Container shipping lines have contested a circular issued by India’s maritime administration 10 days ago which said carriers and their agents have unanimously agreed to stop levying some 25 different extra charges on top of base freight rates.
“During a meeting held on 8 August which was chaired by the joint director general of shipping, we had contested the contents of the final report (of a committee set up by the shipping ministry to examine the concerns of exporters and importers on transaction costs) and its recommendations," the Container Shipping Lines Association (CSLA), a lobby for global container lines, said in a 13 September letter sent to the DGS. Mint has reviewed a copy.
“We had brought to the attention of the chair that consensus was formed on some of the items of charges in the report, but on other items there was no consensus," Deepak Tewari, chairman, CSLA, wrote in the letter.
“We have now noticed that items on which there was no agreement by CSLA have been included in the list of items your circular (of 7 September) stated there was a general consensus," Tewari said adding that the minutes of the 8 August meeting were not circulated resulting in “discrepancies in the circular and an incorrect statement of facts".
Tewari said there was consensus among stake holders on 15 of the 25 charges listed by the director general of shipping (DGS) in the circular, while the CSLA had not agreed to six other key charges including terminal handling charges (THC) and inland haulage charges (IHC).
On four charges, the carriers lobby had given a conditional agreement.
“CSLA members will continue to charge any charges/rates which have not been agreed/consented to be charged by CSLA," Tewari wrote in the letter, urging the DGS to amend the circular based on the consensus clarified by the carriers.
Tewari later explained to Mint that what CSLA had agreed to where actually charges that are not charged by the shipping lines/agents. “The shipping lines do not charge such charges. Our charges are displayed on our websites which are connected to the port websites. Because of this, our charges are transparent".
“But there are freight forwarders, custom house brokers, there are hundreds of other middlemen in this whole game who have lot of other charges and CSLA said the charges those people are charging we, in any case, don’t believe in those charges and we are not going to charge it. So there was consensus on that. But, the DGS added THC and IHC to the list which there is no way that a shipping line is going to agree to not to charge landside charges of that nature", Tewari added.
The retort of the container lines has turned out to be an embarrassment for the DGS and the shipping ministry which has been seeking to forge a consensus among various stake holders in the maritime logistics chain to end a long list of extra charges levied on ocean shipments on the back of strong lobbying by the shippers (cargo owners lobby).
The DGS declined to comment on the letter written by CSLA.
A shipping ministry mandated committee comprising representatives from the DGS, CSLA and other stake holders had submitted a report to the government on transparency and reasonableness of various charges levied by shipping lines in EXIM trade.
“There was a general consensus among the stakeholders in the said committee meeting and they unanimously recommended that the following (extra) charges should not be levied by shipping lines/carriers," Subhash Barguzer, a deputy director general of shipping wrote in the 7 September circular.
The recommendations were reconfirmed by the committee members and stakeholders during a meeting convened by the DGS on 8 August to work out the modalities to implement the recommendations of the panel, Barguzer wrote in the circular.
“In view of the consensus among 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," Barguzer wrote in the circular.