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New customs rules to cause additional FOB cost of $100-125 a container at Tuticorin
March, 26th 2014

A recent public notice issued by the Tuticorin Customs has created a concern among the trade at the Port City of Tuticorin, in the Southern part of Tamil Nadu.

Stakeholders in the trade have said that it would make the operating procedure still more complex and rob off the advantages the EXIM trade is enjoying currently at the Port of Tuticorin.

Tuticorin Customs Brokers Association President K Pon Venkatesh narrated that Customs have said that currently, a factory stuffed container under central excise supervision, arrives at a CFS, the Custom broker completes the let export formalities and the container in the same truck proceeds to the Port gate, the Customs broker completes the Allowed for shipment formalities & gets gated in the Port / Terminal.

Similarly, for a cargo which has to be stuffed in CFS, the empty container is moved to CFS, stuffed with the container still on the truck, completes the let export formalities & & the container in the same truck proceeds to the Port gate, completes the Allowed for shipment formalities & gets gated in the Port / Terminal.

However, when the new procedure is implemented, in the case of house stuffed container, the laden container has to be landed inside the CFS , the CFS operator is to move the laden box in another truck, the CFS operator is to then complete the allowed for shipment in the gate & then the container gets gated in by the CFS operator.

He added, in the case of a CFS stuffed container, as per the proposed new procedure, the empty container is to be moved to the CFS by Customs broker & land the empty container at CFS.

The CFS operator is to pick up the empty in their truck & stuff the cargo after the Customs broker completes the let export order, then the CFS operator is to move the laden box in their truck, the CFS operator is to then complete the allowed for shipment in the gate & then the container gets gated in by the CFS operator.

This translates to additional lift off / lift on costs at CFS, additional transportation cost from CFS to Port and finally would result in additional FOB cost of approx $100-125 a container.

On the operations as the responsibility of truck movement from CFS to Port is to be entirely shouldered by 13 odd CFS', there are possibilities of delays which could lead to missing the targeted feeder vessel, mother vessel & delayed arrival of cargo at destination which could lead to claims , loss of orders etc.

As the documents which are to be handled by Customs brokers are now forced to be handed over to CFS operators, critical commercial information like buyers address, invoice value etc can be exposed.

In a statement, he said, the transport operators are worried that there is a large possibility of cartelisation by the CFS operators & hire truck from the transport fleet operators at subsidised rates and optimise their profits.

"They feel that the market forces will not determine the rates & the fleet operators have to depend on 13 CFS instead of depending on 300 odd Customs brokers. The CFS operators feel that this is a rule & they are bound to go as per the Customs rule".

 
 
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