Asian shipowners urge Sri Lanka to reconsider action on surcharges
Monday, 23 December 2013 02:00
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Says proposed THC ban would isolate Sri Lanka from the international community
The Asian Shipowners’ Forum (ASF), the representative of the 15 shipowners’ associations in Asia, announced that it will shortly file its comments urging the Sri Lanka Government not to ban collection of surcharges, including the terminal handling charges (THC).
According to ASF, the ban, proposed in a November 21 budget speech, could isolate Sri Lanka from the international community and drive shipping business away from the country’s ports.
ASF Secretary General Yuichi Sonoda states, “This ban would disrupt numerous private contractual relationships both for transportation services and the sale of goods. The ban would be an unprecedented interference with private commercial transactions. The parties to the transaction, not the Government, should determine how freight charges should be structured.”
THCs and other surcharges are assessed in virtually all major trade lanes in the world, including the Asian region.
By mandating how business partners structure their financial arrangements, Sri Lanka would be isolating itself from major commercial centres that attract business by protecting freedom of contract.
“In Sri Lanka’s case,” Sonoda stated, “this is the wrong time to contemplate such an action. Carriers are major customers of Colombo and other Sri Lankan ports. Sri Lanka is expanding its terminal facilities in an effort to become a major shipping and logistics hub in South Asia. It is also trying to boost exports. This action would have the opposite effect – it would make Sri Lanka a very unattractive place to do business, and drive away potential port users. Port competitiveness will suffer, ultimately impacting the local economy and jobs.”
Proposed ban based largely on erroneous information
ASF urges Sri Lanka not to take action without considering all points of view. The proposed ban is based largely on erroneous information provided to the government. For example, most of the 42 different surcharges listed in opponents’ complaints are duplicative or are not even charged by carriers.
Recent complaints that the THC level is excessive are also unfounded. Current prevailing THC rates were agreed to between carriers and exporters in 2008 in response to an order of the Sri Lanka Supreme Court. The proposed ban would replace a cooperative, court-ordered solution with a one-sided mandatory structure for shipping charges. And while local carriers have documented that the THC is tied to fees imposed by the Sri Lanka Ports Authority and other terminals, proponents of the ban have presented no data to support their complaints.
The members of the ASF urge Sri Lanka to seek a fair and fact-based approach to this issue. Sonoda concluded, “The process established by the Sri Lanka Supreme Court in 2007 showed that carriers and exporters can work together to avoid unreasonable or unfair charges. Cooperative solutions work much better than government mandates.”
The Asian Shipowners’ Forum (ASF) represents 15 shipowners’ associations of Australia, China, Chinese Taipei, Hong Kong, India, Japan, Korea and the Federation of ASEAN Shipowners’ Associations comprising Brunei, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. ASF’s role is to promote the interests of the Asian shipping industry and promote policies that lead to efficient and effective ocean transportation service in the world.
