Reuters archive photo.
KARACHI: Despite an order from the minister of maritime affairs and cabinet, in the background of Covid-19, to allow free storage for 15 days for importers of all cargo, the terminal operator insisted on providing assistance for only five days.
The terminal demands hefty demurrage fees from importers before shipping cargo, which remains trapped in the terminal.
Thousands of containers and less than container (LCL) have piled up at the terminal because importers cannot bear the heavy demurrage and detention costs due to delays in opening shipments due to locking and lack of transportation of goods, according to a statement issued by the Karachi Chamber of Commerce and Industry (KCCI) ).
Industrial closure and suspension of trading activities have affected the entire supply chain and importers have not been able to supply goods to factories and wholesale markets, resulting in a liquidity crisis.
Meanwhile, some importers have not been able to get their import documents from banks due to lack of funds.
Contrary to directives to allow importers 15-day free storage for all cargoes imported between 25 March and 30 April 2020, terminal operators do not allow an additional 10 days of free storage over and above the five-day regular free time, a KCCI spokeswoman said when speaking with The Express Tribune.
Karachi Port Trust (KPT), the Ministry of Maritime Affairs and the cabinet agreed to spare 15 days to reduce the suffering of importers, who have already suffered heavy losses on imported cargoes due to falling commodity prices and a sharp fall in commodity prices. raw materials, triggered by a sharp decline in global demand.
Considering the urgency of this problem, the KPT supervisory board passed Resolution 340, to allow the waiver of demurrage and the extension of free time for imported cargoes between March 25 and April 30 in all terminals in their jurisdiction. The resolution was submitted to the federal cabinet for approval through the Maritime Ministry, which was ratified on April 14, with the directive that free time should be extended from five days to 15 days for all imported cargoes at the Port of Karachi.
The Ministry of Maritime Affairs informed the approval of Resolution 340, through its letter dated April 20, and gave directions to take the action needed to extend the free period of up to 15 days and eliminate demurrage on all imported containers and landing of LCL cargo at the Port of Karachi, including all private terminals.
The KPT also issued a letter on April 22 for an extension of free time to 15 days for all cargo landings from March 25 to April 30, which will be extended until May 31.
However, private terminal operators have refused to allow time and ignore 15 days of demurrage.
Many importers have not been able to accept LCL container and cargo shipments within the specified time until April 30, 2020 and demurrage and containment costs continue to pile up.
Published in The Express Tribune, May 7th, 2020.