The Big Opportunity To Coastal Shipping: (3)

A Critical Look At The Ports: Part - 1

 

Ports in India are the invisible rotten hands of the Unions & the government to suck away any thing it lays its hands on with diabolic impunity. It is an orgy of different government departments and officials to revel in this mayhem. Even the private ports, though many times more productive and progressive, cannot but mime & indulge in this plunder. This may sound harsh, considering its lower contribution to kill coastal shipping in comparison to high cost of ship owning, as discussed earlier – but can be justified because of its insidious effect on our international trade.

 

Let us analyze a simple partial-operation of loading one 20' container by ship's gear, containing 20 MT or CBM of cargo on a coastal vessel. The current tariff stands around Rs 2000/ to Rs 5000/. You need one Crane-Operator, two people ashore to hook the spreader, two people aboard to position & unhook – five men & five minutes to load one box. We shall ignore horizontal movements & cell guides.

 

**Assuming a team of five men needs to do a minimum 120 moves per day (8 Hours) and with an average salary of Rs 10,000/ per month. Informatively, in Chittagong Port in Bangladesh productivity is equal and often higher than 15 moves an hour averaged over 24 hours, using ship's gears.

 

Assumed Salary Per Head Per Month	INR 10,000
Men Involved	5
Manpower Cost per month	INR 50,000
Manpower cost per day	INR 1,667
Manpower cost per move	INR 14

**Actual stevedorage cost per Ton or CBM – Rs 0.69

 

If we take downtime costs & operating margins, we can push this cost to a maximum of three times to Rs 42/. Actual tariff is 50 to 100 times of this. Wharfage & storage are charged for the usage cost of the Port separately. What a colossal national waste, the little Indian has to pay for? The reasons behind this are – Self serving Port Workers Union and a parasitic bureaucracy that manages the ports. Today I shall discuss on the former.

 

As a case study, I shall discuss the port of Paradip, which is more benign in contrast with Kolkata or Mumbai. There are three Unions involved in an operation of loading a box. One – Unloading cargo from wagon/truck. Two – moving from CY to shipside. Three – shipside to board. One is controlled by a local criminal & stevedoring company, who is the leading member of the Pool of six, entitled to draw labour from this pool – meaning the port is virtually controlled by one man. No outside stevedore company can draw labour. The entry of any new stevedore into this Pool of six is banned by an imbecile Supreme Court verdict. Note - How the so-called independent judiciary is instrumental in sucking little man's blood! This appears gross and murky, because a lower court cannot overturn this demonic verdict. No port user, however mighty, can use this port without the blessings and agreement to the administered price and conditions imposed by this person leading the Pool of six. He decides, out of this six, who will do what. He keeps the cream for himself. The Union leaders are in his pay roll and the poor workers are hoodwinked into his self-serving needs. There are similar & complex mechanisms for the other Unions too.

 

You need to book a gang well in advance. As a practice, the workers arrive on their sleek motorbikes, one hour after the shift starts. Then one of their leaders would start the loud haggling with the stevedoring supervisor (private) that takes about another 30 minutes to an hour. The first issue would be the quantum of incentive per box, for the workers not to work. Usually, we have to take our own hands from outside to do the operations, because the workers are generally obese & excruciatingly slow in their movements, with huge potbellies and have difficulty in climbing the gangway, let alone the Cranes or container-tops. Each of them owns a fleet of Dumpers or at least one dumper used inside the port by the stevedoring companies by compulsion. They are masters in the twisted Labour Laws of our country and can bamboozle any decent lawyer at any given day. Since it is illegal to bring in outside hands to work inside the port, they can keep their eyes shut on this, as long as the incentive or bribe is meaty enough and it usually is. The other issues for haggling are – working in tea-breaks, number of outside hands taken, meal price, time of stopping the work (Usually before one hour of the shift end, that could stretch to more than 2 hours if not properly negotiated), price of safety gears (we need to pay even if they don't use), and above all speed money. Speed money goes exponentially higher according to the benchmark set by the leader for the shift. If the benchmark set by the leader is 30 boxes, and you end up doing 100 boxes – you need to pay for these extra 70 boxes in different complex slabs. Usually, the leader's mathematical acumen is better than the supervisor, in deciding the number of boxes to load or unload in a given shift. Many times the supervisor bites far more volume and ends up paying so much incentive that, the bottom-line of the stevedoring company takes a beating. Out of 8 hours of shift, 3 hours are lost at the beginning, mealtime, and end of shift: provided you do a decent haggling. In addition, you need to train your outside hands to be respectful and obedient to the workers – failing that, work would be disrupted midway and another bout of haggling could start. This could be disastrous to the profit of the private stevedore. I do not blame the workers at all – In fact, under similar situation I or you would improvise a more sophisticated  and ingenious way of maximizing the returns. Unions are a bad idea, but held on to by politicians and criminals to serve their own interests - while the media & intelligentia look at it as a sacred cow. The little man pays a heavy price though. The above results in monstrous cost-sheets, destroying new businesses & new jobs, depriving the poor little Indian the right to equal opportunity to work, destruction of national economy, and above all a viable coastal shipping. I shall deal with a possible solution to this menace on the sequels.