Who pays for dwell time?

Of the various problem that needs an overhauling in the Indian shipping industry, dwell time is an issue that demand a little alacrity from the policymakers. Dwell time measures the duration elapsed from the time the cargo arrives in the port to the moment the goods leave the port premises after all permits and clearances have been obtained. Cargo containers are allowed free space for an amount of time, after which the trader (importer/ exporter) has to pay a fee for using the warehouse facilities of the port, which is called a dwell fee or demurrage fee. Dwell time is an area, where Indian ports need to improve heavily. Though ports like JNPT (Jawaharlal Nehru Port Trust) have made remarkable headway in recent times, the quandary of prolonged dwell time is far from getting over.

One must be wondering about the reasons for which traders (importers/ exporters) miss the free time window and end up paying the dwell fee! The answer is the archaic and stodgy bureaucratic structures of Indian ports and their inhibition to modernisation. The delay due to the rigmarole of paperwork and snail-paced file movements among different sections of the port authority is not incorporated while calculating the free dwell time. This puts the entire burden of the delay, singularly on the importers.

The entire economy indeed pays for the delay caused by high dwell times of Indian ports, but, the primary burden is borne by the importers. One is only left to wonder why should the importers should pay for this when then they have nothing to do with this dwell time. It is the port authorities who should bear the cost.

The discontent regarding this is not uncommon among the importers. The ire because of this demurrage cost after free dwell time is justifiable and demands timely redressal. Tidying the paper works through digitization and, mechanical work to automation may be necessary, but only a policy overhaul can deal with it. We must have policies that distribute the burden of dwell fee proportionately to all the parties, instead of putting the onus on the traders singularly.

Shipping as an industry is marked by cutthroat competition. A wide array of variables control the decision when a trader selects her port. Even minor changes in those variables may cause considerable cost advantage/ disadvantage; which may shift the preference of the traders from one port to another. And given the inherently globalised nature of this industry, preferring a port in a foreign territory is also an option that the traders or ship liners may opt for. Over the past few years, a score of Indian shipping firms has been registering in foreign ports to encash the tariff difference between Indian ports and their South Asian counterparts in China and Singapore. This exodus has led to a loss to the national exchequer. At the same time, it has also made the Indian ports relatively costlier. In this scenario, time lost due to indolent practices that work on the rusty relics of atavistic bureaucratic standards might cause suicidal wounds to the growth ambition of our country.