Regional Container Lines (RCL), headquartered in Thailand, is set to initiate a service connecting Paradip Port with Port Klang in Malaysia, facilitated by the viability gap funding (VGF) scheme offered by the Odisha government. This marks the second container line to launch a service from the eastern coast port in recent days, aiming to streamline export-import trade from the state.
Under the VGF scheme, the Odisha government will provide $200 per twenty-foot equivalent unit (TEU) to RCL if the export-import volumes during a ship call at Paradip Port fall below the minimum guaranteed volume of 180 TEUs. A TEU represents the standard size of a container and serves as a common measure of capacity in the container business.
According to a senior official with the Odisha government, if RCL manages to load/unload 180 TEUs during a call at Paradip Port, the viability gap funding will not be applicable. However, for any shortfall below 180 TEUs, the state government will compensate the line with $200 per TEU.
An agreement between the Odisha government and Regional Container Lines (RCL) is scheduled to be signed on Tuesday to initiate the service.
The terms for the RCL service mirror those agreed upon by the Odisha government with the Mediterranean Shipping Company S.A, except for the minimum volume requirement of 180 TEUs instead of 250 TEUs for the MSC service.
With RCL’s service launch from Paradip Port, the export-import trade in Odisha will have connectivity to both Europe/U.S. and the Far East.
RCL’s service will connect Paradip Port with Port Klang, facilitating the shipment of containers to final destinations in the Far East via mainline vessels.
In conjunction with the Odisha government’s VGF scheme, the Paradip Port Authority is offering a 75 percent discount in vessel-related charges to container lines and no container scanning charges to boost container traffic.
Paradip Port Authority’s engagement with container lines aims to diversify the cargo mix, as the port has primarily handled iron ore, coal, and crude oil since its inception in 1967. The Paradip International Cargo Terminal Pvt Ltd, with a 5 million tonne capacity and state-of-the-art machinery, stands as an underutilized resource ready to handle container traffic efficiently.
The introduction of services by MSC and RCL will position Paradip Port on the container map, diversify cargo handling, and foster economic growth in the region.