More reports on: Government policies

Cabotage rules relaxed for container transshipment ports

18 March 2016

The government has relaxed cabotage restrictions for ports which transship at least 50 per cent of the containers handled by them. This will enable shipping lines to transport Indian export shipments and empty containers at transshipment ports in India for onward transportation to destination ports by main shipping lines.

With the cabotage relaxation, foreign vessels can also transport Exim and empty containers from any port in India to transshipment port and vice versa, in addition to Indian vessels.
The spare capacity of the foreign flag ships, which could not be utilised earlier due to cabotage restrictions will now be gainfully utilised enabling them to offer competitive container slot rates to exporters and importers, leading to competition led efficiency in container transportation and lower logistic costs for the shippers, a shipping ministry release stated.

The container port seeking cabotage relaxation for transshipment port would have to achieve transshipment of 50 per cent or more of the Exim and empty cargo handled in one year.

New transshipment ports will have a gestation period of one year but would have to achieve the stipulated transshipment traffic of 50 per cent of the traffic handled in the second year. If the container port is able to achieve transshipment traffic of 50 per cent of the cargo handled, the cabotage relaxation for such container port will continue.

Inability of the port to transship at least 50 per cent of the containers handled in a year will result in revocation of the said relaxation.

However, a port whose relaxation is revoked will not be considered for cabotage relaxation for the next three years. The container handling port will also be required to provide monthly container traffic data for monitoring to directorate general of shipping and the ministry of shipping by 5th of the following month.

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