MUMBAI: Thousands of Imports containers arrive every day in seaports and unless promptly evacuated  by Importers or  Container Freight Stations (CFSs), the ports will choke.

The current National crisis arising out of outbreak of Pandemic COVID 19, with early and prompt  regular MHA advisories to States and UTs and further facilitated by the authorities ensured that  the  basic  and minimum essential export-import goods like Pulses, Fruits, edible oil, Pharma products, chemicals and scores of other related imported goods movement  did not come to a grinding halt even for a single day.

Sensing the urgency, most of the Authorities across India got into action & pushed CFSs to perform in this hour of need despite scores of challenges and hurdles.

Few of the hurdles were resolved with the interventions of MHA (Ministry of Home Affair) advisories explicitly covering Ports, Transporters, CFSs/ICDs Custom House Agents as part of  “essential services” and were in the exemption list during the lockdown. The advisory exempted all export-import movements of goods whether essential or non-essential across the country. The authorities like Ports, Customs, Police, District Collector  offered facilitation and assistance including issuances of  curfew passes etc.

However during this period of COVID 19 pandemic the challenges for Ports, CFSs & ICDs were almost similar to those of any other essential service providers. In such a situation, to muster even bare essential staff i.e. drivers, surveyors, labour and reach stacker, RTG operators was like a mammoth task, said one industry source. However these were managed by paying additional & incentivising that lead to burgeoning cost. Another source said, “with owned equipment’s operating at less than 30% due to driver, operator & labour shortages, the CFSs went to hire other than paying higher price, provided food & stay to ensure the operations were kept on.”

Despite these extraordinary  efforts by the Ports, CFS & ICD terminals & high degree of push by the Government, very few importers came forward to take deliveries during of lockdown  leading to all CFSs getting full. 

In the meanwhile, the Government kept pushing the CFSs to offer free days, for which the CFSs came forward and waived charges for the first few days in the anticipation that the importers will come forward & evacuate.

Despite these offers very few Importers came forward to evacuate. While others under the guise of difficulties went on pressing for demurrage or ground rent waivers from the custodians.  On one hand for custodians like CFSs the costs are mounting up exponentially to service the trade and they are saddled with request for waivers. The moot question arises now is, when  20 to 25 % of the  importers with full facilitation for  export-import movement across the country  can clear their  imported  containers,  why not  the others ?

In actuality the  advisories from various authorities are  turning out to be counterproductive. CFSs  are being pressurized to offer waivers despite huge increase in costs are in a dilemma. 

Following facts have to be borne in mind according to experts in the industry :

• CFSs are full to the brim and  further movement is hampered. Evacuations from terminals will stop and Port ground rent will be passed on to CFSs by the Lines. Many terminals have not offered any  waiver

• Most of  the Importers work with CFSs  on  bilateral contracts enjoy  huge discounts on  the printed  tariff.  This is market driven as CFS capacity across India exceeds the demand

• Majority of the trade already enjoys substantial  number of free days from CFSs in line with what Shipping Lines offer.

• CFSs  being high capex infra projects have invested hundreds of crores in infrastructure development and  many of them continue to service the debt incurred. They have huge operating and fixed costs.

• CFSs  are  labour oriented industry and each facility engages 100 to 200 (or even more) direct and indirect labour. They have to be paid irrespective of quantum of work. Pan India, CFSs would be engaging collectively over 1.5 Lac workers. If CFSs have to forego their legitimate dues by ranting forcible waivers, they will be compelled to think of retrenchment of labour in in large numbers

• During COVID 19, all personnel coming to the CFS during the lockdown period are induced with additional wages and welfare including meals and pick up and drop services, to reduce exposure of staff to the pandemic.

• CFSs consistently evacuate the volumes from the terminals even at higher costs of Handling and transportation charges with special emphasis on driver’s welfare at this point so as to to ensure that nothing impedes the Customs activities.

• CFSs have ensured that all the facilities are up and running and are available for deliveries to importers and their agents.

• CFSs continue to absorb volumes from the terminals even though the current levels of inventory have increased the shifting of the containers by 3 to 4 times compared to normal periods. This cost needs recovery as the CFS was ready to deliver containers, but delivery was not taken.

• CFSs ramped up the protocol for health screening to ensure no compromise to health of all personnel visiting the CFSs. This includes truckers, clerks and all parties permitted access. This has a cost component that is nowhere incorporated in the pricing and is being done purely for welfare.

Most of the CFSs despite above additional costs being saddled on them due to importers / CHAs, have already  given 10 days waiver on ground rent waiver and when the Importers come for delivery, on  case to case basis and bilaterally, some additional concessions are still being given by them. Majority of the Importers are being facilitated by CFSs, however one segment of Importers who are making no efforts to take deliveries but are approaching authorities for blanket waivers. The industry experts feels that any blanket waiver, if under consideration will encourage them not to come forward.

They will choke the CFSs and then Ports’ and bring the trade probably to standstill. This will erode all the efforts taken by authorities to keep the Global supply chain going.

The benefit of the mutually agreed final waiver between CFS and Importer  for late  clearance by Importers should go directly to the Importer through a credit note from the  CFS to Importers account directly, felt one of the industry veteran.

“Having known the above fact that the Ports, CFS & ICD terminals have stood shoulder to shoulder with the Government in ensuring evacuation & to keep the ports functional, surprisingly some authorities are blaming & threating to penalise if waivers are not provided to the importers,” said the above veteran. Hazira port is the first one to stop, more will follow if corrective steps & actions are not taken, he felt.