Traders accuse shipping lines of exploitation

Say they are collecting hefty detention charges and penalties

KARACHI: Importers and exporters have said that shipping lines are exploiting them by taking advantage of the current situation due to Covid-19 and are demanding hefty container detention charges and penalties.

Owing to the long period of lockdown and closure of industries as well as transport, the importers were unable to get clearance from the Customs and take delivery of imported cargo well beyond the allowed free time.

Consequently, the agents of shipping lines are recovering penalty, which may range from $150 to $250 per container per day, in addition to other charges and penalties at their discretion.

Moreover, in total disregard to the foreign exchange regulations, the rupee-dollar conversion rate was taken as Rs167-168 for April and early May 2020 against the official rate of Rs159-161 to a dollar, according to the research department of the Karachi Chamber of Commerce and Industry (KCCI).

“Pakistan’s ports are the most unregulated in the region with lax rules having no clear guidelines, regulatory framework and specified tariffs for container detention, terminal handling charges and miscellaneous charges, which are unjust and illegal,” said KCCI President Agha Shahab Ahmed Khan.

“The Ministry of Maritime Affairs has hardly paid any attention to regulating the activities of shipping lines and their agents,” he said.

To some extent, the statutory provisions in the Customs Act 1969 and relevant rules conferred powers on Customs authorities to regulate functions of shipping lines and monitor their charges, he added.

However, during the present Covid-19 crisis, the Federal Board of Revenue (FBR) and the Customs Preventive have failed to come to the rescue of importers and protect Pakistan’s economic interests in the face of immense clout of shipping lines.

“Importers and clearing agents are forced to pay these discretionary charges because the delay of each day increases the cost of imported cargo and there have been instances where detention charges have accumulated to levels where the entire value of cargo was wiped out and Customs authorities had to auction the cargo to recover their dues,” said former KCCI senior vice president Muhammad Ibrahim Kasumbi, who is engaged in ports and shipping-related matters.

Miseries of the importers and industries, which import raw material, were compounded by the heavy demurrage imposed on consignments, which is payable to the private terminal operators.

They strongly resisted the orders of the Ministry of Maritime Affairs and Karachi Port Trust (KPT) for any concession to the importers, he said.

Published in The Express Tribune, June 3^rd, 2020.

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