Ceylon Freight and Logistics Association hails Govt. for new Gazette

Ceylon Freight and Logistics Association (CEYFFA) in a statement welcomed the implementation of the Gazette number 2321/62 which has been widely criticised by the export community. Here is the full statement of CEYFFA explaining its stand why the new move is beneficial to all

Ceylon Freight and Logistics Association (CEYFFA) welcomes the untiring efforts made by the President of our country along with appointed officials to restore economic stability. CEYFFA wishes to extend its gratitude and appreciation to the President and Ports, Shipping and Aviation Minister Nimal Siripala de Silva for taking the correct measures to reinstate policies related to our industry by Gazette number 2321/62, as the policies implemented by Gazette number 2041/10 brought in negative impacts to our industry. The new Gazette published under 2321/62 will help the trade including exporters, importers and save considerable dollar leakages out of the country.

As an Association, we have been vigorously working towards the prosperity of our industry and our country and to overcome the negative sentiments expressed by our global partners during attempts to promote the Port of Colombo as a viable hub for the region. We saw the hub status of the Port of Colombo being seriously challenged with the previous regulations.

These regulations published by Gazette 1842/16, 2041/10 were issued without proper consultation or dialogue with the Associations representing the logistics service providers, namely shipping agents, NVOCC agents, consolidators and freight forwarders, who are licensed under the Director General of Merchant Shipping.

After a prolonged battle of nine years, with two appearances in courts, we were able to convince the authorities that the 1972 act of Licensing of Shipping Agents, NVOCC Agents and Freight Forwarders, did not possess provision to issue regulations made under Gazette notifications 2041/10 and 2302/24. Input from all the Associations to the Minister of Ports, Shipping and Aviation, were to the effect that these regulations had a negative impact to our industry and also to our country. Furthermore, the minister was briefed that similar controlling regulations were in place in less than 1% of the countries globally and definitely not in place in hubs or those aspiring to go for hub status.

The Shipping and Logistic industry contributes strongly to the Sri Lankan economy by supporting the trade consisting of exporters, importers, TIEP operators etc. Neither CEYFFA nor any other Association wishes to have or support measures that will negatively impact our industry or the economy. The regulations Gazette 2041/10 overruled the discounted PHC given to MCC operators from the Port of Colombo, which was a major deterrent to attract global business and to promote Sri Lanka as a transhipment hub. As a result, now we have an average occupancy of less than 40% within the Port of Colombo and continues to threaten loss of business and opportunities to regional hub ports, which operate under fair regulations. We fear the demise of a unique product, critically needed for a transhipment hub.

We thank President Ranil Wickremasinghe, the Minister in charge Nimal Siripala de Silva, Secretary Ruwan Chandra and their staff members who carefully studied these regulations and have taken the decision to rescind regulations that brought in negative impacts. As we believe the exporters of Sri Lanka will have no effect of these regulations as Shipping agents, NVOCC Operators, MCC operators would be starting to look at the regulations published recently and have welcomed and intimated us already that they will be now, concentrating with many folds to develop the trade between Sri Lankan Port. As they believe, the Government has ironed out policies with the stakeholders.

The current regulations are in line with the INCO terms published and also in line with most of the international regulations related to trade, Shipping and Logistics. This regulation also will bring in more containers to our country to facilitate the trade which was suffering closer to a decade. The Local chargers from our membership for exporters will remain the same and will carry no effects. The regulation bought in will support more of our exporters as the Freight cost will be worked around the opportunity cost of empty repositioning.

The importers need not now pay the terminal handling charges in US Dollars in Port of Loading months ahead but they may opt to pay it in Colombo in rupees at the time of taking delivery to their containers. This would also bring down the cost of duty of imports and also stop a fair amount of foreign reserves being positioned at various port of Loadings unnecessarily if it’s paid in Colombo. The importers still have options to pay all chargers at POL or at POD.

As a country, we believe the exporters have to be given more prominence and more competitiveness to develop the country’s economy so that they carry out their business at ease. That will also help the local industries to prosper and we believe that it’s time for the Sri Lankan economy to be recognised as an export-oriented economy rather than an import-oriented economy.

We also understand that there have being many claims that there can be unnecessary chargers which may levied with the Gazettes being rescinded which we totally deny the claims as the importers possess rights to choose the Freight Forwarder, Shipping Line, NVOCC Operators, no matter what terms of negotiations are at the port of Loading after careful negotiations. In case, the company does not keep up to that task or the agreement with the service users the Director General Merchant Shipping and the law of the country could be exercised to penalise the relevant establishment as they have breached contract of agreement in such an event. We believe our association also would support unconditionally to serve justice to the relevant establishment.

We also call upon the President Ranil Wickremasinghe to look into those importers who violate the country’s laws by looting containers belonging to carriers, not returning the containers to the designated container yard and those companies that default payments to Shippers. Another area of focus needed is on Companies that do not bring their export revenue back to our country.

The decision to rescind the previous Gazettes was made after several meetings with representatives of all associations being called and after being carefully heard. Also, we want to be clearly intimate when the minister wants an amendment to control chargers. There were more service users than service providers in court requesting to squash the new amendment which was to be incorporated in the Licensing of Shipping Agent Act. We are surprised why the same service users now grumble after the minister complied to the court ruling on which they were anticipating justice for.

We along with all the stakeholders related to the shipping industry welcome the decision of The Minister and our Principles are eagerly looking forward to increasing volumes to Sri Lanka. Hence, we sincerely thank all those involved in bringing these healthy changes, including the President of Sri Lanka and the subject minister for taking this up bravely towards the betterment of our industry.