Cochin Port Braces for Impact of New $250 Overweight Surcharge

The Cochin Port shipping community is anticipating the impact of a new overweight surcharge (OWS) introduced by some international shipping lines, effective from February 7. The OWS is applicable to dry cargo containers exceeding 18 tonnes, with a rate of $250 per 20 ft dry container. This surcharge affects cargo from Indian ports including Nhava Sheva, Mundra, Tuticorin, Hazira, Cochin, and Mangalore, destined for ports in the Indian Ocean region.

The introduction of the OWS comes amid changes in shipping routes due to the situation in the Red Sea, leading to ships rerouting via the Cape of Good Hope. This change has extended the round trip voyage from Indian ports to Europe by an additional 12-14 days. As a result, major shipping lines have increased their freight rates to cover the longer transit times. The new routing and higher freight rates are impacting the export sector, which is already facing challenges such as space constraints and longer transit times.

Additionally, the change in routing has disrupted window berthing at many ports, leading to cargo build-up at transshipment ports and vessels operating at full capacity. To manage the load, container liners are taking cargoes averaging 14-15 tonnes per Twenty-foot Equivalent Unit (TEU). The Cochin Port Users Forum indicates that the impact of the $250 surcharge for 20 ft containers on shippers at Cochin Port may be minimal, as it is often adjusted with ocean freight. Moreover, the surcharge's effect on trade is expected to be minimal with freight rates trending downward.