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AP’s shipping community hails Cabotage relaxation

Aditya Sabharwal

The shipping community in Andhra Pradesh has given a resounding thumbs up to the recent relaxation of the Cabotage law in the country. The law, which basically prevented foreign vessels from carrying empty containers from one Indian port to other Indian port (for discharge), has now been relaxed.
With the new amendment, non registered Indian vessels can now pick up empty containers from other Indian ports and off load them at deficit ports such as Vizag where these containers are much needed.
Hence from now on foreign flagged vessels will no longer require a license from DG shipping to transport goods along the Indian coast. Albeit this move is said to hamper the prospects of Indian registered ships, the shipping community by and large is quite appreciative of this change.
‘This is definitely big news for Vizag in particular’ said Mr Jeevan Vikas, President of Visakhapatnam Container Line Association, VCLA. Terming Vizag to be an import deficit port for containers, he says this will significantly reduce both time and cost for repositioning empty containers here.
Vizag is an export surplus port, however, container availability has been a major issue here.
Earlier shipping lines had to reposition empty containers from Chennai which is an import surplus port.
Chennai has a huge inventory of equipment (containers), however getting them transported through road would turn out to be extremely expensive.
‘On an average, the cost of bringing a 40 foot container from Chennai to Vizag by road amounts to USD 550 whereas now, with this new relaxation, the cost can be brought down to as much as USD 90’ said Mr. Jeevan.
The other way shipping lines could reposition empty containers was to bring them from transshipments hubs like Colombo and Singapore which again would be time consuming and expensive.
With the relaxation of the cabotage law, exporters too are said to benefit as the savings realized would be passed onto the trade. ‘Over a period of time, one can easily expect a 20-30% growth in exports from this region’ said Mr Jeevan. This will further enhance efficiency and also spur demand he said. ‘The shipping industry has been waiting for this for quite some time now’ said Mr Antony Bobby Lawrence, General Manager Samsara group which represents many main line vessel operators in India.
This is a welcome move and will stop foreign exchange loss to the country, Mr Lawrence added.
Some of the major containerised cargo exported from the city include Steel, aluminum, Ferro alloys and sea foods.
Commenting from a terminal operating standpoint, Ms. Vinita Venkatesh, Director, Krishnapatnam Port Container terminal said this new initiative of the government in lifting cabotage is poised to induce higher cargo throughput at Indian ports. ‘KPCT is well equipped with large land area, deep draft, high speed operations and competitive tariff to service the requirements of the transhipment cargo of both the Indian flag as well as the foreign flag carriers’ stated Ms Vinita.
Foreign flagged vessels however still can’t carry Indian bound cargo from one Indian port to another.

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