Five export containers of the US-based Dockside International have been stuck inside the Chennai container terminal for a week due to problems at the Chennai Container Terminal (CCT). The boxes will miss the mother vessel at Colombo en route to the US. There will be delay of around ten days in delivery of cargo, said Dr R. Ravichandran, President, Asia-Pacific and Latin America, Dockside.
In another instance, five import containers loaded with personal computers for a leading software company were lying inside the terminal for ten days. On a normal day, the containers would have been evacuated in a few hours. However, the recent ¡®go-slow' by employees of the CCT and the subsequent bad weather affected the evacuation of boxes.
Since mid-October, the private terminal run by the Dubai-based DP World has been facing multiple problems, including go-slow by labour of CCT; strike by trailer operators; damaged manholes outside the port, and bad weather. Result: a significant drop in productivity; long delays in container vessels getting berths and trailers with export cargo waiting for hours (at times, days) on the road to enter the terminal.
An internal labour problem triggered a chain of events, and bad weather aggravated the situation, said an industry source.
Alternative options
With frequent problems at the Chennai Container Terminal (CCT) affecting export-import trade, it is time to look at an alternative destination. Developing a container terminal at Ennore seems to be the best option, according to an official of a leading shipping line.
The short-term measure of a second container terminal-hopefully to come up in about a year-to be operated by the PSA-Sical consortium will reduce congestion at the present container terminal. But, the problem of evacuation of boxes from the port and bringing export containers to the port will persist for at least two years. Reason, major connectivity projects such as the Ennore Expressway and the Rs 1,345-crore Chennai port to Maduravoyal project along the River Cooum is still on paper.
It will take a minimum of two years to complete the two projects, which are important connectivity projects for the port. Also, within a few years of completion of these projects, there is every possibility of a recurring connectivity/congestion problem, as these roads may not fully address the growing cargo volumes at Chennai.
"We need to plan for the next 20 years, not for two years. That's what the Chinese do-think ahead of time. We need to learn from the Chinese on infrastructure development," said a source.
Volume growth
In 2001, when the container terminal at Chennai was privatised, the then volume was 3.25 lakh TEUs (twenty-foot equivalent units). The same terminal crossed one million TEUs this calendar year, and used the same infrastructure outside the port even after registering a three-fold growth in a short span of six years.
The present volume needs handling of almost two TEUs every minute at the harbour gate to keep pace with the growth, even without considering the future increases. Going by the experience of the last three months, this terminal has reached its capacity and further growth would cripple the interest of trade.
"The Chennai container terminal is biting off more than it can chew. With the growth in volume, there is a strain on yard capacity and on the machinery," said a source.
With the annual volume at Chennai container terminal growing at 20 per cent, there will be ¡®mounting strain' on the roads in the next couple of years. Proposals for a cargo corridor for exclusive connectivity to the port have been, time and again, discussed and debated for the last decade. However, no serious effort is visible, feels the Southern India Chamber of Commerce and Industry.
There are 23 container freight stations (CFS) in and on the outskirts of Chennai. Of these, less than a sixth are in close proximity to the CCT/Chennai port. Pedestrians, the public transport system, commercial vehicles, two-, three- and four-wheelers share the same access road to the port from these CFS.
Advantage Ennore
A container terminal at Ennore would solve all the problems, says SICCI. The approach to Ennore is on a four-lane highway and can be converted into six-lane. This road carries less than half the density of approach to the Chennai port. The majority of CFS are located closer to Ennore and, hence, turnaround of vehicles will be faster and at less cost.
SICCI also feels that, being a greenfield project with unlimited back-up virgin land, and a desirable draft for main-line container vessels, the promoters would be free to design and develop a terminal matching international standards. Even if 40 per cent of container flow is diverted from Chennai to Ennore, it would drastically reduce the strain on the existing approach roads to Chennai port, feels SICCI.
Hub and spoke
According to a trade source, it would not be a bad idea to explore the hub-and-spoke model, whereby the carriage export containers from factories can be terminated at a CFS located outside the city. The shipping lines depending on the connectivity can prioritise the shipment and accordingly move the right boxes to the port from the CFS. This would ensure that only the right box, ready to upload, comes to the container terminal at the right time.
Woes of trailer operators
The Chennai port is heavily dependent on road movement, with over 95 per cent of containers travelling by road. The rail carries boxes only for inland container depots located at various places across the country and mostly to Bangalore.
On an average, around 3,000 boxes (1,700 imports and 1,300 export) move in and out of the Chennai container terminal by trailers. Under normal conditions, it takes less than 36 hours for a vehicle to move a box from the terminal to a destination outside the city, and vice-versa. However, with the problems at the terminal, it takes 3-4 days to complete the cycle, says the operator.
Mr Vijaya Kumar, Vice-President, Chennai Custom House Agents Association, feels that without a concerted effort to evacuate containers from the terminal and a guarantee of better productivity by CCT, the situation can only go from bad to worse.
Congestion surcharge
The Chennai Feeder Operators operating container ships in and out of Chennai imposed a congestion surcharge of $100 a TEU from December 7. This was due to "inordinate delay in vessel turnaround and under-utilisation of vessels leading to increase in port stays.
There was a move to increase the surcharge to $175 from December 21, but it will not be taken up with improvement in the terminal productivity. The surcharge is only a partial recovery, as costs cannot be borne purely by the vessel operators themselves.
sA rough estimate of days lost to-date was around 130, equating almost $2 million (around Rs 8 crore) in charter hire. Added to this are the resultant lost voyage revenues-not to mention reduced export liftings during the truckers' strike.
SICCI opposed the unscientific and unjustified imposition of the congestion surcharge, which has the micro interest of a stake-holder in total disregard to the macro miseries of the trade, especially at a time when the dollar deprecation is stifling the export sector.
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