India: Government waiver of detention charges leads to congested port terminals; industry seeks rollback
The government’s order to waive off detention charges has led to congestion at port terminals as consignees are using containers for storage of cargo as factories are shut due to the lockdown.
“With repeated notifications for extended free time on container detention from the government, the consignees have no incentive to expedite the clearances,” said Sunil K Vaswani, Executive Director, Container Shipping Lines Association (India). CSLA India is a lobby group for global container carriers operating from/to India which includes Maersk Line, MSC and CMA CGM.
According to Vaswani, waiver of charges has resulted in acute congestion at the port terminals, Container Freight Stations (CFS) and Inland Container Depots (ICD). Hazira port in Gujarat was forced to close gates for imports and exports due to the port being completely congested.
The container freight stations around JNPT Port in Mumbai has seen the evacuation of only about 61,000 Import TEUs with approximately another 77,000 TEUs still lying uncleared as of date.
On April 27, DGS 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 benefits to their customers.
While shipping lines have been asked to waive off detention charges, most privately operated port terminals are not offering corresponding free time to the lines on port ground rent.
Delay in clearances is likely to be detrimental to India’s exports as ports, CFSs and ICDs have little space left to handle export volumes. The equipment of the lines is blocked with uncleared import cargo thereby leaving little in hand to cater to the export shipments.
This would further get aggravated once the surge in the bookings happen, after the lockdown is lifted. This could thus impact the country’s exports adversely, said Vaswani.
CSLA India has asked for a rollback of the waiver of various charges, saying it should be left to shipping lines themselves to incentivise consignees for quick clearances rather than blanket waivers being ordered by the government each time for extended free periods.
Currently, vessels essentially call just to discharge import loads and sail out light in view of negligible export bookings as export volumes have significantly shrunk due to closure of the factories in India.
As a result of increased per unit cost of operations for the vessels calling at Indian ports, 46 sailings of scheduled services had to be cancelled.
The industry has sought reduction in the Vessel Related Charges levied by the government by at least 30 per cent, over the current levels. This will encourage the lines to try and maintain their service levels during the current critical period.
Shortage of truck drivers and labour remains another challenge, although the situation is slowly improving.
Source: Money Control