As Government Wields Stick, EXIM Logistics Players Fall in Line

The Director General of Shipping made it more ‘binding’ on carriers not to levy container detention charges on export-import shipments till May 3

A government move asking shipping lines, container freight stations, state-owned ports and private terminal operators therein to forego a plethora of charges to help exporters and importers sail out of the hard times brought on by the outbreak of coronavirus is starting to yield results, despite reservations from many quarters.

During the first bout of lockdown from March 24 to April 14, only a few among the shipping lines, terminal operators, CFSs, and major port trusts heeded a Shipping Ministry advisory not to collect penal charges arising from reasons attributed to the lockdown.

A large section ignored the Ministry advisory.

A raft of complaints from the EXIM trade community against those who didn’t “listen” to the advisory forced the Ministry to talk tough when it unveiled a relief package on Tuesday for port users and troubled public-private partnership (PPP) cargo terminal operators at major ports.

The Ministry had initially planned to circulate the relief measures involving exemptions and remission of various charges till May 3 from April 14 earlier, as a normal departmental order (DO) to the major ports.

But, on sensing that this ‘route’ may not serve the purpose, judging even by the concerns raised by some of the port chairmen against the move, the Ministry formulated the package on April 21 and “directed” the major ports to “issue relevant applicable orders for both remission and force majeure in their respective ports and forward the copy of port’s order to the Ministry of Shipping within seven working days”.

The Ministry further directed that the “ports shall ensure strict implementation of this order by port users including PPP concessionaires, CFS, ICD, shipping lines, etc”.

“If required, ports shall invoke relevant provisions of agreements and take appropriate action”, the Ministry wrote in the package.

DGS order

On Wednesday, the Director General of Shipping (DGS) issued an order asking shipping lines not to levy container detention charges on export-import shipments during the extended lockdown period till May 3. In an earlier order on March 29, the DGS had “advised” lines not to collect container detention charges from March 22 till April 14.

A similar order was issued by the DGS on March 31, “advising” shipping lines not to levy various charges on non-containerised cargo (bulk, break bulk and liquid) from March 22 to April 14.

On Wednesday, the DGS issued an order extending this period till May 3, sans the “advisory” and made it more “binding” on the carriers.

“It is now decided, that for the second lockdown period, the shipping companies or carriers (and their agents) shall not charge….on cargo owners/consignees of non-containerised cargo…”.

The efforts are paying off. On Thursday, DP World said in a trade notice that it “will not be levying storage charges on all containers from March 22 to May 3” at its container terminal in Cochin Port Trust.

Shipping lines, though, are yet to come out with a matching circular waiving of various charges during the extended lockdown period.

“Shipping lines are not keen on following the directions given by the Ministry and DGS. There are over 100,000 importers, but they want some 50 CFSs and 10 shipping lines only to bear all the burden. How is it possible? The Ministry and DGS have no jurisdiction over the charges levied by lines and CFSs in what is a free-market,” said a shipping industry executive.

To be sure, the Ministry and DGS directions are not applicable to private ports, making these orders skewed towards state-owned ports, which handles some 52 per cent of India’s external trade.