international container transhipment...

Volume 4, Number 3, July – September’ 2015

ISSN (Print):2319-9059, (Online):2319-9067

PEZZOTTAITE JOURNALS SJIF (2012): 3.946, SJIF (2013): 5.017, SJIF (2014): 5.912

International Journal of Trade & Global Business Perspectives© Pezzottaite Journals. 1872 |P a g e

INTERNATIONAL CONTAINER TRANSHIPMENT TERMINAL (ICTT)

AND ITS IMPACT ON COFFEE EXPORTS FROM INDIA: AN ANALYSIS

Dr. Manoj P. K.15

ABSTRACT

Ports play a cardinal role in the transport of goods from one country to another and are inevitable in the export or import of

most commodities from one country to another. Their vital role in the transportation of goods via sea route among various

destinations around the globe is well recognized. In India, major ports come under the Ministry of Shipping, and there are 12

major Ports and 172 minor ports in the country. Cochin Port, located at the southernmost part of India is the only major port

in Kerala and is one of the largest in the whole country.

International Container Transshipment Terminal (ICTT), the only transshipment port in India, comes under Cochin Port

Trust. It enjoys Special Economic Zone (SEZ) status and is set up under public-private partnership (PPP) mode. Coffee being

a major source of export earnings for India and the exporters has access to ICTT services since 2011, this paper analyses the

impact of ICTT on the exports of coffee from India, and makes suggestions for more effective use of ICTT for promotion of

exports.

KEYWORDS

Cochin Port, ICTT, Terminal Handling Charges (THC) etc.

INTRODUCTION

International Container Transshipment Terminal (ICTT) locally called ‗Vallarpadam Terminal‘ is a Container Transshipment

Terminal Commissioned by Dr. Manmohan Singh, the then Prime Minister of India on 11th February, 2011. ICTT is the only

transshipment port in India and it operates in the Special Economic Zone (SEZ) area. Dubai Port World (DPW) signed an

agreement with the Cochin Port Trust to construct, develop and operate ICTT at Vallarpadam, Cochin. As per this agreement,

DPW will operate ICTT for 30 years and thereafter transfer its control to the Cochin Port Trust. Commissioning of ICTT has led

to increase in the export of cargoes through this terminal port, especially that of coffee. Export of coffee contributes significantly

to the foreign exchange earnings of India. Because, foreigners particularly the Europeans use more coffee than tea, and hence

there is good demand for this product in the international market. Export and Import of cargoes are handled in the wharves, and

there are two wharves in the Cochin Port Trust, viz. (i) Ernakulam Wharf, and (ii) Mattanchery Wharf. The import cargoes stuffed

in containers are unloaded from ships at berthing pointing in the area of ICTT, while export cargoes stuffed in containers are

loaded to the vessel at the berthing points in the area of ICTT. The cargoes stuffed in containers are stored and kept ready in

Container Freight Station (CFS), Public or Private Warehouses for loading to the ships on their arrival.

OBJECTIVES OF STUDY

To study the operations of ICTT at Kochi, Kerala and to make comparative analysis of its performance vis-à-vis other

major ports in India in terms of the Terminal Handling Charges (THC) levied, the quantum of exports, and such other

parameters;

To make a detailed study of the trend and pattern of coffee exports from India through ICTT, the role of Coffee Board

of India and the problems of the coffee exporters; and

To make suggestions for more effective exports of coffee from India.

TERMINAL HANDLING CHARGES (THC) AT ICTT VIS-À-VIS OTHER PORTS IN INDIA

The existing Terminal Handling Charge (THC) is quite high at Cochin compared to other major ports of India. Besides, offices of

major Clearing and Forwarding (C & F) Agents, Steamer Agents etc. are situated at Willingdon Island, Cochin. Willingdon Island

is about 15 kilometers away from ICTT. So these offices are forced to vacate Willingdon Island to relocate them in the

Vallarpadam area, the place where ICTT is located. (Table I and Table II).

15 Assistant Professor, Department of Applied Economics, Cochin University of Science and Technology, Kerala, India,

[email protected]

mailto:[email protected]





Table-I: Terminal Handling Charges (THC) in Rupees at Major Ports - Import Containers

Import (Size/Type) Tuiticorin Port Chennai Port Cochin Port Mangalore Port Marmagoa Port

20 D Rs 4100 Rs 4410 Rs 7000 Rs 4470 Rs 5890

40 D Rs 6150 Rs 6410 Rs 10250 Rs 6250 Rs 9320

40 HC Rs 6150 Rs 6410 Rs 10250 Rs 6250 Rs 9320

Sources: Customer Advisory- MAERSK LINE INDIA, Steamer Agent

Table-II: Terminal Handling Charges (THC) in Rupees at Major Ports – Export Containers

Import (Size/Type) Tuiticorin Port Chennai Port Cochin Port Mangalore Port Marmagoa Port

20 D Rs 4700 Rs 4410 Rs 7250 Rs 4470 Rs 5890

40 D Rs 6050 Rs 6410 Rs 10250 Rs 6250 Rs 9320

40 HC Rs 6050 Rs 6410 Rs 10250 Rs 6250 Rs 9320

Sources: Customer Advisory- MAERSK LINE INDIA, Steamer Agent

EXPORTS OF COFFEE FROM INDIA AND THE ROLE OF COFFEE BOARD OF INDIA

The strength of the economy of a country is reflected in the foreign exchange reserves held. To earn more foreign exchanges,

exports have to be encouraged. The Government had formulated various schemes to help the Indian exporters to increase their

exports. Coffee is one the most widely traded agricultural commodities in the world. Coffee in India is grown in one of the

world‘s rainiest inhabited region that receives 2,500 to 4,000 mm rainfall spread over 100days, followed by more than 100 days of

continuous dry period. Indian Coffee is grown under a thick natural shade and it is of high demand in the international markets.

Regarding the exports of coffee beans from India, key export destinations and markets for coffee beans from India the following

points deserve mention: (i) India is the seventh largest coffee producer in the world and the third largest in Asia, (ii) In 2013-14

India‘s coffee exports through ICTT stood at 65,851.320 metric tons, (iii) India exports coffee to over 45 countries over 50

percent of Indian exports in 2013-14 headed to Europe, and (iv) Italy is the largest market importing more than 25 per cent form

India followed by Germany, Belgium, Turkey and the Russian Federations.

The Coffee Board of India, an agency of the Government of India, was established to promote the cultivation, processing and

domestic trade as well as export of the coffee from India. The Coffee Board is responsible for the assignment of certification

numbers to exports of certain coffee merchants. This certificate is intended to ensure to coffee‘s origin. The Board‘s task include

endorsement of the diverse production and productivity of coffee, financial support to research organization and monitoring of

advances in instant coffee packaging. Coffee is predominantly an export-oriented commodity and 65 to 70 per cent of coffee

produced in India is exported while the rest is consumed within the country. Indian Robusta Coffee beans are highly preferred for

its good blending quality. Indian Arabica Coffee has good international market. Arabica is mild coffee. It has higher market value

compared to Robusta beans. As per the statistical report of the Cochin Chamber of Commerce & Industry, the export performance

of coffee is very better after commencement of ICTT. The total quantity of coffee exported during the period of 2008-2010 was

1,88,220.879 MTs (Metric Tons) and was exported through Cochin Port, before ICTT was started. However, the total quantity

during the period of 2011 -2013 was 2,36,366.469 MTs, exported through ICTT. The data on coffee exports through Cochin Port

and ICTT (for 2008 to 2013) are shown in Table III and Table IV.

Table-III: Coffee Exports through Cochin Port before the Commencement of ICTT

Year Number of 20 D’ Containers Number of 40 D’ Containers Quantity in Metric Tons (MTs)

2008 3,998 16 76,773.997

2009 2,199 10 41,913.740

2010 3,616 22 69,533.142

Total 9,813 48 1,88,220.879

Source: Compiled from, Statistical Report of the Cochin Chamber of Commerce & Industry

Table IV: Coffee Exports through ICTT

Year Number of 20 D’ Containers Number of 40 D’ Containers Quantity in Metric Tons (MTs)

2011 4,193 255 93,280.518

2012 3,859 36 77,234.631

2013 3,300 195 65,851,320

Total 11,352 486 2,36,366.469

Sources: Compiled from, Statistical Report of the Cochin Chamber of Commerce & Industry





The total quantity of coffee exports for the year 2011 through ICTT was 93,280.518 MT. In 2012 and 2013, there is a slight

decrease in the exports of coffee. It was 77,234.631 MT and 65,851.320 respectively. However, the overall performance in the

ICTT-regime is better. (Table IV).

Table-V: Top 10 Shippers for Coffee Exports through ICTT (2011-2013) (Quantity in MTs)

S. No. Name of the Shipper Quantity 2011 Quantity 2012 Quantity 2013

1 I.T.C Limited 18,769.516 11,475.372 8,306.728

2. S.L.N.Coffee P. Ltd., 14,542.893 9,937.004 7,086.505

3. Allanasons Ltd., 10,899.680 8,984.664 6,715.799

4. Ecom Gill Coffee Trading 10,056.560 7,361.268 9,080.233

5. Olam Agro India Ltd 7,756.140 6,663.463 4,727.470

6. L.M.J. International Ltd 5,344.152 3,045.156 422.240

7. Tata Coffee Limited 4,464.504 3,468.522 3,828.738

8. Ruchi Worldwide Ltd. 4,361.696 7,310.036 2,298.800

9. Om Shree International 4,258.057 3,752.576 4,066.029

10. Amalgamated Bean Coffee 1,911.128 1,262.700 205.800

11. All Other Shippers 11,456.138 12,281.926 10,791.218

Total 93,280.518 77,234.631 65,851.320


Table-VI: Top 10 Destinations for Coffee Exports through ICTT (2011-2013) (Quantity in MTs)

S. No. Name of the Port Quantity 2011 Quantity 2012 Quantity 2013

1. Trieste 12,257.764 8,126.682 8,277.164

2. Antwerp 8,499.280 7,679.700 9,204.746

3. Genoa 8,247.734 9,976.216 5,345.100

4. Hamburg 5,788.524 2,588.580 1,999.470

5. Barcelona 4,894.000 1,966.024 1,835.600

6. Tunis 3,142.152 1,820.676 - - - -

7. Naples 2,712.476 2,611.272 1,108.800

8. Aqaba 2,534.872 2,905.659 2,363.136

9. Koper 2,466.192 3,497.679 2,840.520

10. Lattakia 2,434.320 2,166.968 1,552.769

11. All Other Shippers 40,303.204 33,373.431 28,153.682

Total 93,280.518 77,234.631 65,851.320


From Table VI, it is observed that coffee is being exported to the maximum to Italy (Ports of Trieste, Antwerp, Genoa), and this is

followed by Germany (Hamburg) stands second.

Table-VII: Top 10 Shipping Lines for Coffee Exports through ICTT (2011-2013) (Quantity in MTs)

S. No. Shipping Lines Quantity 2011 Quantity 2012 Quantity 2013

1. MAERSK 29,211.606 17,630.024 9,490.116

2. MSC 17,119.326 7,629.217 16,461.785

3. CMA-CGM 15,560.043 25,831.122 11,037.112

4. SCI 6,240.629 2,747.055 1,929.789

5. HAPAG LLOYD 5,546.900 8,027.440 3,703.959

6. SAFMARINE 5,059.500 2,068.076 2,286.809

7. EVERGREEN 4,180.797 1,992.040 3,145.758

8. NORASIA 1,938.200 459.060 787.200

9. ZIM 1,910.805 3,672.162 6,633.526

10. TAL 1,076.034 1,003.415 743.019

11. OTHERS 5,436.678 5,928.093 5,993.466

Total 93,280.518 77,234.631 65,851.320






It is noted that MAERSK LINE, MSC LINE, CMA-CGM are the most prominent shipping lines carrying coffee items through

ICTT to different parts of the world. (Table VII).

PERFORMANCE OF ICTT, ITS BENEFITS TO EXPORTERS, AND THE BOTTLENECKS AT ICTT

It is noted that performance of ICTT has been encouraging, though there is scope for further improvement. ICTT is useful for

exporters, including the coffee exporters. Even though charges like THC are relatively high at ICTT, the exporters can save transit

time of their exports; because more main line vessels now berth at ICTT. Similarly, the exporters can save freight charges, as there

is no need for transshipment of containers at Colombo. Main line vessels now voyage to direct destinations from ICTT. Export

containers can move to ICTT from International Container Depo (ICD) Coimbatore, Bangalore etc., by using Vallarpadam rail

line and four-line road. It is noted from the foregoing analysis that there is a significant increase in the export of coffee through

ICTT since its inception in 2011. It is also noted that there is a good chance of ICTT becoming a transshipment hub in the future.

I.T.C. Ltd., S.L.N Coffee P. Ltd, Ecom Gill Coffee Trading etc., is the major coffee exporters during the period of 2011-2013.

Most grades of coffee are being exported to Italy (Trieste, Antwerp, and Genova). Exporters are using following shipping lines

MSC, MAERSK, CMA-CGM for exporting their cargoes. Most of the Clearing and Forwarding Agent‘s offices, Steamer Agent‘s

offices, the head office of Cochin Customs are even situated on Willingdon Island. There is 15 kilometers distance between Port

CFS and ICTT. Therefore, it is very inconvenient to transact containers to ICTT from Port CFS, and for this purpose, Roa-Roa

Service is arranged for container movements between these two locations.

SUGGESTIONS FOR MORE EFFECTIVE UTILIZATION OF ICTT AND ITS ENHANCED PERFORMANCE

ICTT is the only transshipment terminal in India. Still, as of now, many exporters are using other ports, like those at Tuiticorin,

Chennai and Mangalore. It is suggested that exporters can move their cargoes to ICTT and try to understand the benefits of

facilities arranged at ICTT. If they use this terminal port, they can save freight charges and transmit time of export. More 20‘

containers are being handled at ICTT now, as these containers are very easy to handle. ICTT has to provide sufficient facilities for

the staff members of the Clearing and Forwarding Agents, Steamer Agents as well as other relevant customers.

CONCLUDING REMARKS

Export of coffee from India through ICTT has shown significant increase over the years. Even though there are some labour

problems at Cochin, ICTT offers relatively better services to exporters. Many international terminal facilities are now arranged at

ICTT. Coffee Board – the agency of the Government of India, which promotes cultivation, processing and domestic trade as well

as export of coffee from India – has to encourage the coffee exporters to use ICTT services for their exports. Accordingly, coffee

exports from India needs to be promoted further so that it can contribute more to the foreign exchange earnings of the country in

the days to come, apart from helping ICTT to prosper faster as it is still in its infancy.

REFERENCES

1. Government of India. Economic Survey, for the years 2011 to 2014.

2. Sivanesan, R. (2013, August). Tea Industry in India- Analysis of Import and Export of Tea. International Journal of

Business and Management Inventions, 2(8), 09-15.

3. Sivanesan, R. Statistical Report on Coffee Exports, 2008-2013. St. Jerome‘s College of Arts and Science, Kanyakumar,

Tamilnadu. Cochin Chamber of Commerce & Industry,

4. Joseph, George. (2015, January 20). ICTT Kochi plans to reduce free period for cargo containers. Business Standard.

5. (2015, July 15). High Charges a Drag on ICTT's Prospects. Express News Service. The New Indian Express.

6. Venugopal, P. N. (2014, January 31). The Strange Case of ICTT, Vallarpadam. India Together.

7. (2014, August 24). Why Vallarpadam terminal languishes. Business Line News Service. The Hindu Business Line.

8. Official website of Cochin Port. Retrieved from www.cochinport.com

9. Official website of the Coffee Board of India. Retrieved from www.indiacoffee.org.

*****

http://www.cochinport.com/

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