Export service providers such as shipping companies are currently levying ‘exorbitant' fee in the name of Terminal Handling Charge (THC) on export cargo. This ‘unfair trade practice', exporters said, has forced them to lodge complaints with the Ministries of Commerce and Shipping.
This high fee is ‘illegal' as it is more than three times the official THC, Mr S.P. Agarwal, President, Delhi Exporters Association, told Business Line .
THC is levied from shippers (exporters/importers) by shipping lines for the costs borne by them at the port of shipment or destination to move/handle containers. Mr Agarwal said the exporters had met the Shipping Secretary, Mr K. Mohandas, recently to lodge their complaint and were assured that it would be looked into.
Mr P.N. Suri, President, Northern India Shippers Association (NISA), said exporters also met the Commerce Secretary, Dr Rahul Khullar; the Director-General of Foreign Trade, Mr Anup Pujari; and the Minister of State for Commerce and Industry, Mr Jyotiraditya Scindia, on the issue.
Exporters claim that though the THC levied from them should legally be only around Rs 2,610 per 20-feet container and Rs 5,200 for 40-feet container – official charges at the Jawaharlal Nehru Port Trust – the service providers charge Rs 7,000-15,000 and Rs 12,000-23,000 respectively as THC.
They said these service providers do not provide them a break up of the charges even when asked.
Some of them even term THC as Original Land Freight, which exporters say, has no relevance to THC. Exporters said Inland Haulage Charges are always paid by them, adding that the service providers were misleading them.
BILL OF LADING
Exporters have also complained to the Ministries of Commerce and Shipping that the service providers are ‘wrongly' charging them Rs 900-3500 for providing Bill of Lading.
Explaining the issue, Mr Agarwal said Bill of Lading is just a receipt given by the carrier after accepting the goods for shipment, adding that it is to be provided like a railway receipt or transport receipt. He said even the Bill of Lading Act and Carriage of Goods Act does not mention that charges can be levied for providing the receipt.
“Around 10-15 years ago there were no charges for giving this receipt. Then, till around 5-6 years back, the service providers started charging a ‘nominal' fee of Rs 50-200 for the receipt. But now it has gone to as high as Rs 3,500,” he said.
Mr Suri said there is no rationale for this charge levied by the service providers, adding that there should be some check on this practice.
IMPACT ON EXPORTS
He said the THC and the fee to provide the Bill of Lading now being levied are “very high” and increases transaction cost for exporters, in turn resulting in exports becoming uncompetitive in the global market.
These service providers are nominated by the importers or buying houses abroad, Mr Agarwal said, adding that since they know that exporters would not want to displease their buyers, they resort to ‘exploiting' exporters.
Mr Punit Chaudhry, Executive Secretary, NISA, said service providers such as shipping companies, consolidators and freight forwarders are not regulated by any law.
According to NISA, the Shipping Trade Practices draft Bill should be tabled in Parliament in its original form at the earliest to check malpractices of these service providers. Exporters alleged that the Bill is being diluted and delayed due to lobbying by these service providers.