The Pakistan International Container Terminal (PICT) has extended its demurrage-free period from the existing five days to 10 days, to support trade amid the lockdown due to the COVID-19 pandemic.
According to an official notification seen by Davis Index, the demurrage-free period is extended on import containers of vessels that arrived between March 20, 2020 and April 5, 2020.
Container terminals at the ports of Qasim (Qasim international container terminal, QICT) and Karachi (Karachi international container terminal, KICT), in their advisory, informed of the extension of five free storage days in addition to normal free days as per tariffs applicable on vessels that arrived between March 20 and April 5, and deliveries upto April 15. After this period, normal charges would resume.
The Pakistan government has extended its lockdown by another week, till April 14, due to the number COVID-19 cases increasing.
During the national lockdown many importers were unable to lift cargoes amid logistic disruptions and issues related to infrastructure.
Container movement inside the country has come to a halt. With possibility of more congestion at ports, the current container backlog is estimated to be at three weeks.
Pakistan’s Federal Board of Revenue (FBR), in a letter, requested all port authorities to not charge demurrage from importers for a period of 15 days, in addition to the free time allowed by the authorities. It has also requested an extension to the time limit for declaration of goods.
Though ports are operational for inbound shipments, import deliveries have dropped by more than 50pc.
Despite terminals working at maximum capacity for cargo handling, it has been incurring huge costs to sustain operations due to additional safety measures and incentives provided to ensure continuity of the essential supply chain, QICT said in a letter to the Pakistan customs authorities.
As of now, scrap suppliers have not yet received waivers or extensions from shipping lines for detention fees, the daily charges for using a container.
Some suppliers expect the government to advise shipping lines to impose similar measures as adopted by India. In India, the leading recycling association, MRAI, took the initiative, however, in Pakistan, most shipping lines are private and not that flexible, said a trader.
No lockdown for steel mills?
The Pakistan Association of Large Steel Producers, representing the steel industry, has requested the government for steelmakers to resume operations, specifically to meet the demand of the construction sector.
The Pakistan rupee is down almost 40pc against the US dollar in the year, and in the previous budget, 2019, taxes on the steel sector were doubled this has caused concerns.
Thus, to support both, the construction and steel industry, the government should allow steel mills to start production, an industry participant said.