Delays in collecting cargoes during the movement control order (MCO) period have resulted in accumulated charges, causing financial burden to local shippers and manufacturers, said Malaysian National Shippers’ Council (MNSC) chairman Datuk Dr Andy Seo Kian Haw.
“We call for the Ministry of Transport’s (MoT) intervention once again, this time with the shipping lines and we hope that the MoT will urge them to waive or to provide discounts on demurrage and detention charges due to delays in the collection of cargoes held during the MCO period,” he said in a statement.
The MNSC commended the timely intervention of the MoT in urging port authorities to waive port-related charges have led Port Klang, as well as the port authorities of Johor and Sabah to grant a waiver of port storage charges during the MCO period, which has greatly reduced the burden of financial losses that shippers will need to bear during this difficult period.
Seo said the government intervention is important to ensuring shippers ability to cope with the situation and their survival during this unprecedented period, failing which there would be a detrimental impact on the economy.
Besides that, he noted that the International Maritime Organisation Low Sulphur Fuel Surcharge was imposed collectively by shipping lines, effectively Feb 1 this year at a fix rate of RM9 per metric or cubic metre (m3) on top of the current applicable bunker surcharge.
“Furthermore, the quantum has been fixed based on the increased bunker. However, in the past few weeks, the bunker price has come down significantly. The MNSC is of the view that there should not be a fixed rate that applies to everyone as it infringes the competition law and does not promote competition among shipping lines,” he added.
He said the MNSC is also concerned about the development of export performance, whereby Malaysia’s exports of goods and services declined for a third consecutive quarter by 7.1% in the first quarter of this year (fourth quarter of 2019: -3.4%).
Shippers’ activities have been further dampened due shut-out of ports around the world and this is another factor causing a slowdown in imports and exports as the supply chain is affected, he added.
“This issue is further exacerbated as most ports in the world practise a 14-day quarantine for the crew and cargoes for import shipments and thus, this limits the shipping services which inadvertently increases the cost of shipping.
“Based on feedback from shippers, we also note the increase in logistics costs of between 10% and 20%, which will further cripple Malaysia’s export competitiveness during this recovery period,” he said.