Demurrage charges: KPT to receive Rs2.2b from NATO for seven-month hold-up

Supply backlog at port expected to clear in roughly 24 days.

KARACHI: The Karachi Port Trust (KPT) will receive up to Rs2.2 billion from Nato for storing their containers for the past seven months technically known as demurrage charges, a KPT official said on Wednesday.

Talking to The Express Tribune, KPT General Manager (Operations) Rear Admiral Azhar Hayat said port authorities were expecting a flurry of cargo clearance, as container build-up of more than seven months would start clearing on Thursday.

Pakistan had blocked Nato supply routes on November 26, 2011, to protest the killing of over two dozen soldiers in a Nato air raid.

Demurrage refers to the charges associated with the storage of cargo for an extended period.

During the ban, Nato used the Central Asian route through Russia, Uzbekistan, Kyrgyzstan and Kazakhstan which jacked up its transportation cost more than six times.

“We’re all set, and now it’s up to the consignees to get their cargo cleared from customs,” he said.

Demurrage charges of Rs2.2 billion are non-negotiable, according to Hayat. He stated that there were about 3,851 vehicles and 1,983 containers currently stuck at KPT, adding that port authorities were able to clear up to 250 units per day.

Therefore, all things being equal, the backlog of Nato supply is expected to clear in roughly 24 days.

Talking to The Express Tribune, Oil Tankers Association Chairman Yusuf Shahwani said on Wednesday evening that the government has had no communication with goods’ transporters following the reopening of Nato routes, which is likely to create logistical problems.

Moreover, he said transporters had yet to receive compensation for the Nato cargo they handled seven months ago.

“I request the government to provide us with foolproof security to save lives and valuable cargo,” he said, adding that the security model adopted by the Balochistan government before the suspension of Nato supplies should be adopted by the rest of the three provincial governments.

The Balochistan government, according to Shahwari, provided transporters with enhanced security through police, FC and Levies. “The interior minister, commissioners and deputy commissioners of Balochistan made sure that Levies and FC members protected our trucks from Jacobabad to Chaman. Other provincial governments should do the same to save Pakistan from embarrassment globally.”

Published in The Express Tribune, July 5^th, 2012.