Container lines offering Indian shippers more free time

Container lines offering Indian shippers more free time

Container lines active in trades out of India have effectively extended waivers until mid-May for import cargo that has overstayed free time. Photo credit: PSA India.

Container lines active in trades out of India, heeding government calls to provide shipper relief from detention penalties, have effectively extended waivers until mid-May for import cargo that has overstayed free time generally given for storage. 

The move is expected to put an end to a rash of disputes concerning import containers that beneficial cargo owners (BCOs) failed to collect in a timely manner because of what they say are reasons beyond their control amid the nationwide COVID-19-linked lockdown now lasting until May 17.

Terminal gate in-and-out activities and inventory management at container freight stations (CFSs) have become an onerous chore in recent weeks with congestion fears developing across busy ports, particularly Jawaharlal Nehru Port Trust (JNPT).

Based on customer advisories issued by leading carriers that JOC.com has seen, BCOs have been offered an extended free time window from March 22 to May 3 that will in fact run until approximately May 17 given the normal two weeks of free time offered by carriers. Mediterranean Shipping Co., CMA CGM, Ocean Network Express (ONE), Hapag-Lloyd, Evergreen Line, and APL are the notable carriers who have already sent out such notices. 

“Further to various guidelines issued by the Ministry of Home Affairs, Shipping [Ministry] & Director General of Shipping ... and [an] extension of the nationwide lockdown until May 17, CMA CGM India reaffirms its commitment in ensuring all required facilitation to the trade for unhindered services and de-clogging of our logistics infrastructure,” the liner said.

“Free time is only applicable for container detention and does not include storage cost, plug-in and monitoring cost incurred at ports, CFSs or ICDs [inland container depots],” MSC (India) said.

Maersk’s waiver plan ran from March 22 to April 21, in addition to free time granted as part of contractual terms. But the company has lowered its published detention rates that apply upon the expiration of free time. 

“Through this move, our intention is to provide our customers with an incentive to clear their goods and reduce the pressure on the infrastructure,” Maersk (India) said in a statement to JOC.com. “Our intention is clear — we want to support the logistics ecosystem as much as possible and ensure that we keep the supply chains moving, which are even more crucial in the current crisis.”

Case against blanket waivers

Countering widespread relief demands, the Container Shipping Lines Association (CSLA), which represents foreign carriers out of India, has held a firm view that current market conditions do not justify a blanket waiver policy, noting carriers are losing business and incurring higher operating costs when equipment is idle.

“The notifications from various authorities on extended blanket waivers of container detention charges are proving to be counterproductive and hence, need to be reviewed,” the CSLA earlier told JOC.com. “Instead, it should be left to the [shipping] lines themselves to consider each case commercially, on the merits of the case. After all, no line would like to lose the support of its customers.”

The CSLA also noted with plummeting demand due to the COVID-19 pandemic, carriers have blanked about 50 sailings out of India since March 25, besides large-scale service rationalizations, which it said calls for carriers to be economically supported via lower port charges.

CFS owners have also been under government fire for not heeding shipper requests for relief from storage charges, and it remains to be seen if they will follow suit announcing a new, broader policy on such collections. The revised carrier detention mandate is expected to build more heat on defiant inland logistics providers as shipper complaints continue to land on the government’s doorstep.

While the coming days could provide better evidence on how lenient penalty policies have helped drive up sagging delivery demands, containerized rail operators along with port stakeholders are going the extra mile to take advantage of pent up freight demand resulting from truck capacity issues due in large part to driver shortages. JNPT’s April rail contributions hit a new high at 22.4 percent out of 499 trains. Container Corporation of India (Concor) earlier this month put out a notice offering to haul empty containers at no cost as part of a marketing strategy.

Reflecting the COVID-19 turmoil, India’s major public ports suffered a sharp fall in container movement last month, down 37 percent year over year to 542,000 TEU, JOC data shows.

 Bency Mathew can be contacted at bencyvmathew@gmail.com.