Ports and Shipping Minister’s move to revoke gazette alarms Shippers’ Council

Says it would re-enable service providers to “arbitrarily” impose cost recovery THC and other auxiliary charges on imports and exports Sri Lanka Shippers’ Council is alarmed by the moves to revoke the Gazette No. 2041/10 dated October 17, 2017,which would re-enable the service providers to “arbitrarily” impose cost recovery Terminal Handling Charges (THC) and other auxiliary charges on imports and exports. “The revoking of the Gazette will create a ripple effect which will make Sri Lanka’s exports uncompetitive, which in turn will lead to a further increase in the rate of inflation in the country. The proposed revoking of the Gazette will also result in additional import costs being incurred, which will be passed down to consumers and the public in general. More importantly, it will negatively affect government’s efforts to reduce the cost of living,” the Shippers’ Council warned in a statement issued yesterday. At a recent discussion held by the Minister of Ports and Shipping Nimal Siripala de Silva, the Sri Lanka Shippers’Council was informed that the Gazette No. 2041/10 dated October17, 2017 regarding the Licensing of Shipping Agents, Freight Forwarde r s , Non-Ve s s e l Operating Common Carriers (NOVCCs) and Container Operators (Act No. 10 of 1972), would be revoked.

The Shippers’ Council pointed out that the revoking of the Gazette would endanger free market competition while eliminating international good practices, where price-fixing is not permitted.

The initial Gazette No. 1842/16 dated October27 of 2013 which was further augmented by succeeding governments introducing Gazette No. 2041/10 dated October 17, 2017 strengthening the role of the Director General of Merchant Shipping (DGMS), for the effective implementation of setting only a Delivery Order (DO) fee outside the freight cost and take stringent action against the service providers.

However, Shippers’ Council criticised the Minister’s action to increase the DO fee substantially by moving against the collective decision to increase it based on inflation.

“To the dismay of all importers and exporters of the country, the Ports Minister issued the new Gazette No. 2302/24 of 20 October 2022, introducing a maximum Delivery Order Fee over and above what was proposed by the Council, and which was not in alignment with services performed by service providers.

A new additional charge of US$ 8 per cubic metre, under a broader category of a ‘cost recovery charge’, was also introduced, contravening the cardinal principles and protection guaranteed to Sri Lankan importers and exporters by the aforementioned gazette, adversely impacting economic activity, by driving up costs of all imports and adversely impacting expansion plans of industries,” it elaborated.

Furthermore, the Council alleged that the Minister tabled a supplementary proposal in parliament to amend the Licensing of Shipping Agents Act No. 10 of 1972, to vest in himself the authority to set Delivery Order and other fees, whereas the previous gazette required the service providers to obtain the approval of the DGMS to increase fees, protecting free market forces that decides fees. “Many joint ventures are now reconsidering their business partnerships in the country, which have also accelerated the idea of near-shoring due to supplychain bottlenecks expe r i enc ed dur ing the pandemic,” it added.

Following the concerns raised, the Minister has agreed to withdraw Gazette No. 2302/24 of October 20, 2022