Shipping lines profiting from demurrage at ports – GIFF

A co-chairman of the Ghana Institute of Freight Forwarders (GIFF) Monitoring Team, Romeo Frimpong has advocated that it is important for the procedures of shipping lines operating in Ghana to be streamlined. The GIFF executive said this in relation to the longstanding issue of demurrage which he said is a deliberate creation of the shipping lines purely for purpose of making profit. Romeo Frimpong averred that all stakeholders have their part to play when it comes to eradicating demurrage which continues to negatively affect the cost of doing business in Ghana. He revealed that the preliminary paper done through GIFF’s research hub indicated that 25% of causes of demurrage are attributed to the shipping lines. “At the heart of the causes of demurrage is the count of days, weekends and holidays. We are of the view that the weekends and holidays that they do not work must be scrapped. If the laws of the state say we should observe holidays, why do you charge me demurrage on such days. It does not make business sense, so we have advocated that the holiday aspect in the invoice should be scrapped,” he asserted. This perspective he said, is necessary in order to be able to nip the issue in the bud. The Co-chairman of the GIFF Monitoring Team said his outfit has also been impressing upon the Customs Division of the Ghana Revenue Authority, to decouple payment of duties from shipping line release. “Gone are the days we pay duties, print physical copies and take them to the shipping lines and let them expect them to confirm if they have been paid. But now no, just at the click, over the internet, the customs authorities will be notified when I pay. They do not need the shipping lines to verify for them. "If you pay your duty Friday evening, the lines do not work on Saturday so you will not be able to grant release to work on weekends. But if you decouple the duty payment from the shipping line release, you can go to the shipping line make your payments, get your release done, and then anytime you want to pay your duty, you can do so, to have your goods cleared at any of the terminals who work 24/7,” Mr. Frimpong explained. In the same vein, he said the shipping companies should review their position on demurrage which he says the lines have built a business model around. “Demurrage is just meant to incentivize the cargo interest to hurriedly retrieve the cargo and return the container. It should not be a punitive measure but we realize most of these lines are making business models out of this mine. They are capitalizing off the fact that we are bound by time. If you go and they do not release for you, you will be forced to pay.” On the other hand, Romeo Frimpong urged importers to be proactive in their dealings with clearing agents for effective and efficient clearance of goods. He urged them to visit the offices of credible customs house associations like the Ghana Institute of Freight Forwarders (GIFF) when in search of credible agents to clear goods on their behalf.

A co-chairman of the Ghana Institute of Freight Forwarders (GIFF) Monitoring Team, Romeo Frimpong has advocated that it is important for the procedures of shipping lines operating in Ghana to be streamlined. The GIFF executive said this in relation to the longstanding issue of demurrage which he said is a deliberate creation of the shipping lines purely for purpose of making profit. Romeo Frimpong averred that all stakeholders have their part to play when it comes to eradicating demurrage which continues to negatively affect the cost of doing business in Ghana. He revealed that the preliminary paper done through GIFF’s research hub indicated that 25% of causes of demurrage are attributed to the shipping lines. “At the heart of the causes of demurrage is the count of days, weekends and holidays. We are of the view that the weekends and holidays that they do not work must be scrapped. If the laws of the state say we should observe holidays, why do you charge me demurrage on such days. It does not make business sense, so we have advocated that the holiday aspect in the invoice should be scrapped,” he asserted. This perspective he said, is necessary in order to be able to nip the issue in the bud. The Co-chairman of the GIFF Monitoring Team said his outfit has also been impressing upon the Customs Division of the Ghana Revenue Authority, to decouple payment of duties from shipping line release. “Gone are the days we pay duties, print physical copies and take them to the shipping lines and let them expect them to confirm if they have been paid. But now no, just at the click, over the internet, the customs authorities will be notified when I pay. They do not need the shipping lines to verify for them. "If you pay your duty Friday evening, the lines do not work on Saturday so you will not be able to grant release to work on weekends. But if you decouple the duty payment from the shipping line release, you can go to the shipping line make your payments, get your release done, and then anytime you want to pay your duty, you can do so, to have your goods cleared at any of the terminals who work 24/7,” Mr. Frimpong explained. In the same vein, he said the shipping companies should review their position on demurrage which he says the lines have built a business model around. “Demurrage is just meant to incentivize the cargo interest to hurriedly retrieve the cargo and return the container. It should not be a punitive measure but we realize most of these lines are making business models out of this mine. They are capitalizing off the fact that we are bound by time. If you go and they do not release for you, you will be forced to pay.” On the other hand, Romeo Frimpong urged importers to be proactive in their dealings with clearing agents for effective and efficient clearance of goods. He urged them to visit the offices of credible customs house associations like the Ghana Institute of Freight Forwarders (GIFF) when in search of credible agents to clear goods on their behalf.