Ten per cent busy season charge on container traffic disrupts trade

Resentment is increasing in the trade against the Indian Railways as they have imposed a 10% Busy Season Charge on container traffic with private ports. The terminal operators also want to roll back the levy that took effect from 1st October.

Kevin D’souza, President of India Private Ports and Terminals Association (IPPTA) said that rail is the fastest and most efficient way of transporting cargo to/from terminals/ports to the hinterland and the additional levy will result in transporting container traffic from rail to road and the time taken would be long as well as it can impact the logistics cost. He further added that slower evacuation of import containers from terminals can also add to traffic congestion leading to overall logistics costs as well and it will also increase the customer levies. The additional levy will not only impact the trade but will have adverse effects on the environment as the traffic moves from rail to road impacting the commitment towards carbon neutrality.

The container train operators under the banner of the Association of Container Train Operators (ACTO) have also opposed the 10% Busy Season Charge, counting the impact it will have on India’s export-import trade in general and the container industry in particular.

The new levy will also impact a large number of logistics firms that depend on rail to move containers such as Mumbai-listed Allcargo Logistics Ltd, Navkar Corporation Ltd and JSW Infrastructure Ltd. Besides that, the levy is also hurting many terminal/container operations. The operators are worried that if the transportation is shifted to roads, it will reduce the container volume and profits will further decrease.

The container train industry operates on a cost-plus model, under which increases in haulage charges paid to the Indian Railways are passed onto the customers to protect the margins. Otherwise, the margins will come under stress and profit will come down by 10%, said a spokesperson.