Longshoremen urge Chennai Port Trust to drop July 1 rate hike
The longshoremen urged Chennai Port Trust to drop a tariff increase scheduled from July 1, the fourth increase in 18 months, saying that “tariff stability was necessary to keep existing traffic and also grow in a highly competitive market environment. and price sensitive “.
The tariff increase, which is expected to take effect from May 1 but postponed to July 1, will increase port handling costs by Rs1-2 per metric ton (PMT).
Longshoremen persons who load and unload bulk and bulk cargoes to and from ships.
On April 21, the Chennai Port Trust issued a notification to increase the rate schedule (SOR) by 0.55% on achieving certain performance standards in FY21 in accordance with the 2018 pricing policy.
On December 29, 2019, the ORS was increased from 36% to 50% despite numerous representations against the increase.
On July 1, 2020, the ORS was revised upwards by 1.88% and on December 29, 2020, the rents for the estate were increased by 5%.
Following the tariff revision of December 2019, handling costs at the port of Chennai have sharply increased by Rs 12 PMT in addition to the increase in costs related to ships.
Handling costs increased by an additional Rs 2-3 PMT from July 1, 2020, along with an increase in vessel, dock and all other port costs, making the Port of Chennai uncompetitive and uncompetitive. viable, wrote the Chennai Port Stevedores Association in a letter to Sunil Paliwal, President (I / C) of Chennai Port Trust.
The December 2020 real estate rent increase “pushed the cost of renting land out of the reach of users and also placed an additional burden on cash outflows for the few people who rented land for storage.” merchandise “.
The Port Trust also made the use of Mobile Port Cranes (HMCs) mandatory for longshoremen, leading to the diversion of cargo from the Port of Chennai to nearby ports such as Kattupalli and Krishnapatnam.
The traffic handled by Chennai Port Trust decreased by 6.86% in FY21 to 43.552 million tonnes (mt) from 46.759 mt in FY20.
There is a marked decline in both bulk and bulk cargoes, requiring handling services, at the port of Chennai over the past decade, the association said.
“The longshoremen cannot absorb a further increase in the last 18 months if the port trust were to implement it from July 1,” said association president Ishwar Achanta.
The longshoreman said he markets the port’s services and brings in goods and builds customer loyalty, acting as the port’s business development / marketer.
Merely stating that an increase is justified to meet the performance standards of the previous year is not a sufficient reason, given that the port infrastructure is largely vacant and unused, said the ‘Association.
“Handlers, unlike other intermediaries such as agents and customs brokers, all have contracts and cannot pass the increase on to trade,” he said.
The lobby group said the management of the Chennai Port Trust should signal the reliability of the service by ensuring price stability, without price increases, whether by indexation or otherwise, for the next 24 months.
“This will give confidence to the industry that Chennai Port Trust is serious and is ready to act as a catalyst for trade,” he added.