Major ports to announce standardised berthing policy for dry bulk cargo by 20 August

The ministry of shipping has formulated a new berthing policy for dry bulk cargo for all major ports, which will provide a standardised framework for calculation of norms, specific to the commodity handled and the infrastructure available on the berth.

The new standardised berthing policy will come into effect from 20 August 2016.

The new berthing policy aims at design norms with the objective of driving higher productivity and achieving near-design capacity of the available equipments /infrastructure in order to;

• Reduce berthing time and overall turn-around time of ships;
• Drive higher cargo throughput using the available infrastructure in the Major Ports;
• Improve utilization of port assets and create additional capacity without any significant capital investment;
• Increase competitiveness of the major port by creating value for the trade through reduced logistics cost;
• Reassess the capacity of the berths based on the expected performance of the berth equipments and vessels derived from performance norms; and
• Standardise anchorage charges across major ports to reduce turnaround time.

All major ports will be holding trade meetings between 1 and 18 July 2016 to sensitse the norms, incentives, penalties and charges to be implemented. The policy will be implemented by all major ports by 20 August 2016.

Dry bulk cargo currently makes up over 26 per cent of the cargo handled at the 12 major ports. Furthermore growth in coastal shipping is expected to add around 100-150 MMTPA of additional dry bulk cargo at ports by 2020-25.

Recent benchmarking of ports' performance across key dry bulk commodities has identified significant scope for improvement of productivity in comparison to best-in-class peers. The low productivity has contributed to high turn-around time in addition to resulting in higher berth occupancy levels across major ports.

Furthermore, low productivity prevents ports from being able to utilise the full capacity of existing assets, thereby directly diminishing return on investment for ports. Significant productivity improvements are therefore necessary at major ports not only to ensure additional dry bulk cargo throughput, but also for avoidance of capex in additional capacity creation.

Performance norms and penalties linked to performance norms are used by most international ports to improve overall productivity of operations.

For instance, major international coal loading ports such as Newcastle and Dalrymple Bay specify number of hatch changes and draft surveys, de-ballasting rates as well as overall productivity with provisions for denied berthing and / or penalties. Penalties linked to non-compliance with productivity norms are also levied by ports to create the right incentive / dis-incentive structure and improve performance.

Currently, however in many major ports it has been observed that performance norms are not being used optimally to improve productivity. Furthermore, currently, there is no standardised, systematic method for arriving at norms for different commodities.

Also, in cases where norms have been prescribed, it is observed that these norms do not utilise the entire capacity of the best available equipment on berth.