Monday June 2, 2008

Forwarders worry over free storage period

Stories by SHARIDAN M. ALI

SELANGOR Freight Forwarders and Logistics Association (SFFLA) is concerned over the industry's readiness for the reduction in free storage period for containers at Port Klang.

The free storage period for import and export containers, currently five and seven days respectively, is scheduled to be shortened to three days by July 1.

Last year, the implementation of the Government-approved gazette was postponed from Jan 1, 2008 to July 1 by both Westports (M) Sdn Bhd and Northport (M) Bhd.

Under the new instruction, port operators will have to start imposing storage fee for the space rendered from the fourth day onwards. Shipping lines will also charge demurrage fees for the containers used by importers.

SFFLA president Tan Ah Beng said the reduction in the free storage period should be postponed further until all parties in the logistics chain changed their standard operating procedures to accommodate the new rules.

“If not, exporters, importers, forwarders and ultimately, consumers, will have to bear the brunt of absorbing the storage and demurrage fees.

“Why should they be penalised following any delays made by other parties along the supply chain due to the shorter storage time? I don't understand why the new rules have to be implemented so urgently as both ports are not congested,” he told a press conference recently.

Tan said only ports and shipping lines would benefit from this new ruling.

“Based on the average of 3.5 million import and export containers handled at Port Klang annually, and the increased storage fee that will be collected as a result of the new rules, both ports are expected to gain extra income of about RM35mil each,” he said.

As far as freight forwarders as concerned, Tan said, they were prepared for the shorter storage period but the concerns were raised because some players in the supply chain were not ready.

“This is based on the input from our members that deal with almost all players along the supply chain,” he said.

According to Tan, shipping agencies, Customs and other related Government agencies are seen as not being ready for the implementation of the three-day free storage period.

In a statement, SFFLA said shipping agents sometimes failed to submit inward manifests to the Customs or Free Zone Authority within the stipulated time due to early vessel arrival, especially those from the Asean region.

“Hauliers also require a 48-hour notice to ensure that containers will be delivered and taken within the free storage period. Dutiable goods that need Customs' release and goods that require inspections by other Government agencies also take time to complete the process,” it said.

Tan said this was due to the mainly manual processes still being practised in Port Klang.

“Different parties in the supply chain use diverse systems that do not interact online or automatically with each other.

“The new rules should be postponed until the proposed National Single Window, that will connect all players under one system, is introduced; a thorough study is done on the matter; and all related players in Port Klang improve the operating procedures,” he said.

He added that the association also regretted the fact that the Port Klang Authority had advised the Transport Ministry to approve this change without having conducted an in-depth consultation with the industry.

The Star.