Audacity to (demand) reforms in Shipping:

"To be rich is glorious" - Deng Xiaoping on initiating China's market reforms.

 

A rejuvenated central leadership alone, without clear change in paradigm may strengthen our old mindsets. The historically complex web of interactions among Trader, Customs, & Carrier has resulted in peculiar forms of mutual-back-scratching groups that bypass the real government. These Groups form, dissolve, and morph with changes forced from within & outside. Let me be very clear in the beginning that I see nothing sinister in the people working in the Customs Department, CHA, Surveyor or a Shipping Line – except that their dignity has been soiled by the outlandish system thriving on muddled policies for a protracted period. What appears to be dirty money from outside is a very natural outcome in an aberration of policies and systems.

 

Mutual Back-Scratching Groups: CHA a licensed intermediary was created by the Customs Departments to act as a smooth conduit for back scratching between the importers/exporters and the officialdom. Its role has been dented a bit with a few skin-deep reforms, but primarily enshrined to pass the dirty money in a manner that would shield the officials and make the CHA a scapegoat in case of discovery. Generally, DRI is a passive participant than a party-pooper. Shipping lines too need a similar though little benign form of relationship with the customs. Mind boggling complexity of paper stampings in strictly defined sequences that gets mutated into further complexity and opaqueness, from time to time and place to place for filing IGMs, EGMs, Bonds, and vessel calls – has euphemized  this conduit of  dirty money to Surveyors – from carriers to customs. Even open relations between the Carriers and Customs are not uncommon.

 

Origins of these institutionalized channels come from the Policies on Top & the System to implement the policies. The system is built on checks and balances ­– meaning the people in the system are all immoral and can no be trusted. (This is what the East India Company thought of the people working for the company in India) Therefore, a trail of papers, hierarchies, rules, regulations, notifications, and NOCs have transformed simplicity to complexity to a point of being esoteric to the common man. These rules can be twisted easily in their interpretations. We call them loop-holes. They are deliberately phrased and rephrased to create this ugly monster of an incomprehensible bureaucratic system. This is how the system is perpetuated.  The policies too are a lot of smoke and mirrors – unlike the maxim of Deng Xiaoping. The closest we have come is our Planning Commission's whining about high transactional costs in logistics in international trade. The buck stopped there.

 

There is a clear need to define the hard problems rather than covering them with candy-floss. Shipping policy & Goal till 2020 needs to be clearly spelt in absolute terms, steering clear of the rhetoric of chest-thumping numbers like 50 million tons to handle by ports or a parochial call for 'Sethusamudram'. At the same time, the system needs to be repaired to restore dignity to the people working inside it. This is neither, a cynical criticism against the victors nor the skeptical angst of despondency, but rather an audacity to call for reform, when the time is ripe. From my next article onwards, I shall confine myself to the systemic specifics of hard facts hinged on the macro levers of Policy & System.

 

Capt PS Rath (CEO, Maxicon Container Line Pte Ltd, Singapore)