With increasing capacity utilisation pressure and sensing an opportunity to capture more ad-hoc calls because of vessel diversions in the region, Indian east coast port leaders are offering deep discounts on marine dues for container lines.
V.O.Chidambaranar (VOC), also known as Tuticorin, is the latest port to make that announcement.
The incentive package comes with some minimum traffic and trade coverage criteria. VOC Port will extend rebates up to 85% on its existing vessel-related charges (VRC) for carriers connecting Tuticorin to ports in the US and Europe, provided they make no less than 40 voyages annually and lift an average volume of more than 600 TEU per call.
Between 26 and 39 voyages and more than 500 TEU lifts per sailing, a 60% concession will be applied, whereas up to 25 voyages and a minimum of 400 TEU per voyage, VRC payable will be half the normal scale.
For vessels serving trades in South East Asia and the Middle East, the concessions will range between 67% and 40%, subject to carriers meeting certain conditions.
The package also includes concessional rates for coastal or short-sea vessels engaged in intra-country transportation, as well as other breakbulk/general cargo vessels calling at VOC Port.
The one-year scheme came into effect yesterday (13 April).
“For the financial year 2022-23, VOC Port intends to achieve the milestone target of 900,000 TEU,” the authority said in its trade notice.
The authority added, “For achieving the milestone target of 900,000 TEU, all container vessels which have not received any other concession(s) will be eligible for a loyalty bonus of 10% refund in VRC paid for the vessels handled during the concession period of the financial year 2022-23, subject to the achievement of 10% overall growth over previous year i.e., the financial year 2021-22 volume by the port as well as 10% growth over previous year i.e., the financial year 2021-22, volume by the operator/consortium.”
Cochin Port, which hosts India’s first full-fledged transshipment terminal, known as Vallarpadam, already has similar tariff concessions in place as part of efforts to induce more container ship calls.
With new capacity additions, intra-port competition on the east coast is expected to further heat up in the coming days. New Mangalore Port (NMPT), a major government port on India’s east coast, recently opened its first dedicated container terminal, capable of handling some 250,000 TEU annually.
Container lines serving Indian trades generally remain wary of introducing large-size direct calls on the east coast, given their historical concerns over sufficient gateway cargo availability and other hinterland connectivity shortcomings.
According to industry estimates, total Indian East Coast capacity at the designed scale is now pegged at 10 million TEU annually, whereas container volumes out of the region are currently hovering at around 5.5 million TEU, thus creating a supply overhang scenario
Jenny Daniel
India Correspondent
Contact email: j.daniel@container-news.com
