Shipping firms seek new contracts for ‘no detention charges’

KARACHI: Traders could rid of detention charges and security deposits on their cargoes if shipping firms are allowed booking till final destinations under a proposed broadening of transit trade beyond Afghanistan and India, officials said on Saturday.

“Transit trade may only be allowed on carrier haulage i.e. shipment should be booked till final destination,” said All Pakistan Shipping Association (APSA). “This way no shipping line would take security deposit or detention charges due to delay in transit by the carrier.”

APSA, in a letter to the customs authorities, said their operation ambit should be expanded to let them deliver goods to the final destination as the country planned to broaden the scope of transit trade beyond Afghanistan and India.

The government decided to tweak the regulatory framework related to transit trade to expand its scope across the land-locked central Asian states. The directorate general of transit trade proposed certain amendments in the regulatory framework as a seamless transit trade would magnify Pakistan’s role in the immediate region and the entire world. Currently, transit through Pakistan is the only viable option for Afghanistan, and both countries signed Afghan-Pakistan transit trade agreement for this purpose.

Shipping lines don’t own transport companies nor has customs clearing licences. As such they would contact the same transport engaged in transit trade, “hence the issue of security deposit and detention charges of the trader would be solved,” said APSA. “It would also enable the lines to deliver the cargo without compromising the safety of the assets.”

APSA said no security deposit and detention would be charged if a container/shipment is booked and freight is paid to shipping line till Afghanistan. Container is moved to Afghanistan at a shipping line’s risk and cost.

“However, if an Afghan shipment is booked till Karachi, a shipping line’s obligation and responsibility under the contract of carriage by sea is ceased at Karachi and onward transportation is arranged by customers at their own risk and cost under another contract of carriage in which shipping line is not a party,” it added.

Since the government announced lockdown to curb spread of the new influenza, plights of economically-troubled traders have aggravated as they couldn’t risk lifting importing consignments in the wake of muted consumer demand and industrial shutdown. Subsequently, they have been clamouring for waiver from such charges and demurrages to weather the unpredictable financial blow caused by the lockdown.

Shipping lines, mostly from private sector, refused to give any discount, citing their own sinking income due to slowdown in port activities around the world hit by the pandemic. Government offered free bonded warehouse facility to traders to accommodate their cargoes, but the space could cater to alone 20 percent of inflows as the rest is dealt by the private sector.

Customs authorities raised the issue of exorbitant container security deposit and container detention charged by shipping companies in case of transit trade.

APSA said the shipping lines did not benefit from security deposit. “This amount collected by foreign companies is deposited in a separate account and cannot be utilised for other purposes. Security deposit is not an asset for shipping lines, but an administrative hassle and liability.”