Merchant Shipping Bill to Rein in Hidden Maritime Charges

Post by : Amit

Photo : X / ETInfra

Aiming to Bring Order to a Fragmented System

The Indian government has introduced the Merchant Shipping Bill, currently under Parliamentary review. Spearheaded by the Ministry of Ports, Shipping and Waterways, the proposed legislation marks a crucial attempt to institutionalize transparency and fairness in how charges are levied by private and public entities in India's ports and maritime logistics sector.

At the heart of the bill is a longstanding grievance shared by exporters, importers, and freight forwarders: that a host of shipping service providers—especially non-vessel operating common carriers (NVOCCs) and freight brokers—often impose excessive or opaque charges. These levies, often unregulated or poorly documented, have led to inefficiencies in cargo handling and significant cost burdens for businesses.

The new Merchant Shipping Bill seeks to overhaul that system entirely.

Industry Concerns Spark Regulatory Reform

For years, India’s maritime logistics community has voiced concern over non-transparent pricing models, particularly in containerized cargo movement. While ports themselves are typically governed by the Tariff Authority for Major Ports (TAMP) or similar regulatory bodies, ancillary service providers operate largely in unregulated space. This includes entities like shipping agents, container freight stations, and last-mile logistics providers, many of whom apply markups that aren’t always disclosed upfront.

This has created an atmosphere of uncertainty for Indian exporters, who often find themselves saddled with high logistics costs with little justification or opportunity for redress. The problem has only intensified with the rise of private logistics intermediaries in major trade hubs such as Nhava Sheva (JNPT), Mundra, Visakhapatnam, and Chennai.

By tackling these issues head-on, the new bill aims to introduce uniformity, documentation, and legal oversight, ensuring that stakeholders are not unfairly charged or caught off guard by unexpected fees.

What the Merchant Shipping Bill Proposes

The Merchant Shipping Bill, currently being vetted by the Standing Committee on Transport, Tourism, and Culture, contains provisions that compel shipping service providers to fully disclose all charges applicable to their services. This includes tariffs for loading and unloading, container storage, terminal handling charges, inland haulage, and even documentation-related fees.

In essence, the Bill mandates:

• Full transparency in tariffs and fees charged by port and maritime service providers.
• Clear definitions and categorization of service providers under Indian law.
• Mechanisms for dispute resolution and redressal for exporters/importers facing overcharging.
• Establishment of a central digital registry to publish approved charges.
• Provisions to penalize violators and revoke operating licenses in case of repeated non-compliance.

In effect, this would be a major win for cargo owners and logistics companies, giving them the power to plan more accurately, negotiate more effectively, and reduce their overall cost burden.

Rationale Behind the Legislation

According to the Ministry of Ports, Shipping and Waterways, the move stems from the need to boost India's global trade competitiveness, particularly in light of the government’s Make in India and National Logistics Policy ambitions. India’s current logistics cost stands at 13–14% of GDP, which is significantly higher than that of countries like China (8%) or Germany (7%).

A major contributor to this cost is maritime logistics—especially in container shipping, which accounts for a large portion of India’s export-import activity. Unregulated price gouging, inefficient port handling, and unexpected charges reduce both the competitiveness and profitability of Indian goods in global markets.

“Transparency is a cornerstone of a modern logistics network,” a senior official involved in drafting the bill commented. “We’re trying to build an ecosystem where exporters and importers are not held hostage by vague fee structures or ad-hoc pricing.”

Support from Export Bodies and Trade Associations

The legislation has drawn praise from several industry stakeholders, including Federation of Indian Export Organisations (FIEO) and Container Shipping Lines Association (CSLA). FIEO, in particular, has long highlighted the need for government oversight on the wide variation in terminal handling charges and inland container depot levies.

Exporters often complain that they are charged different rates for identical services depending on the port or logistics provider they deal with. The new bill, by introducing regulatory consistency, will help level the playing field for MSME exporters, who often lack the negotiating power of larger conglomerates.

“Uniform pricing guidelines and disclosure mandates will help Indian businesses compete more fairly on the global stage,” said Dr. A. Sakthivel, President of FIEO.

Role of Technology and Digitization

The Bill also includes provisions for the digital transformation of India’s port logistics. A central digital platform—likely to be integrated with the Sagarmala program and National Logistics Portal (Marine)—is envisioned to house all publicly accessible charges, contracts, and performance metrics of logistics providers.

This move towards digitization and e-governance in maritime trade is expected to bring in much-needed transparency, reduce paperwork delays, and curb corruption. Service providers will be required to upload their tariffs and operational parameters in real-time, allowing stakeholders to verify charges before engaging services.

Moreover, this digital trail will empower customs authorities, logistics auditors, and exporters to monitor irregularities and lodge complaints quickly.

Checks and Balances to Prevent Abuse

Of course, bringing transparency is only one part of the challenge. Enforcement will be the key. The Merchant Shipping Bill therefore includes stringent penalties for violations, including:

• Monetary fines up to ₹50 lakh for non-compliance.
• Suspension or cancellation of operating licenses.
• Blacklisting of repeat offenders from future port operations.
• Referral to a designated Adjudication Officer for financial and legal penalties.

These provisions are designed to prevent repeat abuse, and offer a legal avenue for exporters who have previously struggled to find accountability in the system.

Impact on Ease of Doing Business

This legislative push could significantly improve India’s Ease of Doing Business ranking, especially in the ‘Trading Across Borders’ indicator. Currently, Indian ports are plagued with delays, inconsistent documentation requirements, and unpredictable costs.

Streamlining port fees, creating a dispute resolution system, and ensuring fair competition among logistics service providers could unlock massive efficiencies for Indian industries, particularly textiles, pharmaceuticals, electronics, and auto components, which rely heavily on timely, cost-effective shipping.

With India targeting $1 trillion in goods exports by 2030, this bill is a vital component of the roadmap to port-led growth.

From Legislation to Implementation

While the Bill is currently in the final stages of legislative scrutiny, the focus will soon shift toward implementation mechanisms, particularly how compliance will be monitored at the local port level. Many stakeholders fear that unless port authorities are equipped with the proper oversight tools and resources, the new transparency mandates may remain only on paper.

To address these concerns, the Ministry is reportedly planning a dedicated Port Services Regulatory Cell that will coordinate with customs, shipping lines, and exporters to track implementation milestones and hear grievances.

The government is also considering launching a public awareness campaign to educate exporters and logistics firms about their rights under the new regime.

A Game-Changer for Indian Maritime Trade

The Merchant Shipping Bill represents a paradigm shift in India’s maritime governance, addressing one of the most persistent complaints in global logistics: hidden or excessive charges. By introducing legal clarity, operational transparency, and digital accountability, the bill aligns with India’s broader mission to become a global trade and manufacturing powerhouse.

If implemented effectively, this legislation could bring down logistics costs, reduce shipping-related disputes, and foster a more competitive export ecosystem—laying the foundation for a modern, predictable, and investor-friendly maritime sector.

India, Merchant Shipping