Freight arrivals dip as ship owners steer clear of Thoothukudi port

Decline in arrival of cargo ships at the Thoothukudi seaport, one of the 12 major ports in the country and the second largest in Tamil Nadu, has left the port industry, which caters to importers and exporters and other allied sectors, seeing red.

Various reasons have been attributed to the dip in maritime trade by stakeholders dependent on the industry. Trade policy amendments effected during the last fiscal year proved to be  a blow for the port users, said SKSCN Dharmaraj, former chairman, Confederation of Indian Industry, Thoothukudi.

Such policy changes led to higher penalty charges on ship operators through cargo loading and offloading norms that were fixed at an inflated rate at the port. Such penalty charges are not in effect now after legal intervention, but in a cascading effect, it still discourages the ship owners from making use of the port, which handles more import cargo volume than exports, sources pointed out.

R Edwin Samuel, vice president, Indian Chamber of Commerce and Industry, Thoothukudi, said usually seven to 10 ships would pay a port of call to Thoothukudi, but only two or three ships visited the port in July. Tariff issues regarding container terminal at the port had left the shipping industry facing a slump, as about 10 to 20 per cent of Thoothukudi-bound cargo had been diverted to the 

Cochin Port.

A steep hike in levy on cargo handling labour, wharfage and ground rent cost the industry dear, according to JP Joe Villavarayar, president, Tuticorin Ship Agents’ Association. Two years ago, labour levy amounted to Rs 32, but now it has risen to Rs 70. Besides, wharfage has been increased by 30 to 40 per cent. Since labour levy, ground rent, inter-carting charges and port freight were lesser at the Karaikal private port, compared to the Thoothukudi port, which is the fourth largest container terminal in the country, the former had become a preferred destination for traders dependent on factories producing cement, coal and paper in Ariyalur and Karur.

Moreover, the Karaikal port has been catering to the needs of factories with captive power plants as large volumes of imported coal were offloaded from berthing vessels at regular intervals. Adding to the problems, import duty on some commodities were hiked by 20 to 50 per cent. The increase in customs duty on imports of wheat and pulses also contributed to the decline in cargo ship arrivals. Besides, import shipments of fertilizers, urea and DAP also suffered a decrease by 25 per cent over the year.

Much to their chagrin, trade promotion meeting was not conducted by the port authorities for the last two years, Villavarayar said. The cargo traffic figures showed a dramatic decline in volumes of break bulk cargo such as coal, fertilizers, minerals, ore and grains.

From April 1 to August 20 in 2017-18, 82,32,431 tonnes of general cargo was handled, but in the corresponding period of 2018-19, it fell to 73,91,565 tonnes. Containerised cargo volume jumped to 2,91,288 tonnes in the current fiscal year from April 1 to August 20 as against the corresponding period of the previous fiscal that recorded 2,59,345 tonnes, Villavarayar said.

The logistics industry, which is largely reliant on the Thoothukudi seaport, also took a beating as its business declined by about 40 per cent, said S Murugan, joint secretary, Tuticorin Lorry Owners Association. The closure of Sterlite Copper unit, which imports around one million tonnes of raw material for production, coal-based private power plants, sand and stone quarries that had gone defunct, virtually pushed the industry out of business. The future of nearly one lakh workers seems rather bleak.

During the last fiscal, the Thoothukudi port saw about 20 lakh tonnes of wheat imports, but only four or five vessels hauling wheat have docked there so far this year. Annually, vessels hauling two lakh tonnes of raw sugar would call at the port, but it has come to naught this year. Some years ago, around 150 truckloads of coal would be transported from the port city to cater to the needs of dyeing units and captive power plants in Tirupur, Erode, Perundurai and Pallipalayam, but after closure of several units, it has come down to 40 trucks a day, he said.

It was a bad year for the transport sector as well, said P Shanmuganathan (41), a truck driver of Tooveypuram, Thoothukudi. The declining cargo at the port has triggered concerns over unemployment as truck transportation has been utilised only for 10 days a month since January. Earlier, Thoothukudi power plants proved to be a significant source of employment for truck operators and workers, but closure of three such units has put livelihoods at risk, he said.