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Editorial: The Stand-Off Continues

Port Wings, 27 May 2020:

The Director General of Shipping (DGS) and the Central Board of Indirect Taxes and Customs (CBIC) have asked carriers not to collect container detention charges following a Shipping Ministry order to facilitate exporters and importers hit by the lockdown restrictions.

“These notifications are not legally binding on the lines and have to be rescinded. Instead the matter should be left to the lines, to consider each case on its merits,” Sunil Vaswani, executive director, the Container Shipping Lines Association (CSLA) India, said. CSLA India is a lobby group for global container carriers operating from/to India that includes Maersk Line, MSC and CMA CGM.

On April 27, Director General of Shipping, Amitabh Kumar had asked CSLA in a letter to share details of its member lines who are complying with the government order, citing complaints that carriers were not extending the benefits to their customers.

As the stand-off continued, Shipping Minister Mansukh Mandaviya warned that he will “quarantine” the carriers if they refused to follow the government order on waiver of various charges including the container detention charges.

The non-clearance of cargo by the importers has led to acute congestion at terminals, container freight stations (CFS) and inland container depots (ICDs) across the country.

Shortage of labour and equipment operators amid the nationwide lockdown is resulting in shipments not getting unloaded for up to 10-15 days of arrival of the container at the container freight station.

At the same time, container freight station operators allegedly refuse to pay heed to the directives from the Directorate General of Shipping not to charge the storage charges from the consignees during the lockdown days. The cargo movement came to a standstill during lockdown 1.0. It gradually started under lockdown 2.0 and 3.0.

However, migration of labour and drivers from cities to their hometowns has created labour shortages at port, airports. Truck drivers have also moved back to their home towns in large numbers and now there is a huge shortage of trucks and trailers which has severely impacted movement of domestic and international cargo.

The ports and CFS were open during the lockdown however, the clearance of cargo was severely affected due to the fear of coronavirus infection and shortage of labourers. This labour crunch coupled with shortage of equipment operators has led to Less Than Container Load containers not getting de-stuffed for 10-15 days of their arrival at the CFS and the consignees are being charged for these extra storage days.

The DG Shipping in its April 22 order had decided that for the second lockdown period, the shipping companies or carriers will not charge any levy or recover any penal charges, demurrage, ground rent, storage charges in the port on cargo owners/consignees of non-containerised cargo whether LCL or not for the period from April 15 to May 3 due to delay in berthing, loading/unloading operations or evacuation/arrival of cargo. Prior to this, on March 29 also, it had issued an advisory on non-charging of container detention charges on import and export shipments for the period from March 22 to April 14.

The Department of Shipping on Wednesday recommended the ministry of shipping take stern actions, including scrapping of licences, if the liners do not comply with its advisory.

But the Wednesday’s letter mentioned that many importers and chamber bodies complained of charging detention fees by shipping firms.

The DG Shipping office noted that importers are not taking delivery of goods for higher detention charges, known as demurrage.

It said the impasse over taking delivery of containerised cargo is impacting the country’s economy while disrupting production at the factories.

It said the port authority has also the power to release containers in favour of importers without complying with detention charges of the shipping companies.

It also recommended the government may revive a section of the Bangladesh Merchant Shipping Ordinance of 1983, which was annulled in 1995 to avoid such a situation in future.

The section 76 of the ordinance stipulates that shipping firms submit the schedule of fares of certain vessels.

Shipping being the backbone of the logistics industry, merely looking at the issue solely from an exporter or importer point of view, would endanger the entire supply chain.

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