Government Reduces Port Charges, Five Additional Vessels To Lower Shipping Costs For Exporters
Exporting community and experts have flagged shipping-related issues which are hurting exports, as outbound shipments contracted by 9.3% in August.
The government on Thursday announced a cut in certain charges at ports and the purchase of five additional used container vessels by Shipping Corp. of India as part of steps to resolve shipping-related woes being faced by exporters and importers.
These decisions were taken in an inter-ministerial meeting, held here under the chairmanship of Commerce and Industry Minister Piyush Goyal.
The meeting was held to address rising freight costs, shipping delays, shortage and non-availability of containers and congestion at ports being faced by exporters.
Exporting community and experts have flagged shipping-related issues which are hurting exports, as outbound shipments contracted by 9.3% in August.
The issues figured in the discussions include container shortage, surge in ocean freight rate and shipping cost, shipping delays at the Indian ports, and turnaround time at the ports.
Briefing media after the deliberations, Goyal said that the decisions taken by the Ministry of Ports, Shipping and Waterways and Ministry of Railways in the meeting will result in significantly breaking down shipping costs, improving availability of containers, resolving empty containers issue, faster evacuation of export consignments and reducing congestion at the ports.
"I am confident that it will result in significantly bringing down the shipping cost, improve the availability of empty containers, help faster evacuation of export consignments, and significantly reduce the congestion at ports," he said.
It was announced that the Shipping Corp. will purchase five additional second-hand container vessels to further boost cargo handling capacity.
The SCI also announced that they are chartering container ships to significantly increase the container capacities, on an immediate basis capacity will be enhanced by 9,000 TEUs (twenty-foot equivalent unit).
The Railway Board and the Container Corp. announced that empty containers can now be stored in the yard at zero cost for 90 days. The charges of Rs 3,000, being levied beyond 90 days, have been halved to Rs 1,500.
Further, the storage and handling rates will be reduced for containers from Rs 9,000 to Rs 2,000 (for a 40 ft container) and from Rs 6,000 to Rs 1,000 (for a 20 ft container).
The Central Board of Indirect Taxes and Customs (CBIC) announced that custom clearances at the ports will be expedited by simultaneous screening of two twenty feet containers.
Further, the shipping ministry said that the port capacities have already been enhanced by 2.3 million TEUs.
Furthermore, the Jawaharlal Nehru Port Trust assured to eliminate any congestion and bottleneck at NhavaSheva port.
It was also decided that private container yards will have to mandatorily register themselves with GST authorities and should not accept any charges in cash in order to ensure illegal profiteering arising out of shortage and delay.
The shipping lines assured that all charges like container transportation and Lift-on-Lift-off at yards would be embedded in the delivery order given to shippers.
Goyal urged all stakeholders to make concerted efforts to significantly mitigate the difficulties and address the issues faced by the exporters, effectively deploy multi-disciplinary capabilities and adopt 'whole of the government' approach to ensure that no logistic difficulty is faced by the exporters.
Due to the current geopolitical tensions, Red Sea Crisis, Houthi operations, ongoing wars and their impact on international trade there was a need to engage with a multidisciplinary team, he said.
Secretary, Ministry of Ports, Shipping and Waterways Shipping TK Ramachandran announced that the port capacities have already been enhanced by 2.3 million TEUs.
It was decided at the meeting that private container yards will have to mandatorily register themselves with GST authorities and that it would not accept any charges in cash to stop illegal profiteering arising out of shortage and delay.
Chairman, JNPT, Unmesh Sharad Wagh assured that steps have already been taken to eliminate any congestion and bottlenecks.
To enhance export-related processes, traffic delays near and around JNPA will be minimized and simultaneous container scanning at JNPA will be implemented for faster clearances and reduced turnaround time.
Similarly, the civil aviation ministry announced that all efforts will be taken to ensure faster movement of air cargo and reduce turnover time.
Revenue Secretary Sanjay Malhotra stated that the Central Board of Indirect Taxes and Customs (CBIC) will ensure that custom clearances at the ports will be expedited by simultaneous screening of two twenty-foot containers.
Goyal added that the government will continue to regularly monitor the situation with the next review is scheduled towards the end of October.
Besides different ministries, the meeting was attended by exporters, shippers, Container Corporation, Shipping Corporation of India, Freight Forwarder Association, transporters, ICD (Inland Container Depot)/ Container Freight Stations (CFSs) operators and private Shipping lines.
The meeting was convened to discuss and resolve concerns and reports related to rising freight cost, shipping delays, shortage and non-availability of containers and congestion at the ports due to emerging geopolitical & economic scenario leading to difficulties being faced by exporters and adverse impact on the trade.
FIEO Director General Ajay Sahai said specific varieties of containers like 'Refer, Open top' containers or 45 cubic feet may be in short supply.
'It is the lack of space on ships and blank sailing which is the basic problem. Shipping lines urged to increase frequency and port to reduce turnaround time for them are other major takeaways,' he said.
Sahai added that freight rates have started coming down and are likely to come down further.
"Mundra (Gujarat) to the UK freight for a 40 feet container declined from $4,000 to $3,200 between July 24 and Sept. 24. SCI is entering into container line space and has started one vessel and five more are expected in the near future," Sahai said adding that more scanners will be installed at JNP and infrastructure at Mumbai airport shall be augmented for truck docking and holding area.
India's exports registered the steepest decline in 13 months, falling 9.3% in August to $34.71 billion due to global economic uncertainties, while the trade deficit soared to a 10-month high of $29.65 billion.
Exports during April-August this fiscal increased 1.14% to $178.68 billion, and imports grew 7% to $295.32 billion.
