Friday, January 1, 2010

Port Klang Authority to reduce free storage period for FCL containers

Port Klang Authority (PKA) said it would implement the decision to reduce the free storage period for full container load containers from five days to three days effective today.

The decision was taken after several deferments since August 2007 following objections from industry players, PKA said in a statement.

However, Selangor Freight Forwarders and Logistics Association acting president Alvin Chua Seng Wah told a press conference in Kuala Lumpur yesterday that Port Klang would never be ready for the reduction of free storage period to three days without an effective monitoring system in place.

He said the association wondered how PKA would monitor during the three-month pilot run of the new system and determine the accountability of each party.

“The pilot run would be meaningless if it is not done in a holistic and objective manner.

“This seems like putting the cart before the horse and we are concerned that the monitoring system which PKA purportedly has may not be able to monitor effectively on the pilot run,” he said.

Chua said the freight forwarders and importers were the only parties in the entire delivery chain to deal with all the parties in the chain, from importers right up to the container hauliers.

“There must be guidelines in black and white that can access every part of the delivery process and ensure everyone is accountable to the key performance indicator (KPI),” he said.

“Any party who fails to fulfil the committed KPI and cause the cargo to be delivered beyond the 3-day free period must bear the consequential charges, not just us,” he said.

Chua added that 80% of the containers in Port Klang could be cleared within three days, but the remaining 20%, or 10,000 containers, could not be done within the short period.

It involved between RM1mil and RM2mil of extra cost every month, which would be passed down to the consumers eventually, he said.

Chua also said the players should also be given 30 days’ notice prior to the start of the pilot run, not two days before.

Bernama reported that PKA said it had taken into consideration some of the concerns raised by the port users and directed both terminals, Northport and Westports, to take several actions in order to facilitate the port users.

Among them are to calculate free storage period based on hours instead of days and to waive the storage charges if delays are caused by customs, other government agencies, or the terminal itself.

PKA has also directed terminals to maintain five-day free storage period for shipments from the ports in Asean countries.

This facility would be extended until Dec 31, 2010, by which time importers should make all necessary arrangements with their counterparts at the load ports to comply with the revised free storage period, it said.

In another development, Chua said the forwarding agents and importers would not accept demand by shipping lines or their agents for letter of indemnity (LOI).

He said the LOI initially only covered detention and demurrage charges, but had been extended to cover washing or cleaning, container repair, monitoring and electricity, loss and other related charges recently.

“It practically covers everything. Forwarding agents are not a direct contracting party with shipping lines; hence we should not be required to provide LOI.

“Also, there should be a standard format clearly spelling out the indemnity for storage, detention and demurrage charges,” he added.

Source: StarBiz

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