Circular No. ES/30/ 2015-16 October 13, 2015
To: Members of the Council
Sub: Problems related to Shipping and consequent high transaction cost
Dear Member,
As you are aware, High Transaction costs in exports is an area of concern as it impacts competitiveness. In this regard, the Council has been taking up the issues with the Government since the last many years.
You may also be aware that due to reasons beyond control, exports have constantly declined during the last 9 months and it is a matter of great concern for all of us.
Further, Indian exporters are at a distinct disadvantage vis-à-vis its competitors due to the element of transaction costs which according to various studies amounts to 10 to 15% of the fob value.
In one of the studies conducted on this issue, it was concluded that exporters are fleeced by the shipping companies and their agents and FIEO's demand to regulate the levy of multifarious charges made by shipping companies and their agents.
It may be mentioned that Srilanka which has one of the major ports in the world (Colombo) has already enforced regulation by a statute in 2013 and shipping companies are allowed to collect charges like Terminal Handling Charges (THC) from Lankan exporters if the ocean freight is collected. Shipping companies are to collect all inclusive ocean freight and not to collect innumerable charges as they do in India.
Further it is proposed to hold a meeting with the stakeholders to discuss this matter threadbare. It will then be taken up with the concerned authorities for redressal and finding a solution to resolve the matter. As the whole of EXIM industry are the stakeholders and facing this wrath of the Shipping lines, we request you all to share your issues with us not just by writing but also endorsing it with documents. It will facilitate us in taking this issue in the appropriate manner with the Shipping industry and their stakeholders.
If we are able to save this so called extortion charges imposed by the shipping companies and their partners from our costing, we will become competitive to a great extent in our pricing.
Your co-operation in the matter will be highly appreciated.
The Council requests the members to provide your valued views on the above mentioned shipping related matter latest by tomorrow i.e. 14/10/2015 vide email to the following id:-sybil@srtepc.in.
Thanking You,
Yours faithfully,
V.ANIL KUMAR
EXECUTIVE DIRECTOR
