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Stuck Up Containers: A Windfall of 5000 Percent for Shipping Lines/ Terminal Operators

Karachi, February 08, 2023 (PPI-OT):Chairman Businessmen Group and Former President Karachi Chamber of Commerce and Industry (KCCI) Zubair Motiwala, while expressing sheer disappointment over delays in resolving the issue of stuck- up containers, stated that despite commitment made by representatives of shipping lines and terminal operators at a meeting held at KPT two weeks ago in presence of Maritime Minister, Commerce Minster, Secretary Commerce, Chairman KPT and representatives of State Bank of Pakistan wherein they assured to provide maximum relief on demurrage/ detention charges, no announcement has been made in this regard so far, triggering a lot of anxiety amongst members of business and industrial community.

Replying to queries raised during a press conference held here on Wednesday in connection with the launch of 18th My Karachi Exhibition, Chairman BMG said due to delays in resolving stuck-up containers issue, the cost of imported consignments has risen sharply due to extraordinary demurrage/ detention charges to such an extent that they have surpassed the actual value of goods inside the containers in many cases, hence, no importer finds it feasible to get the consignments cleared with such heavy demurrage/ detention charges. The manufacturing sector was under immense pressure as all of the inventories have exhausted and no imported raw material was available for carrying out further production while the traders were almost out of business.

“Payment against LCs at sight were also not being made which must be done at the earliest. Around 5,630 containers remain stuck up since last three months which means that the shipping companies and terminal operators have a windfall profitability of around 5,000 percent or even more and they have been refusing to forfeit the unusual demurrage and detention charges which, in normal circumstances, wouldn’t be reaching to such an exorbitant level”, he said, adding that the Government of Pakistan should play a role in real terms and stop this windfall for shipping companies and terminal operators as they would have never earned such an exorbitant profit in the normal circumstances.

He was of the view that although the inflation was due to dollar-rupee parity but another major reason for sky-rocketing inflation was delays in release of containers as imported consignments of pulses, grains and many other commodities were not being released, creating dire shortage of these products and further nurturing the inflation. Moreover, the limited production activities at general and export-oriented industries due to unavailability of raw materials, which also remains stuck-up at the port, was another key reason for inflation.

He said that although the State Bank of Pakistan assured clearance of those containers, whose payments have been arranged from sources outside Pakistan, but, unfortunately, the commercial banks were creating unnecessary hindrances, which has intensified the hardships for perturbed members of the business and industrial who may soon become bankrupt if this serious issue stands unresolved. He informed that delays in release of payments to the suppliers was fetching a bad reputation for Pakistan because in this scenario, no supplier wants to carry out any deals with Pakistani importers as the payments to suppliers have been delayed for a longer period which was neither in favour of businesses nor the already ailing economy.

He urged the government to look take notice of the situation and pressurize the shipping lines and terminal operators to fulfill their commitment by providing maximum relief on stuck up containers so that clearance process could be expedited as delays in clearance of containers would destroy businesses of many parties who were at the verge of bankruptcy and also make commodities unaffordable for common man.

For more information, contact:
Director Press/Electronic Media and Public Relations
Karachi Chamber of Commerce and Industry (KCCI)
Aiwan-e-Tijarat Road, Off Shahrah-e-Liaquat,
Phone: +92-21-99218001-09
Fax: +92-21-99218040

The post Stuck Up Containers: A Windfall of 5000 Percent for Shipping Lines/ Terminal Operators appeared first on Business News Pakistan.

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