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Raja Simhan T.E.

If cumbersome and slow paperwork leaves you and your business in the dumps, it's time to get automated as is happening at the Chennai Port Trust.

TRANSACTION costs can, quite often, leave companies feeling helpless and inefficient. Especially so, considering that the transaction cost levels for Indian trade (importers and exporters) are among the highest in the world. Studies indicate that about 12 per cent of the total cost of Indian trade goes towards the transaction cost, compared to about four per cent in developed countries. This affects the competitiveness of Indian products, feel industry watchers.

It is estimated that paper documentation and procedures represent as much as 10 per cent of the goods' value — furthermore they are slow, insecure, complicated and growing. The possibilities of cost reduction are in the order of 50 per cent and will benefit not only the main parties but everyone involved, not the least the authorities.

A key reason for the high transaction cost is the slow adoption of technology in government agencies, including service providers like ports and customs, feel industry watchers. However, things are changing in government organisations and the Chennai Port Trust (ChPT) is no exception.

The Chennai Port Trust started the automation process about five years ago in the form of message transfer within the organisation and, to a certain extent, with the Chennai Customs. After rather slow progress in automation in the last couple of years, the port trust is now becoming automated not only within the organisation but is also linking various port users effectively. Further, with pressure on government institutions to become IT-savvy, the ChPT plans to make all port-related transactions `paperless' within the year.

The aim of total automation is to implement a `user-friendly' electronic message exchange. It will make all transactions with port users, including port operation and accounting systems, transparent, and all this through using the Internet. Though belated, it is a good start, feel port users.

According to the ChPT Chairman, P. Baskaradoss, the EDI (electronic data interchange) programme will enable users to file documents from their office and also provide a transparent system at the port.

At present, the ChPT has links with Indian Bank and some port users whereby payments to the port trust by the trade and vice versa (the latter in case of refunds) can be made online on providing the receipt of delivery of cargo.

Automation in stages

As per the latest EDI programme, effective April 1, 2003, a Web-enabled application process for port users' interface has been initiated. This is with regard to marine billing, cargo handling billing, berthing details, financial accounting and the pay roll process.

In the second stage, from July 1, 2003, the port trust will automate traffic operations and equipment-maintenance operations. A project maintenance and stores inventory process will be commissioned.

In the final stage, starting November 1, 2003, the port trust will launch hospital management and total intranet implementation within all departments, he says.

Among the 11 major ports in the country, the ChPT was one of the first to start automation by identifying the 17 messages as per the implementation guidelines of the Indian Ports Association. Templates have been created, mapped and documented for these 17 messages under the United Nations' EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) Standards. The messages include container discharge loading order, container release order, container stuffing/stripping order and dangerous cargo notification.

Further, the ChPT is one of the first ports to establish a link with the Customs department (Chennai Customs) a couple of years ago to exchange messages and data between the two departments. The interface between Customs and Port was through `flate' file platform, say officials.

For instance, on arrival of the ship (vessel) at Chennai, the official of the shipping line would approach the Preventive Officer at the Central Berth (Ambedkar Docks of Chennai port) for granting `Entry Inwards' to the vessel. Before making the application for grant of entry inwards, the person in charge of the vessel remits the Light House Dues.

The shipping line also provides a detailed report of all the goods on board in a report known as the `Import General Manifest' (IGM) within 24 hours of the arrival of the vessel, to the concerned officer. In the EDI System, the IGM has to be filed in the computer at the EDI Service Centre. The IGM can also be filed in advance — before the arrival of the vessel, says a Custom official.

Over 10 steamer agents and MLOs (main line operators) and some public sector undertakings such as BHEL and the Indian Bank are registered as Trading Partners with Chennai Port. The Port of Tuticorin has also established EDI connectivity with Chennai Port, say port trust officials.

Shipping trade sources say that alongside action on transaction cost, the manual documentation process at the port, which is time-consuming, should be finetuned with technology. Technology will thus help reduce transaction costs and help make Indian goods competitive in the international markets.

The ChPT's initiative is in the right direction. However, its success will depend on how quickly the trade members (a number of them do not even have a personal computer) too adopt technology, say the sources.

raja@thehindu.co.in

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