Shipment company

India to increase draft depth at Cochin port to increase transshipment operations as Sri Lankan crisis continues

Anticipating an increase in transhipment operations at Cochin Port, following economic and political unrest in Sri Lanka and reports of congestion at Colombo Port, the Ministry of Shipping, Ports and Waterways will undertake a dredging project of ₹300 crore to increase the port’s draft depth to 18 meters which will help moor larger vessels, a senior ministry official has said Activity area.

The International Container Transshipment Terminal (ICTT) at Cochin Port, operated by DP World, has a draft of 14.5 meters. At the moment, the terminal is only able to handle post-panamax vessels, but after the dredging operation, it could accommodate larger vessels.

According to the official, the project will be carried out under the Sagarmala program and is expected to be completed in about a year. In all likelihood, this dredging work will be considered a subsidy, the official added.

“Currently, the port’s container terminal has a capacity of 2 million TEUs (20ft equivalent units) and around 40% of this is utilized. The ultimate capability is to go to 3 TEUs,” he said.

Cargo handled

According to statistics available from the ministry, the transshipment volume from Cochin Port to ICTT increased to 13,609 TEUs in March 2022 from 8,394 TEUs in March 2021, up by more than 60%.

In FY22, cargo traffic at major Indian ports increased by 6.94% to 719.38 million tonnes (mt). The Port of Cochin was among the top five ports which achieved “the highest traffic to date”. Freight handled there increased by 9.68% year-on-year in 2021-2022.

Revised concession fees

Colombo is a regional transhipment hub. As Sri Lanka’s economic crisis soared, many cargo operators wanted to avoid Colombo and divert their ships to Cochin, officials said. But since these were occasional calls, most of them were unable to take advantage of the concession scheme offered at the port of Cochin.

As a result, a new freight-based discount scheme has been approved by the Cochin Port Authority, effective May 1 (valid for three years). This replaced the old call-based discount scheme and is seen as an effort to attract certain cargo away from Colombo and boost container transshipment. “The dredging project, together with the new shed adapted to the current situation, will hopefully attract more transhipments to the port of Cochin,” the official said.

Under the new scheme, mainline vessels receive a 60% rebate on Vessel Related Charges (VRC) for carrying between 251 and 500 TEUs per trip; 75% reduction for 501 to 750 TEU; 80% discount for 751 to 900 TEUs and 85% discount for more than 900 TEUs.

Mainline and feeder vessels will be granted a concession to handle export and import (EXIM) transshipment containers per voyage. Concession rates are set between 5 and 10% depending on the volume of cargo per call, which in turn varies between 51 TEU and more than 500 TEU.

Similarly, large container ships in the United States and the East Coast will receive a 100% HRV concession for one year from the start of service, regardless of the volume they carry. Feeder vessels to and from Bangladesh will enjoy a flat 80% discount on HRVs for one year regardless of call volume.

Published on

May 07, 2022