Govt Agrees to Exempt Demurrage Costs for Importers

The government has decided to withdraw demurrage charges for stranded containers at ports and to reduce terminal detention fees for importers.

Federal Minister for Maritime Affairs Faisal Sabzwari announced the demurrage exemption yesterday after importers repeatedly complained about the non-clearance of cargoes at the country’s ports.

“Due to the difficulties confronted by traders in recent weeks as a result of stuck-up containers at ports, the Ministry of Maritime Affairs has decided to waive demurrage charges received at Ports and to significantly reduce fines imposed by terminals,” he tweeted.

“The economy can be returned to normal by providing assistance to the business community,” he said, adding that ministry officials will later consult with the business community representatives for devising additional measures in this regard.

While many applauded the minister’s initiative on Twitter, traders, in particular, complained that it would not solve their problems because most of their imported cargo was stuck at private terminals, and it was unclear how the government would deal with this issue.

From what we have learned so far, importers are still concerned (and very angry) about the stalled containers since banks are refusing to settle letters of credit (LCs) due to the dollar shortage after the government decided to settle import payments only for essential items such as petroleum products, edible oil, and so on.

But Faisal Sabzwari’s announcement could be key for the government to exercise further relaxations, and in the context of traders’ concerns, make things better in the near term.

So far, business leaders have put a lot of emphasis on the issue of thousands of containers stranded at port terminals and sought urgent facilitation from the government in this regard.

While the government starts work on clearing LCs and giving incentives on demurrages, it should also be prepared to withstand (with dignity) anything thrown in its way.

It can be recalled that when the Governor of the State Bank of Pakistan (SBP) visited a town hall meeting of business leaders on Wednesday, traders made him regret it. They insulted him with sarcastic remarks and gifted him a ‘special key’ which made the governor shudder with embarrassment.

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  • It’s a joke why was this situation caused, now Government will pay these charges from public money, who is at loss , this was the planning wow

  • Is the Demurrage cost paid to the govt. or to the exporter of the sending country? If it is paid to exporter than has the exporter agreed to forgo these charges? Or will the govt. pay on behalf of the importers in Pakistan? If govt. will pay then what good is this step, the dollar will leave the country nonetheless and for what reason? Why don’t they simply pay the import amount instead of keep on paying fines?

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