Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Material Recycling Association of India (MRAI) moved the Supreme Court seeking implementation of the government order directing shipping lines, Container Freight Stations (CFSs) and ports to waive off detention, demurrage and other freight charges . The case was up for hearing on June 4. With economic and logistical activities hit during the lockdown, importers of scrap – mills/scrapyards/traders,  who the association represents, were unable to evacuate containers of scrap, including that of metals from ports and CFSs. The accumulated charges are set to hurt their pockets.

The shipping ministry had issued a notification on March 31, waiving off these charges for the period between March 22-April 14. Subsequently after the Indian government extended its lockdown till May 3, yet another notification followed extending this waiver. Though, many shipping lines and CFSs were unwilling to implement these notifications.

As per Dhawal Shah, Managing Director of Metco and a member of Bureau of International Recycling (BIR)  and also the vice-president of MRAI in a webinar informed, “India does not have any law or act that regulates shipping lines. Service providers on the logistics side like the shipping lines and the CFSs, have no law telling them the best practices, and parameters they need to follow. Presently, the cost of logistics in India is 14pc to GDP, on a higher side when you compare with around 9-10pc spent by other economies with a good amount of import-export.” 

He further added, when it comes to the metal scrap business, where India is dependent on imports, about 65pc of the import volume is handled by three shipping lines – Maersk, MSC and CMA-CGM – which essentially puts them in a position of power and dominance. “With the lockdown restrictions, every step required for collection of consignments, including processing the relevant documentation, could not be completed,” states Shah. He further states that in the entire two month-long lockdown period, some shipping lines have given partial relief but that is still far away from what is required. The CFSs have completely paid no heed towards notices or advises from the shipping lines. This has created a direct conflict between the trade and the service providers.

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