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MSMEs allege shipping lines, container freight stations defying govt order to waive charges

In a letter to all chairpersons of major ports, Shipping Ministry had on March 31 asked to ensure no penalties, demurrage, charges, fee, rentals are levied by them on any port users for any delay caused by lockdown

Nirbhay Kumar | April 29, 2020 | Updated 15:57 IST
MSMEs allege shipping lines, container freight stations defying govt order to waive charges

Key Highlights

  • MSME traders and manufacturers cry foul over levying of charges by shipping lines and CFSs despite government order
  • Commissioner of Customs in Chennai has also asked CFSs to consider waiver of ground rents, penalties and demurrage charges during the lockdown period
  • Traders complain that levying of charges are adding to the stress when business is already at an all-time low
  • Federation of Indian Micro Small and Medium Enterprises (FISME) has taken up the issue with government

Small manufacturers and traders are crying foul over shipping lines and container freight stations (CFSs) levying detention charges and ground rent despite government advisory to waive them for the lockdown period.

"Shipping companies are levying detention charges and CFS is charging for the ground rent invariably. This is happening despite government issuing advisories to not levy these charges during the lockdown period," said Neeraj Kedia, chairman of fertiliser company Chakradhar Chemicals Pvt. Ltd.

In a letter to all chairpersons of major ports, Shipping Ministry had on March 31 asked to ensure no penalties, demurrage, charges, fee, rentals are levied by them on any port users (traders, shipping Lines, concessionaires, licensees etc.) for any delay in berthing, loading/unloading operations or evacuation/arrival of cargo caused by lockdown.

But despite the advisory, many exporters and importers complained of charges being levied by the shipping lines and CFSs. They raised the issue with the concerned authorities claiming shipping lines and CFSs were defying the government order. Subsequently, Commissioner of Customs in Chennai asked CFSs to consider waiver of ground rents, penalties and demurrage charges during the lockdown.

Sudha Koka, Commissioner of Customs (Chennai-IV), reminded the CFSs that they are an extended arm of the port, and function as the dock, citing a previous Central Board of Indirect Taxes and Customs (CBIC) circular.

This, however, seems to have fallen on deaf ears of the shipment handlers as traders continue to complain about levying of various charges.

Container Freight Stations Association of India (CFSAI) has maintained that a blanket waiver would be counter-productive and encouraged traders not to risk and come forward to take deliveries of imports. This could choke CFSs in no time.

The association noted that importers and custom house agents (CHAs) were probably not disclosing that they are already enjoying huge concessions from them not only on the ground rent but also on the tariff.

But importers and traders are not convinced by the argument and consider levying of ground rent and detention charges as violation of government order.

Gyan Chand, who runs a small-scale chemicals and plastic company Manya International said that shipping lines and CFSs are flouting government order and that too when SMEs are under huge stress.

"We had imported chemicals and polymers and had about 80-90 containers which we have now taken. We paid Rs 12-13 lakh in various charges for the shipments. During the first phase of the lockdown, shipping line did not charge for the delay but now they are charging. CFSs have been charging all along. They are defying the government order," said Gyan Chand.

The MSMEs have taken up the issue with shipping ministry and has appealed for necessary action. Referring to the charges levied by shipping lines and CFSs, Anil Bhardwaj, Secretary General of Federation of Indian Micro Small and Medium Enterprises (FISME) said that the instance shows concerned agencies are not in sync in their functioning.

Also Read: Coronavirus India Live Updates: Punjab extends lockdown by 2 weeks; country's death toll-1,007; cases-31,332

Also Read: Coronavirus impact: Many SpiceJet pilots will not get April, May salaries

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