Traders seek shipping fee waiver

Say waiver of only demurrage, port charges will not make significant difference

KARACHI:

Businesspeople have hailed the government’s decision about waiving the demurrage and port charges, which were imposed on the containers stuck at ports, but have also urged the shipping companies, freight forwarders and port handlers to scrap their fee in this crisis for the trade and industry.

Earlier, a high-level meeting, jointly chaired by Federal Minister for Commerce Syed Naveed Qamar and Minister for Maritime Affairs Syed Faisal Subzwari, was held at the Karachi Port Trust (KPT) head office, where all stakeholders from the government as well as private sector agreed to resolve the longstanding issue arising out of the containers held up at ports.

“Government’s decision alone may not be sufficient and cooperation from all quarters including the shipping companies, freight forwarders and port handlers is also necessary,” said Karachi Chamber of Commerce and Industry (KCCI) President Mohammed Tariq Yousuf.

He expressed hope that the shipping companies, freight forwarders and port handlers would consider the minister’s appeal of waiving their fee.

Traders, however, pointed out that there were still a few pending issues that needed to be addressed to clear the way for smooth trade activities.

“A significant number of containers carrying imported goods are stuck at ports owing to the slow release of shipping documents by banks,” said JS Global analyst Waqas Ghani Kukaswadia.

Meanwhile, the State Bank of Pakistan (SBP) has announced a one-off facility for import-driven businesses by directing commercial banks to process import documents for the release of a majority of goods containers. This is expected to help ease the imported raw material crisis across industries and reopen the closed factories.

Earlier, the business community had criticised the SBP’s decision that led to a halt to the clearance of 6,000 containers at Karachi ports. Now, the SBP has asked banks to facilitate the imports financed by the traders themselves.

It also emphasised the need for prioritising the import of food, medicines and energy products. The directive will be effective till March 31, 2023.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh highlighted in a statement that the delay in the clearance of containers had caused various problems such as detention charges, shortage of raw material for industries and massive layoffs.

He called on the SBP to closely monitor the commercial banks to ensure that its decision was properly implemented. He suggested that priority should be given to certain industries such as export-focused manufacturers, food products, industrial raw material and agricultural raw material while clearing the backlog.

The KCCI president pointed out that in some cases the required procedure had been completed, but banks were delaying the release of documents, resulting in demurrage and detention charges in addition to jeopardising the trade relations.

Published in The Express Tribune, January 25^th, 2023.

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