Graphic Business News

Shippers lose US$76m to demurrage

By: Maclean Kwofi
Ms Benonita Bismark
Ms Benonita Bismark

The total amount of demurrage paid by shippers on imported containerised cargo to shipping lines for undue grounding and detention of containers after the mandatory free period dropped by 19.6 per cent to US$76 million in 2017.

The development was in spite of GH¢48.1 million paid to the Ghana Ports and Harbours Authority (GPHA) as rent for last year because of the inability of shippers to clear their goods from the ports after the allowable seven day free period.

Last year’s rent represented a 12.2 per cent rise over the GH¢42.9 million recorded in 2016, the Chief Executive Officer of the Ghana Shippers’ Authority (GSA), Ms Benonita Bismark disclosed at the Shipping Quarter and Outlook on March 28 in Accra.

She said it had been the priority of the GSA to reduce the total amount of demurrage and rent payments through shipper education and sensitisation.

According to her, shippers are, therefore, being sensitised to the need to avoid demurrage and rent because it is gratifying to note that demurrage payments at the two seaports went down from US$95 million in 2016 to US$76miion in 2017.

She said unfortunately, rent payment at the ports increased from GH¢42.9 million in 2016 to GH¢48.1 million in 2017, hence the need for increased shipper education and sensitisation in this area.

“Demurrage and rent are avoidable payments at the ports. If shippers are able to clear their cargo generally within the first seven days free period, they do not have to pay demurrage or rent charges. Unfortunately, a number of shippers enter demurrage and rent periods due to several reasons.”

Major causes of container demurrage
Last year, for example, shippers paid close to US$100 million as container demurrage to shipping lines operating at various ports in the country.

A situation, shippers explained contributed to the high cost of imported goods, congestion at the port, excessive loss of revenue, inefficiencies at the port and others.

Also frequent system breakdown, delays from service providers, bureaucratic operational procedures and unreliable clearing agents are some but major causes of the container demurrage at the ports.

Statistics indicate that over 80 per cent of consignees are unable to clear their cargos at the port within the seven days allowable time resulting in container demurrage.

Trade facilitation
Ms Bismark emphasised that the country had over the years been implementing trade facilitation measures intended to reduce the cost of doing business at the ports as well as improve government’s revenue.

“One of such measures was the effort at securing a single window platform for customs clearance of goods at the ports,” she indicated.

This process, she said received a boost with the introduction of the Ghana National Single Window project in 2015.

However, she noted that the customs clearance process was revolutionised when the paperless clearance system was introduced in September last year.

“A large portion of the clearance process went electronic and this was intended to reduce clearance time and secure the government revenue,” she said.

She mentioned that apart from a few hitches, the paperless system had been largely successful and embraced by key stakeholders including shippers as the away to go.

“A review committee has been established to appraise the paperless system and to make recommendation to ensure that it delivers full benefits to all stakeholders.

We believe that continuous improvements in the systems operations and its monitoring, in addition to continuous dialogue and sensitization of shippers across the country, which the GSA is undertaking will ensure total success for the project,” she added. – GB