With the lockdown extended till May 3 in India, the Material Recycling Association of India (MRAI) has sought an extension in waiver of detention and demurrage charges from the shipping ministry.
In a letter sent to the shipping ministry April 14, MRAI has appealed for an updated waiver from shipping lines, ports, Container Freight Stations. The association believes the waiver should be extended for an additional 21 days after the lockdown ends to clear the backlog. MRAI President Sanjay Mehta told Davis Index that association expects a positive response from the ministry soon.
The stipulated period as per the earlier notification issued on March 31 expired on April 14.
MRAI states a majority of scrap material is imported and procured three months in advance. Over 150,000 containers laden with scrap are stuck at various ports of India and average detentions charges per container per day are around Rs10,000. Detention charges between 22 March till May 3 will amount to Rs60,000mn($785.23mn), a burden too heavy for importers.
Truck drivers and labours have returned to their hometowns, rendering loading/ unloading of scrap an unviable option. These unforeseen circumstances could affect the recyclers’ operations.
The Container and Freight Stations Association of India (CFSAI), however, has urged port authorities against granting such extension. A source at CFSAI told Davis Index a blanket waiver would pose cash flow challenges to the association members. Between March 22-April 10; 65,764 were unloaded at ports from ships. Of these, only 8,735 containers were collected in the period. Amid the COVID-19 outbreak, challenges similar to those faced by MRAI were also faced by CFSAI. Members of CFSAI are incurring huge additional expenses towards retaining and mobilising truckers, crane operators and their staff.