Cabotage law relaxed, but time-consuming radiological scanning must for all foreign vessel containers
The Union Ministry of Shipping has relaxed the Cabotage restrictions for transhipment of export-import containers at the Vallarpadam International Container Transshipment Terminal (ICTT).
Cabotage relates to the right to operate sea, air, or other transport services within a particular territory (see inset).
This relaxation is subject to 100 per cent radiological scanning of containers. Also, the security procedures in compliance with applicable regulations of International Ship and Port Facility Security (ISPS) Code and existing Union government instructions should have to be followed. The Cochin Port Trust has already established 100% radiological scanning facility. The terminal is currently under Level 2 of the ISPS Code with its security entrusted with the armed constabulary of Central Industrial Security Force, according to a press release from the trust.
Those involved with the trade have welcomed the announcement of the Shipping Ministry and feel that services through the terminal will be able to compete effectively with neighbouring transhipment hubs.
Export-import trade in India would benefit from this development by reduction in transit times up to seven days and reduction in international freight up to $300 per container, the release said.
The Indian container traffic has seen a steady growth over the years. Despite this, more than half of the container traffic of India is being transshipped at ports outside India mainly at Colombo, Singapore, Salalah and Jebel Ali. This is because India had no port near international sea routes to handle large mainline vessels. Cochin Port enjoys nearly the same location advantage as Colombo port with a mere 76 nautical miles deviation from the main East-West shipping route. To attract mainline vessels for transshipment of Indian containers at ICTT, Vallarpadam, the Cabotage Policy has been relaxed.
Colombo Port handles a transhipment throughput of 2 million twenty foot equivalent units (TEU) from India. However, the ICTT is currently doing only a meagre transhipment business of 20,000 TEUs a year. This is expected to go up significantly with the relaxation of the law.
This relaxation in Cabotage Policy will be subject to review after three years.