Demurrage charges being waived as containers clog ports amid lockdown
Statesman Report
KARACHI: Pakistan has decided to waive port charges to clear the containers piling up at Karachi seaports after the country entered strict lockdown amid rising coronavirus cases, maritime ministry official said.
“The government has decided to waive demurrage and retention charges which will now be borne by national exchequer,” Mahmood Moulvi, adviser to ministry of maritime affairs, told Arab News. “The decision would be notified in the next few days,” he added.
A large number of imported consignments are piling up at port terminals due to absence of transportation.
“Around 20,000 containers with import and export goods are estimated to be stuck at the ports due to lockdown,” said Khurram Ijaz, vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
“Many traders may go bankrupt if the government did not intervene in time,” Ijaz said, adding that relevant authorities including the ministry of ports and shipping and Karachi Port Trust (KPT) are silent as “no official decision has been announced regarding port charges.”
Karachi which houses two main harbors — the Karachi Port and Port Qasim — is almost under complete lockdown since March 23 following the virus outbreak.
The lockdown and restriction on mass movement has resulted in imported raw materials and finished goods to pile up at warehouses and factory outlets that has compounded the situation at Karachi’s ports, which handle an average 1500 to 2000 containers on a daily basis.
Stakeholders say the importers are unable to move the containers as warehouses and factories have no space to accommodate new cargoes though the ports operate as per routine.
“Importers are not lifting the cargoes and now the pressure is mounting on the container terminals,” Aasim Siddiqui, Chairman of All Pakistan Shipping Association (APSA) told Arab News. “They want the demurrage and retention charges waived and are using containers and terminals as storage area.”
Exporters are also adversely affected by the lockdown as most of the export orders are either being canceled or pushed for postponement.
“Some buyers are asking for shipment of goods but we don’t have the orders ready due to closure of factories,” Shabbir Ahmed, chairman of Bedware Exporters Association (BEA), a major component of textile exporters, told Arab News. “The containers cannot be loaded and unloaded as no labor is available due to lockdown,” he added.
Pakistan expects the global economic meltdown and trade tensions to further impact the country’s economy which is now projected to grow at 2.6 percent during the current fiscal year, according to ministry of planning.