Even as Kwaku Ofori Asiamah, the Minister for Transport, via a letter has directed shipping companies to waive their demurrage/detention charges – fees importers pay for overstayed containers – with good intention, the lack of proper consultation among stakeholders, especially shipping companies, could render the directive a fantasy.
A B&FT review and analysis of the letter and its subsequent reactions and repercussions show that importers, who would have been the biggest beneficiaries of this waiver, could be left with high costs to bear as they struggle with COVID-19-induced challenges when clearing goods from the ports.
The Ghana Shippers’ Authority (GSA), in a move to back the minister, also issued a letter to all its stakeholders on April 20, 2020 saying: “We hereby inform you of the suspension of all applicable time-related penalties – i.e. demurrage/detention and storage rent charges in the clearance of cargo at the port – in the wake of the COVID-19 induced restriction, effective March 30,2020. In other words, demurrage/detention and storage rent charges on all cargo which has remained uncleared at the port from March 30, 2020 to April 19, 2020 are to be waived.”
The letter explained: “The directive is to ensure that, in their bid to avert the accumulation of the above mentioned time-related penalties, shippers and other stakeholders do not take actions which have the tendency to jeopardise government’s efforts at curbing spread of the disease (COVID-19)”.
This letter means that the Ghana Ports and Harbours Authority (GPHA) has no option other than to abide by the directive. Already, the GPHA has put in measures to implement the waiver; but shipping companies are seeking more clarification and approval from parent companies, generically known as their principals, before they can comply.
Despite the move from government and its agencies to alleviate the plight of importers, President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng, told the B&FT in an interview his members have sent through several reports that shipping companies are disregarding the directive.
“Not all the shipping lines are respecting the waiver directive. They tell you they have communicated to their principals and are awaiting a response. For some, their principals are seeking more clarification and use some other excuses that they give. As importers we have a business to operate, so how long can you tango with a shipping company? Therefore, we pay the necessary fees to get our goods out for business,” Dr. Obeng told this paper.
From the above, importers have begun complaining about the posturing of shipping companies. Almost all the over-one dozen shipping companies are yet to comply with the waiver; they may not ever comply until a proper consultation is done, which will see both government and the shipping companies exhibiting some mutual sacrifices.
For instance, shipping companies continue to pay tariffs to the Ghana Shippers Authority and the Ghana Maritime Authority. Also, port dues, cargo dues, pilotage, stevedore, wharfage are among some fees that shipping companies continue transferring to state coffers. These charges run into the thousands of dollars for each company, and they want to know if government will offer some relief in exchange for the demurrage/detention waiver.
It has been established that initial cost of the deadly pandemic to the economy – which includes what the country will lose in terms of revenue and measures to contain the disease, according to the Finance Minister Ken Ofori-Atta – is estimated to be at least GH¢9.5billion, representing 2.5 percent of GDP.
Government would want to rake in enough from all the little revenue, particularly at the ports, to shore-up its accounts as it is losing hugely in the fight against COVID-19.
The shipping companies are not ready to offer a waiver until they are sure of a fair playing field, and it doesn’t seem the Transport Minister applied his mind to these nuances before issuing the directive. So, until proper consultation, the waiver might remain an indefinite phantom.
Despite the impasse, shipping companies have asked importers to submit requests for a waiver or an extension of the 21-day grace period to clear goods for redress.