Container Costs at Indian Ports Crippling Importers
 March 31, 2020 - Indian recyclers are appealing for relief from detention and demurrage charges until May, saying they are a ‘massive burden’ on an industry crippled by the country’s lockdown because of the Covid-19 pandemic.
The fees, normally a routine part of the business between shipping lines and importers, are building up as cargoes are stuck at ports following the national lockdown introduced on 25 March and due to end on 15 April.
The call for relief comes from the Material Recycling Association of India (MRAI) which has more than 1200 members, including most regional trade associations. It claims to speak for more than 20 000 small, medium and large enterprises employing 2.5 million people.
Containers building up
MRAI points out that containers are continuing to arrive at various ports and inland container depots (ICDs) across India but, due to the lockdown, its members cannot take deliveries and make payments. It says ‘The entire supply chain and supporting infrastructure (truck drivers, factory workers) is not available. This is now leading to piling up of containers at these ports and ICDs which will soon start incurring heavy detention and demurrage.’
Demurrage is charged by ports for containers still on the dockside after a specified number of day and detention covers the period between the container being picked up and returned empty.
MRAI maintains recycled scrap is an important raw material for the Indian secondary manufacturing sector, much of it imported by large shipping lines.
No response
‘MRAI, along with its members, have been trying to contact the shipping lines thereby requesting them for waiver of detention charges on delay in clearing containers owing to the lockdown of the country. However, [they] have not shown any positive response.’
It adds: ‘Incurring heavy detention charges will be a massive burden for our trade and industry. Since China’s coronavirus outbreak, metal prices have declined by a massive 25-30%. India’s secondary metal producers had booked their raw material … from overseas suppliers based on the prevailing price about three months ago [but] the decline in metal prices has made import of raw materials costlier.’
MRAI also notes that port congestion is a major worry for secondary metal and paper recyclers as shipping companies are demanding detention charges for containers blocking ports. ‘Since, shipping companies have declared themselves operational, they are asking material scrap importers to clear their consignments or pay penalty for engaging containers beyond the agreed transportation period.’
Call to Government
President Sanjay Mehta says the shipping companies see the situation as a business opportunity and are charging US$ 52 per container per day for 20-foot containers and US$ 104 for 40-foot containers.
‘This uncalled for charge will not only erode our working capital but also will root us out of business,’ Mehta adds. ‘During this period of lockdown, we expect stockpiles to build to the tune of around a million tonnes of imported metallic scrap at various ports. [The] material value will become zero if the shipping companies charge detention demurrage for 30 days or more.’
He quotes a container of iron scrap being worth US$ 5 000 and a detention fee of US$ 52 per day would amount to US$ 1 750 in a month. Lumping in ground rent, freight and transportation charges would also add to the cost.
‘We, therefore, urge the government to grant us relief and waive off detention, demurrage and all other such charges until 15 May, 2020 at the all ports and ICDs in India,’ says Mehta.
Charges suspended?
In response, the Directorate General of Shipping of India has issued an order ‘advising’ shipping lines not to impose demurrage charges until 7 April. There are reports of some lines, including Maersk, MSC and Safmarine, suspending such charges.
SOURCE: Recycling International |
March 5, 2020 - The Oregon International Port of Coos Bay (Port) is pleased to announce the opening of the Lost Creek Rock Products Coastal Reload Yard on the North Spit in Coos County, Oregon. This multi-modal, multi-commodity rail to truck and truck to rail terminal will serve the entire Southern Oregon Coastal Region with a vital link to deliver competitive access to domestic and global markets.
Jan. 25, 2020 - On December 9, 2019, Euroports received a new Konecranes Gottwald Model 7 Mobile Harbor Crane and high volume grab for their dry bulk operations at the Euroports Terminal TA168 in Antwerp, Belgium.
Jan. 24, 2020 - The Maritime and Port Authority Singapore (MPA) has implemented temperature screening at all sea checkpoints for all inbound travelers following the coronavirus in China.