Wednesday, September 30, 2015

Chennai Port Stares at Uncertain Future

Source: http://www.portwings.in/articlesinterviews/chennai-port-stares-at-uncertain-future/

Port Wings News Network:

Chennai Port, one of the oldest ports in the country and regarded as the “Gateway of East Coast,” is now at a crossroads. Situated in the Coromandel Coast in South-East India, the Port of Chennai has more than 100 years of tradition.
Activities at the Chennai Port, which was lull for decades, turned hyperactive when the port began handling Coal in 1970s for the use of Tamil Nadu Electricity Board to meet the power requirements of the state.

After the globalization, when the containerized trade started picking up, Chennai Port was the first to have a container terminal and became a true Gateway of East Coast India with facilities for handling containers, breakbulk and liquid bulk cargoes.

Besides, the port has also played its important role in securing energy security for the whole region by facilitating import of crude and coal for a refinery located near Chennai and power plants located elsewhere in the region.
With the containerized trade picking up, CFS have also started flourishing here and now, Chennai Port has more than 30 CFSes to cater to the trade.


THE BEGINNING OF CONGESTION:
Though the port was witnessing boom in its revenue as well as cargo for years, situation has started to change post-2009, as the port started witnessing frequent congestion of container trailers, which has had badly affected the movement of all cargoes.
Situation has become so worse in one point of time during those days and the liners even introduced Chennai Trade Recovery (CTR) for the delays in berthing at the port. However, the port took some drastic measures and convinced the shipping liners to withdraw CTR to maintain the EXIM trade happy.
Since then, congestion has become a regular phenomenon at the Chennai Port and it has deeply impacted on the revenue of the port. With the congestion affecting the trade, many exporters, who move their goods to their regular clients with a commitment on timely delivery, started diverting their cargoes to other ports in the country.

CHENNAI CUSTOMS & CONGESTION:

With the congestion issue refused to die down, EXIM trade here started blaming the Chennai Port management for issue. However, the management, acting on the appeals from the trade, 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 such measures, the port management salvaged its name from the issue and asked for cooperation from Central Industrial Security Force (CISF) personnel and the Chennai Customs for speedier movement of containers.
While the CISF authorities worked out new strategies for checking and now it has also been properly streamlined, Chennai Customs, is still unable to place a full-fledged team of officers (for apprising, examining and preventing) at the port premises.
According to sources, the shortage of officers in Customs is the main reason for not able to allocate more in Chennai Port. However, the shortage is taking toll on the efficiency of the Chennai Port.

ROLE OF TERMINALS & CONGESTION:

Chennai Port has two container terminals – Terminal I is DP World’s Chennai Container Terminal Private Limited (CCTL) and Terminal II is PSA International’s Chennai International Container Terminal Private Limited (CITPL).
Terminal I was built in 1983 and privatized in 2001 to CCTL. It is managed by DP World under a 30-year Build Operate Transfer (BOT) agreement with the Chennai Port Trust.
Terminal-II (CITPL )was formed in 2007 as a 60:40 joint venture between Singapore-based PSA International and Chennai-based Sical Logistics Ltd. With the exit of Sical Logistics in 2010, it is now a 100% subsidiary of PSA International. It commenced operations in September 2009.
Poor road connectivity to the port (last mile connectivity) has been often raised by these two terminals as impediment to the growth.However, the trade, which has been blaming the port management for the initial real congestion and the latest artificial congestion, now started pointing fingers on the efficiency of the container terminals.

According to the trade representatives, both the terminals give priority to handling of vessels and it often force the trailers to wait inside the port roads to either discharge export container or picking up an import box. Furthermore, there has been allegation that these terminals maintain the same level congestion to keep on levying different charges on the trade.

ROLE OF POLICE & CONGESTION:

While the internal congestion can be tackled jointly by the managements of port and two terminals, congestion of trailers outside the port premises in the Ennore Expressway is beyond the limit of the port authority.
According to the trade, Chennai Police, under the guise of regulating movement of container-laden trailers on the Ennore Expressway upto Ernavur, often create the artificial congestion. In the process, the police stops movement of container trailers at different stretches and allow them to move in batches, which ultimately lead to congestion near Zero Gate, port’s main entry gate. Eventhough the port management has taken up the matter with the top officials in the Police Department, the issue is still continuing.

LACK OF COORDINATION KILLS EXIM TRADE:

According to a section of EXIM players, early commissioning of the Elevated Expressway would help both the traders of import and export as well as the state government. While seamless movement of cargo round the clock would be ensured with the Elevated Expressway, it will reduce dependency of Ennore Expressway for trailers, thus clearing the road for the full use of motorists and public transports.
So, in the interest of the trade as well as for the brand building of Tamil Nadu state among the international players, who are keeping a close eye on the state to set up their manufacturing plants, the authorities should walk an extra mile to solve the congestion puzzle at one, says the fraternity.

-----------------------------Responses---------------------
"Congestion completely devastated the lives of CHAs"
K.V.V. GIRI











Mr K V V Giri,
President, Chennai Custom House Agents Association (CCHAA)
"The congestion, be it real or the artificial one, has completely devastated the lives of Custom House Agents linked to Chennai Customs and Chennai Port.
While exporters or importers can move to other ports and conveniently clear their cargoes there, CHAs who solely depend on EXIM business through Chennai Port for their bread and butter, losing livelihood to the congestion. An immediate solution to the issue would help the trade and in turn, it will bring back smiles on the faces of CHAs."

“We are doing our best to overcome obstacles”
Vimal-Mugshot









Mr B Vimal, Traffic Manager (i/c), Chennai Port Trust

"Congestion is the real issue and the port management is fully aware of it. Even though our efforts on easing congestion have borne results at times, the issue is lurking again and again. For the last few years, the Chennai Port Trust has been witnessing long haul trailers lined up for miles, sometime upto 20 kms, to get into the two container terminals.
Though the port management is taking several initiatives to make the port free of congestion, due to some external constraints beyond our limit, we are unable to get rid of the issue totally. Though the Chennai Port has 14 gates officially, for movement of cargoes in and out of the port round-the-clock, we have only one gate near Kasimedu.
To overcome the internal congestion, we need more gates to the opened. We appeal to the Government of Tamil Nadu to allow the port management to utilize the gates than can be opened to cater the trade.
It is true that congestion here led to diversion of containers and other commodities to nearby ports. We are doing our best to overcome the obstacles and even plans to monitor the terminals’ productivity to make the trade rely on Chennai Port for their shipments."

Response from DP World (CCTL) Container Terminal:
DPWorldChennai-Logo
"DP World Chennai has adopted progressive methods and initiatives such as the 'North Gate Facility' and coastal road diversion after ‘Zero Ingate’ to enhance smooth flow of cargo into Chennai Port. North Gate facility, not only increases operational efficiency by helping ease traffic, but also ensures safety of the drivers."
"There is perennial congestion due to outstation trailers coming into the terminal without documents that are custom cleared following the same queue as a result blocking others. One of the ways to ease the congestion is to direct the trailers coming from factories to come through 32 CFSs outside, so that containers already have cleared custom documents before they reach the terminal."

Response from PSA International (CITPL):
PSAChennai
 "PSA Chennai (CITPL) feels that in the absence of hassle-free connectivity to the port, the issue of congestion will stay alive. To alleviate the connectivity conundrum, the early completion of EMRIP and Elevated Expressway projects hold the key. These projects, once implemented, will not only the help the port to shed the image of congestion-affected facility, but also help the container terminals to enhance productivity."
"As per information we have, congestion inside the port happens only due to illegal parking of trailers along the already congested roads. If the port authorities monitor and turn back such vehicles near the gate itself, it will reduce internal congestion to a large extent. We suggest placing of Customs officials at the Gate, (boundary of the port) than at the container terminal gates, as it leads to duplication of work as well as delay.
Furthermore, we also appeal to the transporters to send their vehicles with dual job orders. It will drastically reduce movement of vehicles coming into the port either for picking an import box or delivering an export box. Though our terminal has dedicated lanes for import and export vehicles and remains hassle-free throughout the day, congestion inside the port premises affects movements from our terminal."

 “Mother Vessel Connectivity to USA and Europe important”
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Dr A Sakthivel, President, Tirupur Exporters Association
"The connectivity of Mother Vessels to USA and Europe from Chennai Port is important for saving of time and reduction of transaction charges. Now, we need to move our boxes to either Colombo or Singapore through feeders to get connected to those destinations.
Due to traffic congestion, the trailers are taking 48 hours to reach Chennai sea port from any CFS, which are located in just 15-20 kms from the port. Because of this congestion, the container transportation charges are getting doubled. Swift action is required to widen the roads from all Chennai CFS to Chennai sea port.
Export container offloads immediately inside of the port. But, due to less productivity in CCTL & CITPL, most of the trailers are waiting more than 3 to 4 hours at CCTL & CITPL gates.
All trailers are in queue for multiple vessels in case of any emergency to meet marked vessel at port reaching of vessel is tedious. Port Authority should give priority for express container to connect marked vessel.
At container Entry Gate incase, if a container does not carry marked vessel documents, Customs officer / Port officer may remove the container from the queue. But now they stop this container till to clear documents, until then rest of the containers can’t move further. CCTL & CITPL are not having two separate road, if two separate road are there, then it would be easy to reach the respective terminal to catch the marked vessel. Our request to Chennai Sea Customs is that cargo registration / admission time to be extended from 12 pm to 6 pm on every day.
On the date of cargo arrival to CFS, Exporters require customs clearance on the same date itself to meet cargo handover date but it is not happening on same day and being followed next day.
There is a shortage of customs officers at main customs and CFS. Due to this, customs clearance on the same day is not happening. The US customers like GAP, EXPRESS, etc.., if the handover date exceeds by a day then they ask for Air prepaid or Discount. Cargo shutout document processing takes minimum 5 days at customs and CFS in case of any change in mode (Sea to Air) or routing (Chennai to Mumbai or any other sea port)."

“It is artificial congestion in Chennai Port”

RafeequeAhmed-Mugshot








Mr. M. Rafeeque Ahmed, Chairman, Farida Group & Chairman, Council for Leather Export (CLE):
"For Chennai Port, connectivity is the perennial issue and the exim trade has long been raising it in every available forum. The projects like EMRIP (linking the port with northern suburbs and CFSes), and the Elevated Expressway (connecting the port with National Highways on the western side) are still under implementation.
I, personally and through different forums, had taken up the connectivity issues with the ministers and other stakeholders. But nothing has happened so far and the trade is suffering due to the connectivity issue. Without them, there will be an uncertainty and the trade will hesitate to plan cargo movement through Chennai Port.
What we are witnessing in the Chennai Port now a days is the artificial congestion, created by several people including the container terminals. When the exports are down by 20 %, congestion, if at all it was there, should have also come down by 20 %. But the situation is remaining same here and continuation itself proves that it is an artificial one.
What the trade here feels that it is a ploy by the container terminals (who are losing due to fall in exports) to continue levying more charges on the trade under different heads to minimize their financial losses. Ultimately, the trade is suffering.
Both the terminals should be held responsible for the artificial congestion. Until unless these things are sorted out, Chennai port stand to lose the trade."

“Chennai Port is the most expensive port”

9_A_V_VIJAYAKUMAR








Mr A.V. Vijayakumar,
Chairman & Managing Director, Paramount Group
"Connectivity to the Port is the major issue here. Without ensuring seamless connectivity before the trade, the port cannot attract more cargoes. As on date, Chennai Port is the most expensive port in the country. The port management should look on it more seriously as it forces the trade to move to the port, which is economically beneficial to them.
Time has come for the port authority to take bold decision in the interest of trade. Tariffs have to be relooked in the view of the demand from the trade.
Since the Port is mainly focusing on green cargo after the Madras HC banned handling of coal and iron ore few years ago, I feel that the management should focus on handling more and more project cargoes.
While the port is now mainly into handling of containers through its two container terminals, developing closed warehouses and installing necessary equipment inside the port would attract more cargoes.
Besides, benchmarking the efficiency of the port (and its container terminals) and its productivity alone would give a new lease of life for the port.
If the port is able to convert the demands of the trade into actions, opportunities are there for Chennai Port to regain its lost glory."

"port connectivity is the main issue"
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Mr R Sugumar, Member of All India Motor Transport Congress (AIMTC) &
President of Tamil Nadu Lorry Owners Federation:

"First of all, port connectivity is the main issue that holding the growth of the historical port of the East Coast. More than two decades ago, a project called Ennore Manali Road Improvement Project (EMRIP) was envisaged by the various stakeholders to meet the logistics demand of the Chennai Port. After several years of delay, the project saw the light of the day few years ago. But, it remains incomplete even today.
Furthermore, another important project of Elevated Expressway is still in the making and seen as a dream project among the transporters. Only after the completion of these projects, connectivity to the port will be ensured. And till then, it will be a nightmare for all of us transporters.
For the time being, if the port accepts our proposal it could come out of the outside congestion. The port has huge tracts of unutilized land inside the port premises. We need only 40-50 acres for parking. If the Port management allots such space for transporters, it could ease out outside congestion. It will help all the port-bound vehicles, which are forced to halt on the road outside the port limit, to get inside and parked at the spot.  Such action will keep the main roads free and help the public transport and motorists move freely.
Tamil Nadu Government also has the moral responsibility to support the port’s growth. In my view, both the Container Terminals inside the port must improve their productivity. Due to the artificial congestion, most of the trade had migrated to the other ports in the region. If the port does not take any steps now, it would turn into museum for sure in the next few years. "

 “Congestion is the real issue”
 Naachiar-TCC








Mr Chozha Naachiar Rajasekar, Trustee, Chennai Port Trust
"There is no dispute in the fact that the lack of connectivity is hampering growth in Chennai Port for years. Keeping in mind, the port management along with other stakeholders had planned two connectivity projects to overcome the obstacles in logistics. While the first project EMRIP progressed well initially, now it got stuck due to various issues and it is affecting the trade very badly.
The second project, a dedicated Elevated Expressway connecting the port with Maduravoyal, is also stuck for years. Because of these delays and vehicle restrictions imposed on the Chennai Port by the state government, efficiency of the port is now down to less than 50 %, which is not at all acceptable to the trade.
If the Elevated Expressway projects gets completed and inaugurated for the trade, it will not only provide a dedicated 24-hr lane for the port, also enhance the efficiency by 100 % thus making the Chennai Port one of the busiest ports in the country. There has been also an allegation that both the terminals are not fully utilizing their capacity and their acts aid to congestion.
Land has been a big issue here as the port is surrounded by Chennai city. Since the port need more land, I suggest the port management to go for reclamation from seafront. To overcome the internal congestion, it would be apt if the port goes for an elevated roads inside the premises."



“Unable to determine the arrival of the containers”

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Mr C Johnson, Managing Director of Fumigation Services,
"The congestion at Chennai port is increasing day by day which affects all the port users to a great extent. Exporters and other service providers are unable to determine the arrival of the containers for a scheduled vessel."

“Procedural lacunas affect Chennai Port’s future”

 -A Well-wisher of Chennai Port

"First and foremost that is lacking is the holistic picture devoid of any vested interests. Protection of ones own turf at the cost of stagnating growth and diverting volumes to neighbouring locations is a myopic attitude which Chennai Exim related bodies have mastered. What I feel is with better discipline among various stakeholders and a reconciliatory approach, even with the limitations of infrastructure, Chennai could grow far better.
Lack of proper vision or foresight among stakeholders becomes speed governors that retards to the pace of growth of economy in the region. Each stakeholder prefers entire focus on their concerns with complete disregard to other interests. Though the last mile connectivity to port project which was in incubation for almost a decade was revived and has progressed fairly well in the last few years, it is yet to address certain crucial bottlenecks in the proximity of the port.
 Procedural lacunas – be it Customs, Custodian or Carrier adds to the complexity. Despite the EDI connectivity many of the manual procedures are only converted to electronic media and there is no innovative system-driven solution.
Age-old practice of physical verification of documents continue to slowdown free flow and create congestion. In my view, there could be a re-engineering study undertaken to modify or delete unproductive steps taken by the port management. Such study could be with the involvement of all stakeholders.
Unique to the country only Chennai has the distinction of having a comprehensive trade body – Chennai Trade Coordination Committee – with representation from all stakeholders. Unfortunately, this has become dormant in the recent time. To check diversion of cargo, if all stakeholders can re-look at the larger picture and start acting coherently, then Chennai can easily regain their prime place as the southern maritime gateway of the country."

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