ANMA seeks waiver of demurrage and detention charges from Shipping Ministry

The All India Non-Ferrous Metal Exim Association (ANMA) has written to the Shipping Ministry seeking waiver of detention and ground rent on all containers parked at various ports of the country. The waiver has been sought for a period of 21 days from the date of completion of the lockdown period or the date of arrival of the container, whichever is latest up to June 30, 2020.

This waiver from ANMA has been sought over and above the contracted fee days in all containers.

On containers arriving before May 3, ANMA has sought a waiver till May 24 in addition to the contracted free days. On containers arriving post May 3, ANMA has sought a waiver for 21 days in addition to the contracted free days up to June 30, 2020.

The main reason cited by ANMA for seeking the relaxation is heavy financial crunch faced due to lockdown of most of the auto sector clients. Auto sector has been one of the most important clients for non-ferrous metal and because many auto companies have deferred payments to their vendors, there’s a serious liquidity crunch in the system.

Just like the auto sector, some steel companies have also delayed the payment to their suppliers which is adding to the liquidity woes.

ANMA expects the liquidity crunch to worsen post the lockdown period as it sees a slowdown in demand from the auto and steel sectors which will only leave huge inventories on their end.

In a situation of this liquidity crunch, ANMA feels it will become very difficult for traders to pay the exorbitant detention charges and demurrage levied by shipping lines and ports/CFS/ICD.

According to ANMA, the detention charges levied by shipping lines after some normal days on a 20 feet container is around $50-70 per day and for a 40 feet container is $100-140 per day. As of now around 1,50,000 containers are lying at various CFS/ ICD/ Ports on which the detention charges and demurrage amount is going to be Rs 6,000 crore.