Tanzania Shipping Agencies Corporation (TASAC) has raised concern over resistance by some shipping agents to implement a circular issued last month for reasons linked to misunderstanding of the orders.
The circular dated 10th of June extended the period of the return of the empty containers to shipping lines to cushion importers against the high demurrage charges occasioned by the delays caused by strict movement of cargo to contain the spread of Covid 19 across the borders, which have been adopted by various interveners.
The order extended the period of return of the empty containers for Rwanda through the Rusumo border from 35- 55 days and DRC through the same border from 55 to 80 days. Cargo to DRC through the Tuduma border had seen the return of empty containers extended from 55- 65 days with cargo Zambia enjoying an extension by 10 more days from 40 to 50 days. This was to be effected on all the containers whose delivery order was issued on 15th March 2020.
In a circular dated 3rd of this month, TASAC sought to clarify the earlier circular, which it says was prompted by the challenges in accessing cargo clearance documents as well as cargo in a timely manner.
Containers released on the cut-off dates and onward after the 15th March 2020 have to be treated the same when determining demurrage as the cargo after the circular. This is irrespective of whether the demurrage on such containers was paid or not on the date of issuance of the circular, TASAC said.
The corporation further directed that when transactions are assessed based on the extended demurrage free period and a refund has to be made to a consignee, shipping agents are required to prove that such a refund is known by the respective consignee.
“Shipping lines shall compile all refunded cases, with contact details of beneficiary consignee, and submit them to TASAC for confirmation of receipts of the refund. The report to TASAC will have to be submitted by 30th September 2020,” the circular said.
Last week Kenya also extended the return of the empty containers both for transit and domestic cargo at 7 and 3 days respectively.
Importers are supposed to return containers to designated yards in Mombasa within 14 days for domestic cargo and up to 45 days for transit goods, failure to which they start accruing storage charges or what is technically known as demurrage.
Demurrage charges start from $10 (Sh1, 000) per 20-foot container per day after expiry of the free period, and rise daily. While the 40-foot container attracts demurrage of $20 (Sh2, 000) per day, these charges can rise to more than $100 (Sh10,000) per container per day, depending on the number of days the importer stays with the container for which shipping line.
“Under the prevailing circumstances, it is important that delays associated by the cargo clearance and return of the empty containers prior to Covid 19 reflect the circumstances on the ground,” a notice signed last Friday by Kenya Maritime Authority Maj (RTD) Director General George Nyamako reads in part.
The extension period of the return of the empty containers, which took effect on 1st July this year will stay throughout the period of Covid 19, according to the KMA notice.
This was a major victory for the Federation of East African Freight Forwarders Associations (FEAFFA), an umbrella body of the region’s clearing agents, which has been at the fore in the region in seeking to engage regional authorities on issue causing delays in supply chain that come with high associated costs.
Private sector players had also written several letters to the two port authorities seeking extension of free storage period for domestic cargo to from 4 to 14 days and from 9 to 21 days for transit cargo.
“We welcome the recent concession by the two ports. It will now offer some reprieve and allow our members to carry out their business operations smoothly with costs to shippers descending and eventually benefiting the end user,” FEAFFA President Mr. Fred Seka told Freight Logistics.
The Tanzania Freight Forwarders Association (TAFFA), Kenya International Freight and Warehousing Association (KIFWA) had also lobbied for this reprieve citing delays in arrival of original commercial documents required for cargo clearance, which are traditionally moved by air were heavily affected by closure of international airports.
“Border efficiency has reduced due to a reduction in manpower by the trade facilitation agencies, introduction of addition procedures such as testing for COVID19, reduced working hours, restrictions on the movement by customs agents among others,” concluded the letter.