Dispute Escalates Between CFSAI and APSEZ Over Controversial Levy at Hazira Port

A heated dispute has erupted between the Container Freight Stations Association of India (CFSAI) and Adani Ports and Special Economic Zone Ltd (APSEZ) over a new levy imposed at Hazira port. The controversy centers on extra charges introduced by Adani Hazira Port Pvt Ltd (HPPL), a unit of APSEZ, causing significant upheaval within the logistics and shipping industry.

In a Customer Advisory issued on August 25th, Adani Hazira Port announced that it would levy additional charges on container freight station (CFS) operators when import-loaded containers are transported to a CFS as designated by the shipping lines. The fee structure stipulated Rs2,500 for 20-foot containers and Rs4,000 for 40 and 45-foot containers.

This move has sparked vehement opposition from CFS operators, who denounce the new levy as “arbitrary” and “unprecedented.” Their primary contention is that the port does not offer any additional services to justify the imposition of these charges. Moreover, they argue that the levy will substantially inflate the transaction costs associated with clearing import containers at Hazira port, potentially raising expenses by up to 50 percent.

In response to the levy, the CFS operators have issued demands for its withdrawal, accompanied by threats of legal action should the port fail to comply with their request.

Adani Ports and Special Economic Zone Ltd (APSEZ) has staunchly defended the introduction of the new levy. According to APSEZ, the charges are essential to offset the costs associated with providing specific services to CFS operators. The company has also asserted that these charges are consistent with the practices observed at other ports across India.

Currently, the dispute is undergoing mediation by the Gujarat Maritime Board. However, a resolution remains uncertain as negotiations between the two parties continue.

Key points of the dispute include:

1. Arbitrary and Unprecedented Levy: CFS operators argue that the new levy imposed by Hazira port is arbitrary and without precedent.
2. Lack of Additional Services: CFS operators maintain that the port does not offer any extra services justifying the levy’s imposition.
3. Increased Transaction Costs: The new charge threatens to significantly raise the transaction costs of clearing import containers at Hazira port, potentially by as much as 50 percent.
4. APSEZ’s Defense: APSEZ contends that the levy is essential to cover the expenses associated with specific services provided to CFS operators, asserting that it is in line with industry practices in other Indian ports.

As stakeholders anxiously await a resolution, this dispute underscores the complex dynamics within India’s maritime and logistics sectors. The outcome of this standoff could have far-reaching implications for both port operators and freight station operators across the country.