statutory powers.

Tardy documentation process by Chennai Customs:

According to field-level representatives of Chennai Custom House Agents, the numbering of bills, which were earlier done within few hours, now takes up to even four days. Speaking to Port Wings, a representative said that the officers at Customs department, whose primary work is to facilitate the EXIM trade, are actually forcing the exporters to shift to other ports.
“I really don’t understand the rationale behind the inordinate delay by Chennai Customs for numbering bills. In other Customs Commisinerates, the bills are fast numbered and even cleared within 48 hours,” lamented the CHA representative.

Short visits by Customs officers to nominated CFSs for clearing bills:

While documentation of bills shows the real attitude of Chennai Customs officers against the trade, their short visits to nominated Container Freight Stations (CFSes) denote Customs’ work culture.According to freight forwarding agents, the nominated Customs officer never comes to the CFS on stipulated time. Instead, they force the clearing agents to wait for hours at the CFS for clearing bills. Agents rue that the officers treat the EXIM fraternity as their slaves and never listen to any suggestions to speed up the clearing process.

Kings inside Port premises:

While the documentation process and visit to CFS by Customs officers show their two sides of working culture, they act totally different inside the Port premises.
According to a port source, recently, a representative of one of the two terminals in the port made a complaint to higher officials (at Customs commissionerate) that the Customs officers posted there were lethargic in their work thus forcing container-laden trailers to wait for hours outside the terminal. Irked over the complaint to higher officials, Customs Officers posted the terminal started go-slow and a representative (of the terminal) was forced to apologize to them to bring back the document verification process to normalcy.
“This is the state of officers posted inside the port premises and they act like kings and all others are their slaves,” rued a transport operator.

Appeal to the Prime Minister

While the Prime Minister Mr Narendra Modi exhorting the EXIM community to demonstrate their grit and export more products, the attitude of Customs Officers (in Chennai) defeats the very purpose. Until the attitude of such officers’ change, Mr Modi’s vision to improve exports from country will not change much. When contacted for their response, no one from the Chennai Customs Commissionerate was available for comment.



Port Wings News Bureau:

The road freight transport segment is at critical juncture now and the new government at the Centre led by Mr Narendra Modi should take concerted efforts without any delay to keep alive the fragmented sector, which had been badly let down by the previous UPA regime, Mr R Sugumar, former spokesperson & member of All India Motor Transport Congress (AIMTC) and president of Tamil Nadu Lorry Owners Federation, has said.

In an exclusive interview to Port Wings, Mr Sugumar, a well-known face in the road freight transport sector spoke about the status of road freight transporters, scarcity of trained drivers, lack of security for truck drivers on highways and perennial hindrances for freight vehicles on road.

Excerpts of the interview…

Q. Tell us about the present condition of road freight transport segment?

Mr Sugumar: “There is nothing much to cheer about the sector, which is considered to be the backbone of Indian economy. Barring a few big players, the entire road freight transport segment is in doldrums. Small players with few trucks are falling prey to the ever increasing cost of capital expenditure and moving out of the field with heavy losses. That’s why, we are for a secured industry status for the unorganized segment.”

Q. What has been ailing the road transport sector?

RS: “There are several factors ailing the system for the last few years. Starting from inept bureaucracy to burgeoning cost of parts for trucks, the whole chain has literally bogged down the entire segment. In the last three years alone, cost of diesel (fuel for trucks) and tyres has increased astronomically. Besides, insurance cost also increased over 50 percent. On the other hand, freight charges have remained stagnant and it has eroded the meager profit margins for the transporters.

Q. How the Government could lend a helping hand to the transporters to come out of the crisis?

RS: “Whenever the agricultural sector, said to be the backbone of economy, suffers either due to natural calamity or any other factor, both the Centre and state governments quickly intervene and support the sector with incentives. Likewise, road freight transport sector is also forms the backbone of Indian economy. Hence, the governments should take initiatives to analyze the trends in the sector and extend support for rejuvenation of fragile sector.”

Q. Every now and then, we hear about the shortage of trained drivers. What is the real picture now?

RS: “There are three dimensions to the issue of shortage of trained drivers for freight trucks. First of all, it is true that the sector is facing acute shortage of trained drivers. One of the primary factors for the shortage is the stringent clause of minimum qualification of 8th standard for granting driving licence. Due to the condition, many aspirants, who had enough knowledge to read, write and understand signboards on highways but does not have the 8th pass certificate, are unable to get the licence. If the government relaxes the clause, it could help entry of more hands behind steering. The second fact which forces many drivers to skip freight transport on highways is lack of security.  Besides, harassment at the hands of RTO and Police checkposts on highways also dissuades drivers to opt for long distance road cargo movement.”

Q. You spoke about the lack of security for drivers on highways. Kindly elaborate it?

RS: “Highway Robbery was relatively an unknown term in India until late 1990s.With the exponential growth of road freight movement in mid-90s, highway robbers also set their fiefdom along remote highways. In the last two years alone, we have data that about 24 drivers were brutally murdered and their vehicles were hijacked along with goods. According to inputs, an area between Maharashtra and Karnataka border where most of the highway robberies were recorded.”

Q. What is the solution you are suggesting to eliminate highway robberies in future?

RS: “The state and centre should form a special task force in coordination with police department and increase regular patrolling along the deserted highways to deter robbers from set in their foothold along those roads. If the government is able to keep the highways free of robbers, it could help us to persuade more and more drivers to take up the long distance road freight transport service.”

Q: There are reports that more than 2000 container trailer lorries from Chennai alone were seized by financial companies due to defaults in the last two years. What happened to the trailer trade?

RS: “Due to shortage of drivers and regular congestion in Chennai Port, most of the trailer owners in Chennai are unable to earn even for paying their monthly installments for (their) vehicles. The slump in revenue has badly affected their fortunes. As a cascading effect, they were unable to settle vehicle dues on time and it culminated in seizures (of vehicle) by various financial companies. Until unless both the issues—availability of drivers and seamless movement of containers to and from port are solved, the future of trailer owners is uncertain.”
Q. What is your suggestion to end driver’ scarcity?

RS: “The road freight transport is a fragmented industry. It should be given a secured Industry status. Besides, the government should come out with a permanent employment scheme for drivers in the transport sector, as it could help more drivers to opt for long distance road freight transport.”

Q: What is your expectation from the NDA government led by Mr Narendra Modi?

RS: “During the previous NDA regime, they developed several highways and created an ideal environment for hassle-free road-freight movement across the country. They even had a crystal clear policy for roads and even for tolls. However, the successive UPA regime changed everything in favour of their whims and fancies, which ultimately led to nepotism and corruption. However, after change of guard at the Centre, our hopes are high. But nothing much has changed even in the Modi govt. But we are hoping for a change of attitude from Centre.”

Wednesday, September 3, 2014

“ICTT will fulfill the dream of every Indian to have a successful Transshipment Terminal within the country”


Mr K.K. Krishnadas, Chief Executive Officer, DP World Cochin

The International Container Transshipment Terminal (ICTT), the first transshipment terminal in India and the first container terminal to operate in a SEZ, was inaugurated and dedicated to the nation (the first phase of the terminal) by the then Prime Minister, Dr. Manmohan Singh on 11th February 2011.
DP World has set up a state-of-the art container terminal in Cochin to cater to the growing container trade in India. DP world had developed ICTT, on a build operate and transfer (BOT) agreement with Cochin Port Trust for a period of 30 years.
This project will be completed in three phases. In the first phase, the 600 m long quay with a draught of approx 14.5 m with capacity to handle one million TEUs annually. Capacity will expand in line with market demand, increasing to around 1.5 million TEUs in the second phase, once fully commissioned, capacity would be around four million TEUs.

In an exclusive interview to Port Wings, Mr K.K. Krishnadas, Chief Executive Officer, DP World Cochin, elaborated about the terminal and its future plans to become a true Transshipment Terminal of India.

Excerpts of the interview…

Q: It has been about three years since the ICTT was commissioned. How have been the operations over these years?
Mr K K Krishnadas: Operations have been streamlined and most of the processes and procedures have been aligned with International Transshipment Terminals. Our goal is to position ICTT as one of the most efficient Terminals in this region.

Q. When it was conceived, and launched, the ICTT was expected to play a vital role in augmenting the economy of the region, especially that of Kerala. How do you assess the impact the terminal has on the economy after shifting the operations to ICTT?

KKK: ICTT has definitely marked a change from the earlier days. Today the EXIM community in Kerala has access to world a class facility at its doorstep. There is zero delay in shipments, be it exports or imports, and this has given tremendous confidence not only to the EXIM community in Kerala but also to the exporters and importers in our neighboring states.  Ancillary businesses like Transportation, CFS’s, ICD’s, Empty Yards etc ,have started operating thereby adding value to the local community

Q: How many direct shipping  lines operate from ICTT?  How successful have these services been?

KKK: Currently we have four main line services operating at ICTT, the NEMO Service operated by CMA CGM and Hapag Lloyd which is a direct service connecting Kochi to some of the major destinations in Europe, the AME service operated by ZIM Line to East Mediterranean, the CCG Service operated by Simatech and SMILE service operated by SCI, which are direct services to Jebel Ali - the gateway to Middle East. These services have been very stable from inception till date and have been able to increase their volumes, thereby demonstrating how successful these services are.

Q: What has been the effect of the Cabotage law on the functioning of the terminal?

KKK: The success of any transshipment hub is based on an effective hub-spoke mechanism. In the port business, this would mean feeder connectivity to various cargo origin/destination points. For ICTT to operate as a true Transshipment terminal, it was very essential to provide feeder connectivity to the other ports in the region. This connectivity needs to be efficient and cost effective, without trade barriers. The relaxation of Cabotage for ICTT addresses exactly these issues. With cabotage being relaxed for ICTT, we now have a level playing field with other transshipment ports in the region. Mainline vessels can now evaluate ICTT as an option for their transshipment hub which was not possible prior to Cabotage being relaxed.

Q: What is the feeder network of the terminal?

KKK: Currently we have a regular feeder service connecting  the ports of Mundra, Pipava and Mangalore on the west coast of India as well as the ports of  Kolkata, Vizag, Chennai and Tuticorin on the east coast of India. Over and above this, we also have feeder connections to foreign neighbouring ports like Colombo and the Jebel Ali.

Q: How competitive are you when compared with the Colombo port in terms of facilities, quality of service, turn-around time etc?

KKK: ICTT has the state-of-the-art facility with the most modern equipment to handle new generation vessels. Operationally, ICTT is in line with other transshipment terminals in the region.  ICTT is geared in all aspects to compete with International Transshipment Terminals.

Q: What are the other facilities that you would like to come up if the State and the industries were to make the maximum benefit out the facility?

KKK: We require more allied infrastructure like CFS’s , warehouses, Cold Storages etc  to develop around ICTT. There is a pressing need to improve the road infrastructure in the State for faster and safer transportation of goods, not only for cargo within the state of Kerala , but also for cargo generated from hinterland locations like Coimbatore , Salem, Tirupur etc. Delays at the Walayar check post is a major cause of concern for the trade especially from other states across the border. An integrated checkpost  at Walayar is very essential . This will ensure faster turnaround of trucks at the border in turn will facilitate more cargo to flow towards Cochin because of its proximity to these locations compared to the other South India ports.

Q: Are their enough facilities – CFSs/ICDs around the ICTT -- to cater to the demand at present? What other facilities are required?

KKK: Currently we lack CFS infrastructure in and around ICTT, at present it is just sufficient to cater to the current demand but as the demand increases, we will need more such facilities. A few of these facilities are currently in various stages of completion. Other infrastructure like Free Trade Zones, bonded warehouses etc are required to trigger the growth of EXIM business around ICTT.

Q: With the completion of the dredging work, relaxation in the cabotage law, and clarity on security clearances, all the impediments for the terminal seems to have been removed. How do you see this affecting the performance of the ICTT?

KKK: We are in discussions with a few large shipping lines who have shown keen interest in connecting Cochin directly to ports in Mediterranean, Europe and Africa. This will see more Mainline services calling at Cochin by beginning 2015. We hope that ICTT will fulfill the dream of every Indian to have a successful Transshipment Terminal within the country.