Lockdown: Metal scrap importers risk losing Rs 80,000 cr to shipping lines

Industry sources said that over 250,000 containers are stranded at Indian ports on account of the complete lockdown enforced to check the spread of Covid-19 pandemic

Importers of metal scrap and paper recycling industries run the risk of losing more than Rs 80,000 crore by way of demurrage or detention charges as shipping lines and container freight stations (CFS) are acting in blithe disregard of guidelines issued by the Ministry of Shipping.

Industry sources said that over 250,000 containers are stranded at Indian ports on account of the complete lockdown enforced to check the spread of virulent Covid-19 pandemic. As the pandemic induced lockdown has reduced the availability of manpower and crippled essential services, obtaining clearances is consuming more time than what was customary.

In view of this extraordinary situation, the Ministry of Shipping has issued comprehensive directions to major ports for remitting penal charges, demurrages, detention charges, dwell time charges, anchorage charges, penal berth hire charges and performance related penalties levied on port users, including the shipping lines.

“It is now decided that for the second lockdown period, the shipping companies or carriers shall not charge, levy or recover any penal charges, demurrage, ground rent storage charges in the port, detention charges, dwell time charges, additional anchorage charges, penal berth hire charges, vessel demurrage or any performance related penalties on cargo owners or consignees of non-containerised cargo for the period from April 15 to May 3 due to delay in berthing, loading/unloading operations or evacuation/arrival of  cargo”, read an order from the Directorate General of Shipping, Mumbai.

However, Container Freight Stations Association of India (CFSAI) has issued a letter, denying giving any waiver on demurrage charges, citing that they are governed under Handling of Cargo in Custom Area Regulation (HCCAR) 2009, whereas none of the ministerial and departmental orders have mentioned the HCCAR Rules. Similarly, foreign shipping companies have refused to adhere to guideline orders.

“Such is the indifference and unsympathetic attitude of the shipping lines and CFSs across India. They are not ready to heed to or implement the guidelines issued by the Ministry of Shipping, Government of India for waiving off the unjustified levies that they charge on import cargo”, said an aggrieved importer.

 

The situation has led to a stacking of hundreds of thousands of imported scrap containers at ports, jeopardising the livelihoods of 300,000 people who depend on the recycling sector for their livelihood. Women make up 30 per cent of this workforce, engaged in segregation of scraps before melting.

“The 6000-odd MSME (micro, small & medium enterprises) units in the Recycling segment from metal and paper are adhering to the government order and giving salaries to their employees who are mainly from the weaker sections of the society. But, the foreign shipping lines and their associates who do not even listen to the Ministry of Shipping guidelines” said Sanjay Mehta, President, Material Recycling Association of India (MRAI).

With survival of the 6000-odd MSME units in metal recycling at stake, MRAI has urged the Government of India to flag the issue of waiver of demurrage charges with the shipping lines and CFS, declare recycling activities as ‘essential services’, make available additional working capital over the stipulated limits and waive off interest on late payment of custom duties.