A long-running stakeholder dispute surrounding inter-terminal rail operations at Jawaharlal Nehru Port Trust (JNPT), India’s busiest container harbor, is escalating and can hurt renewed government efforts under way to shore up productivity through proactive measures that inevitably hinge on greater coordination between various supply chain links in the port complex.
The dispute surfaced when PSA International opened its new Bharat Mumbai Container Terminals (BMCT) facility in February 2018. At the center of the issue has been an additional fee other terminals operated by DP World and APM Terminals sought to apply on BMCT-meant export-import containers handled via mixed trains connecting at their rail yards. PSA demanded a rollback of what it called an “arbitrary and capricious” practice by rival operators and approached the country’s anti-trust regulator, the Competition Commission of India (CCI), for intervention in the matter.
In yet another counter measure, the Singapore-based company has announced it will begin charging for inter-terminal service, effective May 15. “A composite fee of Rs. 400 [about $6] per TEU will be charged for any ITT [inter-terminal transfer] container movement by BMCT to or from other container terminals,” the trade advisory said.
The company, however, said no charges will apply if other terminals clear up such containers by truck “in line with the productivity standards they otherwise provide between themselves.”
“Operating for the past 15 months, BMCT has faced serious anti-competitive interventions from competing container terminals,” PSA said. “While BMCT will continue to deal with the intransigent conduct it experiences at the port, BMCT is now constrained to charge, in accordance with [the] law, for the services it has hitherto been rendering free of cost arising from the aforesaid discrimination.”
The terminal heavyweight said that in the period up to April 2019, BMCT has handled a total 46,000-TEU inter-terminal movement for other terminals at no extra cost to the trade, which it claims has aided productivity at the port. The company also highlighted that as much as 43 percent of inter-terminal movement at BMCT’s on-dock railhead during March was meant for other terminals, with its own transactions pegged at just 16 percent.
“The issue is becoming far more serious with the increasing quality of service and productivity standards brought to bear at BMCT. The most unfortunate facet is that the trade is being charged by the other terminals despite the entire inter-terminal transfer, as set out above, being undertaken solely by BMCT and hitherto at its own cost,” PSA added.
Officials at PSA (India) weren't availabe for further comment.
DP World Subcontinent — which operates Nhava Sheva International Container Terminal (NSICT) and Nhava Sheva (India) Gateway Terminal (NSIGT) at JNPT — told JOC.com that its terminals are fully consistent with all local regulations and remains committed to further improving productivity standards.
“Containers of BMCT handled at our rail sidings are invoiced only as per activities performed in line with our tariff and in case of our containers that are handled at BMCT rail sidings, no additional CRO [common rail operation] charges are collected by us,” DP World said. “Our constant endeavor is to provide timely service to all service requests including that of inter-terminal transfers."
Despite increased competition, DP World saw an upswing in its combined market share at JNPT in fiscal 2018-2019, with throughput rising 15 percent year over year to 1.5 million TEU, out of a total all-time high of 5.13 million TEU shipped to and from the port.
Officials at APM Terminals Mumbai were not immediately available for comment. The company recently put out a trade notice recalling its January 2018 advisory, which also came under the CCI scrutiny.
Concerned about an aggravating intra-port feud, the Maritime Association of Nationwide Shipping Agencies-India (MANSA), which represents local ship agents, has immediately stepped in and called on stakeholders to review the levy of extra charges on inter-terminal movement.
“Since BMCTPL now plans to charge a composite fee of Rs. 400 per TEU, with effect from May 15, for any inter-terminal transfer of containers performed by BMCT, to or from the other terminals at JNPT, the shipping lines would not be able to pay twice doubling their cost towards CRO charges to both BMCT as well as other respective terminals. No additional service request [ASR] charges with effect from the above date should be levied on the shipping agent/lines,” MANSA said.
A vast majority of trains to and from JNPT terminals operate on a “mixed” basis, enabling rail logistics companies to transport cargo of multiple terminals and discharge or load containers at one terminal. Although this process often causes longer dwell times, the upside is that these service providers are able to maximize train capacity and turn around at a quicker pace, given the limited infrastructure at present in the public harbor.
JNPT handles the bulk of India’s containerized freight and as such, more integrated and harmonious relations between port stakeholders are vital to the emerging economy’s trade development goals — which is also underscored by recent heavy public spending on the port fairway development.