The Directorate General of Shipping (DG Shipping) has asked port operators not to impose extra levy on exporters whose containers did not conform to the declared weight as required by a new regulation.
The action comes after two private terminal operators at Jawaharlal Nehru Port Trust (JNPT) were found to be levying a variance charge on shippers (exporters).
“Ports are only service providers. They can’t impose penalty. They were taking advantage of the situation and we had to complain to the DG Shipping,” said Captain Vivek Singh Anand, President, MANSA. Even the Container Shipping Lines Association had moved the shipping regulator.
As per regulation of the International Maritime Organisation (IMO) and notification by the DG Shipping, Ministry of Shipping concerning the Verified Gross Mass (VGM) of containers, it has been made mandatory from July 1, 2016 for all shippers to declare the weight of the containerised consignment.
This is to ensure that containers are not overloaded and to prevent accidents while loading, unloading and during transit on sea and road routes. Earlier, in the absence of any such rule, exporters used to overload containers resulting in fatal accidents, including sinking of ships.
As the new rule kicked in, two private terminals by APM Terminal and DP World started weighing all containers and even levied extra charges on containers which were found to be overloaded or underweight than the declared number.
Since this weighment caused widespread resentment among the exporters and shipping lines, the DG Shipping stepped in to clarify its notification which was allegedly misinterpreted by the private terminal operators to levy the extra fee.
Even the Container Shipping Lines Association had moved the shipping regulator.
“Concerns have been raised regarding additional financial burden being imposed despite the VGM certificate being submitted by shippers. All concerns have been raised regarding the additional charges being levied by the terminals for variances in the VGM declaration even though the weight of the container remains within the permissible limits as per the markings on the CSC plate,” DG Shipping said in a circular. It said neither the amendments to the SOLAS (Safety Of Life At Sea) Convention nor the Ministry of Shipping notice envisage the requirement for ports/terminals to weigh containers to verify the gross mass of the container.
“It is further clarified that the said Ministry of Shipping notice, at no stage, encourages the weighment of containers and the imposition of additional process by ports/terminals, thereby constraining trade movements. This Directorate therefore does not support such measures. The Directorate is of the view that the amendments to the SOLAS Convention pertaining to safety suspects should not be used by intermediaries between the shipper and the ship to impose additional burden on the exporter of cargo from India, thereby hindering the export trade of India,” it said.
According to ship agents, the terminal operators have not responded to the directive. “They are still charging and have not taken note of the directive,” said Mr. Anand. “We have told them that the trade will not pay any such illegal levy,” he said.
According to the Mumbai And Nhava-sheva Ship-Agents Association (MANSA), the terminal operated by APM Terminals has been charging weight variance levy of Rs.2,075 for a 20-foot container and Rs.3,114 for a 40-foot container causing financial burden on shippers.