KARACHI – The country’s exporters and importers are faced with losses running into millions of dollars that directly impacts on the cost of production and doing business in Pakistan, where there is an alarming lack of specific and effective regulatory laws for the ports and shipping sector.
For several years, traders have been complaining of what they refer to as ‘dirty charges’, being taken from them under various heads by the shipping companies, their local agents, port and terminal operators as well as freight forwarders on and off at the country’s ports.
They allege that logistic service providers are fleecing them at will in the name of ‘unjustified’ charges like terminal handling charges (THC), research and development charges, scanning charges, examination charges, container cleaning, damage claims, labour charges, rent of premises and even ‘other’ charges, when the service providers are unable to give a suitable name for the levy. Traders claim that, on average, their annual payments to the container terminal operators amounted to at least $60 million under various ‘fictitious’ heads.
“For the last six years we have been debating these charges, but to no avail,” Nasir Mehmood told the first meeting of the Shipping and Multi-Model Transport (SMMT) subcommittee at Karachi Chamber of Commerce and Industry (KCCI).
Chaired by KCCI Senior Vice President Tallat Mahmood, the meeting was attended by, amongst others, SMMT Subcommittee Chairman Zahid Masud Jan, KCCI Advisor to President Captain Anwar Shah and members of the KCCI managing committee. Pakistan Ship Agents’ Association (PSSA) Chairman Muhammad A Rajpar represented the shipping lines and their agents in the meeting. Mehmood, former chairman of the SMMT subcommittee, said the shipping lines were charging the traders with exorbitant levies under one head or another.
“A trader informed me that a shipping line had charged him an additional $50 on account of CEF (currency exchange factor),” he said. Later, Nasir told Pakistan Today that MK Lines and two other shipping firms were taking the new levy.
He said no effort of the traders would bear fruit until their representative bodies push robustly for a single powerful regulatory authority. On this, the SMMT subcommittee chief said the ministries of ports and shipping, commerce and finance were yet to come to a decision on who was to become the single regulatory authority. The trader, however, put his weight behind the ministry of finance to assume the responsibility.
Former Director General Ports and Shipping Captain Anwar Shah told the meeting that terminal operators were also charging the traders with $10, a levy which had been rejected by the ministry of ports, when it had been under him.
Responding to various queries of the traders, PSAA chief said shipping lines such as Mearsk, United Marine, MSC and CMA were ready to facilitate well-reputed traders through charging a container security deposits ranging from zero to Rs 15,000 only.
On other reservations of the traders, the shipping agent stressed on institutional engagement from both sides, saying he had called for a meeting of the shipping companies and their agents to review the matter. Rajpar replied in the affirmative, when asked whether the issue was to be resolved through legislation only.
However, government efforts to enact the delayed Maritime Logistics Service Providers Registration Bill, 2010 seem to have fallen prey to customary red tape, with the stakeholders scheduled to meet for the sixth time on January 27 to up to rest any outstanding issues. It is pertinent to mention that at least five meetings on “Harmonization of Scale of Charges” have already been arranged at the KPT head office by stakeholders on January 18, February 26, June 11, October 11 and December 29, last year. Traders are also less concerned about the issue as they always feel free to pass on the burden of allegedly excessive ports and shipping charges to the consumers who in every likelihood will emerge the ultimate sufferer.
The seriousness of traders towards the important issue may well be surmised from the fact that it took the KCCI subcommittee some six months to meet again. The last meeting of the traders’ body was held on July 6 last year.
Even during Wednesday’s meeting many of the participants, including the chair, looked restless and left the hall before the chairman announced the end of the event.
It is noteworthy that Islamabad after deep deliberation, in several rounds of interminable talks with the stakeholders, has decided that it would enact the Shipping Trade Practices Bill, 2008 of India with ‘suitable amendments’ to regulate the local logistics service providers, specially the freight forwarders and ship agents.
