Bengaluru: In a breakthrough, the shipping ministry has succeeded in getting shipping lines and their agents to agree not to levy some 25 different charges that are typically not included in the so-called bill of lading but are arbitrarily collected from cargo owners, as the government seeks to bring transparency in transaction costs of export-import (EXIM) trade.
A bill of lading is a document issued by a carrier or his agent to acknowledge receipt of a shipment of cargo.
India’s maritime administration, the directorate general of shipping, issued a circular on 7 September advising shipping lines/agents not to levy these 25 charges after a government-appointed panel that included a representative from the Container Shipping Lines Association (CSLA) recommended such a step following a consensus among stakeholders.
CSLA is a body representing container shipping lines operating in India.
“In view of the consensus among the various stakeholders such as shipping lines, EXIM associations and trade bodies, the shipping lines are hereby advised that the charges as listed should not be levied by shipping lines/carriers/agents for the transportation of EXIM goods as a good/best practice," Subhash Barguzer, a deputy director general of shipping wrote in the circular.
“This is a very significant development because it shows the government’s commitment to bring about transparency in the transaction costs of EXIM trade," said R. Venkatesh, president of the Western India Shippers Association (WISA), a body representing exporters and importers in India’s western region.
“Eventually, what is going to happen is that any charge that is not shown in the bill of lading cannot be charged. Anything that is not shown in the bill of lading cannot be recovered. Basically, the intention is I should know at the time of contracting what is going to be my cost. That is the basic principle of contracting," Venkatesh added.
Shippers such as WISA have for long protested the arbitrary charges collected by shipping lines/agents that are outside the bill of lading.
“The charges levied by shipping lines/agents are often arbitrary," said an official at trade lobby group Federation of Indian Export Organizations, or Fieo.
Some of these charges are imposed at short notice, upsetting cost sheets given to foreign buyers, said the Fieo official, who declined to be identified.
Extra charges being scrapped: winter season surcharges, survey charges, lift-on-lift-off (Lo-Lo) charges, cost recovery charges, vessel traffic charges, container monitoring charges, detention invoice release charges, late delivery order (DO) charges, CFS receiving charges, supply chain security fee, CBL pass through charges, warehouse special charges, transporters union charges, urgent examination expenses, ENS charges, late DO release charges, BL print charges at destination, DO revalidation charges, import general manifest (IGM) charges, empty return at different port charges, empty yard offloading charges, de-stuffed delivery charges, inland hauling charges (IHC), terminal handling charges (THC) and change of destination (COD) charge.