Port, customs authorities key to speed of business
Speed of customs and port operations is critical in deciding the pace of imports and exports as any delays tend to have a ripple effect. Talking about the speed of port operations in an interview with CARGOTALK Vishwapati Trivedi, Chairman, National Ship
ports have not been able to perform as well as the private ports. What factors would account for that?
The major ports, have in the last one-and-a-half years, been progressing pretty well and because the averaging is done, some ports have done very well, while some have not been able to. So the averaging gives the impression that these ports are not doing as well as the private ports, but some of them are doing very well.
Q There has been a shift of cargo from public ports to private ports. Why is that?
In the cargo sector, there is always, as they say, 95 per cent by volume and 70 per cent by value. As the GDP of the country goes up and as we exert more and more of our choices and import and export to meet our needs, the total throughput cargo is definitely going to go up. Some ports have developed very smooth systems of doing logistics, while there are others which have tried very hard but have not yet been developed.
The non-major ports have been able to do a far better clearance of cargo in terms of time. In the major ports sector, some ports have done a great job. For example, JNPT has done very well in terms of efficiency of evacuation, though there are some issues in clearing it to the hinterland. Exports are fast because export is not so much subject to scrutiny and paperwork; imports get stuck.
The two critical operators in the fast clearing of imports are the port guys and the customs authorities. Due to the customs authorities being slow in clearing processes there is a problem, for example, trucks do not move out fast, the storage capacity at the port is not evacuated or cleared fast due to which the new stuff cannot be dumped again.
Also in the ports on the East side, there has been a large spurt in the last four months in imported coal due to various reasons. The power plants are also under pressure to increase their plant load factors and capacities and they have been using a lot of imported coal that mostly comes from Australia, Indonesia or lands on the East coast. All those ports are choked to capacity and bigger the ship that comes more is the efficiency in terms of pricing and costing. But our capacity to dock big ships is also limited. The government has been trying to build up extra space for offloading. Imported coal spurt is very periodic and so people operating at the ports are a bit reluctant in putting permanent infrastructure to import so much as it is difficult to put a structure which will serve for 30 years for a demand which is expected to last only five years. Our ports have to make do with the current capacities and gear them for at least for five to six years according to the needs. In the major ports, there is not too much flexibility because they have to go through procedures as everything is subject to some regulatory conditions. Since private ports do not have to go through too many procedures, they have been quick in evacuating cargo and hence they has been a shift of cargo from public ports to private ports.
Q JNPT has been asked to introduce ‘paperless’ gate-in operation to ease gate delays. What are your views?
JNPT, in fact, has in the last two or three months been asked to operate at a paperless level. The Ministry had planned to use it as a ‘proof of concept’ and replicate it to all other major ports. Though they have done something, there is an issue of digitising the entire transaction. JNPT was advised to go for an electronic gate pass instead of a physical gate pass. Though JNPT is working on that but they need a lot of cooperation from the customs.
Q The Ministry has been thinking of connecting ports with railways. Has there been any development in this regard?
Some months back, the Ministry of Shipping moved a note to have a port railway company which will connect ports or construct railway lines connecting the same to the main trunk route or even buy or lease some rakes. Also since they are basically targeting coal, once this company is established the monopoly over coal by the railways is the first issue that would be discussed and the monopoly of the Railways may be threatened and then the private train operators can also come into the picture.
Q The Prime Minister has stressed on port-led development. What are the steps being taken to achieve progress in this regard?
The Prime Minister is not only worried about the ports; he has tied it up with the development of hinterland of the ports. Gujarat has 41 ports, but they all have some anchor industry to cater to and they are all doing well. For example, when the PM took charge and floated the idea of port-led development, the Ministry also took note and got the SEZ sanctioned just behind JNPT. That is going to be a big industrial township itself, which is there because of the port; so that’s port-led development. The new concept of port-led development at the hinterland will itself generate much cargo.
Q Does the government have any plans to develop coastal shipping for movement of cargo?
Talking about coastal cargo, it has immense potential; in the US it is called short sea cargo. All these ports are in a custom bond area and there are transaction costs along with other formalities that pose minor obstacles. So the government has thought of bringing coastal jetties outside the customs bond area, but since that takes time the government has floated a scheme for all those ports who wanted to invest in coastal shipping in the form of ‘Green Channels’. The coastal cargo is brought and sent through the Green Channel. If the customs have a suspicion, they can always check. So the concept of ‘Green Channels’ was established at many ports, but not all. Now as shifting of cargo through coastal movements is a big challenge; the government has brought forward an incentive to promote the same in the form of a subsidy scheme to shift cargo from rail / road to the coastal route.
Q What are the current plans of the government regarding development of ports?
The GDP of the country is surging due to renewed investor confidence in the country. The projected cargo as per Rakesh Mohan Committee is already obsolete. The cargo profile will be far beyond what he has projected. So the Ministry, in fact, is now using that extra bullish c argo growth to decide the port capacities rather than what was set earlier. The Ministry is already planning along these lines and a lot of such projects are in pipeline, but the same cannot be applied to all ports.
Port capacities will need to be increased, made efficient and calibrated in a manner that typical cargo goes to these ports. Every port cannot have every kind of cargo. As we do not have big ports as JNPT on the East coast, so the government is planning to build a big port in Dubrajpur. Several new small ports are coming up; we have a great country which has huge potential and the current emphasis on ports as infrastructure is being given high importance. The latest in line is the Sagarmala Project which the Prime Minister has defined as port-led development.
Vishwapati Trivedi Chairman National Shipping Board