Apparel makers demand waiver on container detention charge
Importers such as apparel-makers have called for a full waiver on the detention charges levied by the shipping lines for holding containers beyond the free time because of the coronavirus-induced shutdown.
Detention charges include the money that merchants pay for the use of container within the terminal beyond the free period and the fee that merchants pay for the use of container outside of the terminal or depot beyond the free period.
Although the director general of the Department of Shipping on April 29 issued a notice advising shipping lines not to impose any container detention charge on import and export shipments for the period from March 26 to May 5, global shipping lines and their local agents have refused to comply, saying the sector is bleeding because of the pandemic.
The Bangladesh Shipping Agents Association (BSAA) and the Bangladesh Container Shipping Association requested the DG Shipping in separate letters on April 30 to withdraw the notice and allow their member firms to get by in this hard time.
On May 5, the World Shipping Council sent a letter to the principal secretary of the prime minister and the executive chairman of the Bangladesh Investment Development Authority calling for a withdrawal of the advisory.
The Bangladesh Garments Manufacturers and Exporters Association (BGMEA) has requested the Chattogram Port Authority to instruct shipping lines not to impose the charges and refund the money that has already been realised.
Usually, containers can stay from five to 21 days without incurring any charges depending on the contracts with shipping companies. After that, $5 to $120 are charged for a container per day in detention charges.
Hasan Abdullah, chairman of the port and shipping committee of the BGMEA, called the DG Shipping's notice a pragmatic step.
Consignees like the BGMEA members have been hit hard and subsequently strapped of cash, so they will not be able to pay huge amounts of detention fees.
A major portion of the import consignments, which are mainly raw materials for garment factories, are customs-bonded goods and need to be stored in bonded warehouses, which were already running at full capacity.
But the shipping lines in gross disregard to the notice have continued to collect the charge, Abdullah said.
Apparel makers are being forced to pay Tk 1.5 lakh to 1.75 lakh per container in charges. Otherwise, the shipping agents are not issuing the delivery orders, he said.
The offices of DG Shipping in India and New Zealand also issued similar orders and the shipping lines that also operate in Bangladesh have implemented the directives in the countries.
Transport shortage, closure of most factories owing to the lockdown and limited working hours at customs, banks and other offices caused the detention of containers, said BGMEA Director Anjan Shekhar Das.
Foreign mainline operators, the carriers of the containers, are the sole authority to impose or waive the charges, said BSAA Chairman Ahsanul Huq Chowdhury.
"Shipping business has been the worst affected sector because of the fallout of the coronavirus pandemic," he said.
Due to the port congestion last month, feeder vessels had to wait 16 to 18 days at the outer anchorage and berth stay time rose by another six to seven days, resulting in overall 25 to 26 days of turnaround time.
This has inflicted a huge amount of losses on shipping lines as they have to pay the charter fare for each day, he said.
"Last month, we sent a letter to the shipping ministry calling for a review of several port charges and tariffs to protect the shipping companies from the losses. But we received no response."
If the charges are not reviewed or waived, it will not be possible for the mainline operators to consider waiving the detention charges, Chowdhury said.