Pandora's Box

T S Ahluwalia, Convenor of Ports & Logistics Committee and President, NISA, drills down into the logistics cost structure of shippers to point out several anomalies that need to be set right

- T S AHLUWALIA

Even though the government has granted Infrastructure status to logistics, still the industry is chasing to find the actual logistics cost which is high for both imports and exports making them uncompetitive in the global markets. The government is aiming to reduce logistics cost to less than 10 per cent by 2022 but until digitalization gets implemented in every vertical of the logistic value chain along with elimination of unnecessary intermediaries, it will be a herculean task to achieve. India’s logistics cost has been standing high, making products costlier. The reason behind different views and approaches in calculating logistic cost value is the many intermediaries involved in moving cargo. It could be difficult to bring together for calculating all the variable cost components involved in it. The industry has given enormous impetus to the intermediary service providers who impose high charges that ultimately need to be borne by the shippers.

Terminal handling charges (THC):

THC for export shipments pertain to the handling of the container at the terminal, i.e., the movement of the container from container yard till it is loaded on the vessel. This handling is done by the terminal and charges are levied to the shipping line which are collected by the lines from the exporter.