Shipping Industry up in arms over fees hike for select services
The shipping industry vehemently oppose the government’s action to increase fees for select services from this month a move justified by Shipping lines and their agents but strongly opposed by importers.
A collective of business chambers and associations have made a joint representation to the Minister of Ports, Shipping and Aviation Nimal Siripala De Silva stating that these newly introduced provisions under the Extraordinary Gazette Notification No. 2304/24 violate the principles of market forces.
“This adversely impacts the cost of living and competitiveness of industry overall in terms of both imports and exports,” it was stressed.
The chambers and associations include the Joint Apparel Association Forum (JAAF), National Chamber of Exporters, Sri Lanka Association of Manufacturers and Exporters of Rubber Products, Sri Lanka Shippers’ Council, Tea Exporters’ Association, Sugar Importers’ Association and Essential Food Commodities Importers and Traders Association
The main concerns detailed in the letter to the Minister of these anti-competitive and non-transparent regulations are: Increased costs due to intervention by the authorities in price fixing; Removal of the negotiation capability of private parties as service providers and service receivers and Misinterpretation relating to freight and other costs.
The Cabinet Ministers approved to publish the amended Licensing of Shipping Agents Bill in the Government Gazette and to submit the same to Parliament for approval.
The tanker operators’ regulations were issued in the year 2005 subject to the provisions in Sections 8 to 10 of the Licensing of Shipping Agents Act No. 10 of 1972.
However, following the Judiciary’s decision to revise the 10th regulation of that Act, on 4 July, the Cabinet Ministers approved to introduce amendments required to the Licensing of Shipping Agents Act No. 10 of 1972 including the relevant revisions.
As per the Extraordinary Gazette dated 20 October 2022, the revisions are concerning the regulations in the Licensing of Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers and Container Operators Act No. 10 of 1972. Washing charges, De-stuffing charges and Transport cost have been included among cost recovery fees.
It has specified a new maximum Delivery Order (DO) fee for import shipments. For FCL import shipments – maximum DO fee that should be paid by an ultimate consignee/importer (except Freight Forwarder/Consolidator) is Rs. 18,000.
Accordingly, from Shipping Lines to freight forwarders and Shipping Lines to Consolidator, the maximum Liner DO Fee should be Rs. 14,800.
For LCL import shipments the maximum DO fee that should be paid by an ultimate consignee/importer is Rs. 20,500.
Accordingly, from Consolidators to freight forwarders – the maximum DO fee should be Rs. 16,500. The service provider shall charge from ultimate consignee equalling rupees per maximum of $ 8 per 1 CBM (cubic metre) as a cost recovery fee destination as applicable for the carriage of goods.
Shipping agents said service providers had asked for an increase along with soaring inflation and other cost increases and accordingly representations were made to Minister Nimal Siripala de Silva.
It was pointed out that the legislative changes were necessary to properly recover the actual cost.
However, shippers alleged the move is anti-competitive “price fixing” and manipulative and non-transparent. “Consumer will have to bear the additional cost when it comes to imports whilst exporters’ input cost will increase,” they said.