Exporters furious over Shipping Minister’s proposal to bring back Terminal Handling Charge
Exporters who hailed GSP+ and Govt. say they are now landed with a bombshell on freight
Stakeholders allege secret lobby has confused the Shipping Ministry and Government
Amidst the good news of GSP+ being re-awarded to Sri Lanka through the hard work of the Government, the Ports and Shipping Ministry has proposed an amendment to the famous terminal handling gazette which abolished anti-competitive practices in Sri Lanka way back in 2013.
Cabinet last week approved a proposal by Ports and Shipping Minister Arjuna Ranatunga to amend the 2013 gazette which exporters said was done on the pretext of giving greater benefit to exporters and importers despite the Ministry never consulting them beforehand.
The country’s biggest exporter, the Joint Apparel Association Forum (JAAF), National Chamber of Exporters, Exporters Association of Sri Lanka, Sri Lanka Shippers Council, Import Section of the Ceylon Chamber, Seafood Exporters, tea industry and Free Trade Zone Manufacturers Association, Spices and Allied Products Association, Pettah Importers, Fibre Exporters, Exporters Association of Sri Lanka, Boat Manufacturers and Fruit and Vegetable Manufacturers among others have expressed shock that some industry-related shipping representatives would have lobbied for this with the Minister of Ports and Shipping.
Industry sources said that some of the shipping lines and agencies were very unhappy as they had lost millions of dollars when the Government authorities in 2013 stopped collecting anti-competitive charges and brought in a transparent mechanism.
“The Government has been completely misled as per the Cabinet note,” an exporter charged.
The Cabinet paper approved last week says the law has prohibited the collection of THC. Actually, what the law has only done is make the contracting party of the freight pay the shipping line at origin or destination including THC.
This brought market forces into play and today when buyers negotiate freight they pay all these charges as part of the all-inclusive freight rates. Similarly, Sri Lankan exporters who negotiate freight pay all these charges to the line or the agent as per quoted in the all-inclusive rate.
If the Government allows the freight to be broken and collected locally as separate components, on one hand the Government has intervened to force local parties to pay what the buyers have to pay. This would not help our exporters or the importers as freight will be once again be artificially inflated. The whole export and import community requests the intervention of the President, Prime Minister, Finance Minister, International Trade Minister and the Ports and Shipping Minister to re-visit this Cabinet approval made on 9 May 2017.
Further, exports and importers questioned how a gazette that was issued by an Executive President, not a Minister, could be amended by a line minister. One exporter said that when this gazette was published the then President could have signed it as a Minister of Ports and Shipping as he was holding that portfolio, but instead he decided that in the national interest it should be signed as President so that it could not be easily overruled.
Others said that interested parties have shown a tax benefit by breaking down the freight, whereas in effect it may not be the case. The industry will protest the move with the Ports and Shipping Minister and the Government. (Daily FT)