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Myanmar’s new cargo policy draws international criticism

Myanmar’s new cargo policy draws international criticism

The International Chamber of Shipping (ICS) has urged Myanmar’s government to reassess the negative impact the recently implemented changes to the country’s national cargo collection and release policy are having on the shipping industry and the supply chain.

In a letter to Myanmar’s Minister for Transport Thant Sin Maung, the ICS expressed concerns that the new amendments to the policy contravened “the spirit of customary international practices” and might cause considerable market distortion.

In the letter, the ICS also called for the government to conduct a “thorough” public consultation on the new policy to take into account the view of all interested industry stakeholders.

The amendments to Myanmar’s cargo policy, which were implemented in October this year, included the need for shipping lines to use a uniform tariff when collecting surcharges (detention charges) from consignees who do not return their containers in time, as well as to collect these charges at container depots/terminals instead of the line’s or shipping agent’s office to assist consignees.

However, the ICS argued that the use of uniform surcharges and tariffs would put ships calling at ports in the country at a significant disadvantage to those calling elsewhere, which can independently stipulate these fees, leading to “considerable market distortion”.

The ICS also called for the government to revert to the process permitting shipping agents to collect detention charges on behalf of shipping lines, claiming that carriers are concerned that the new rules would lead to confusion regarding responsibilities for the calculation and collection of the rate/amount of detention charges as in most cases no personnel is available at the allocated depots.

Other amendments included for cargo to be released upon presentation of the Bill of Lading (B/L) directly to the Shipping Agency Department (SAD) without consent from carriers and before the settlement of ocean freight and charges between the consignee and shipping lines.

According to the ICS, the new procedures for cargo release, which will be managed solely by SAD, puts carriers in a vulnerable position because of the risk of incorrect cargo release and of failure to collect ocean freight and charges from customers, and makes the process susceptible to fraud.

The amendments also require the local surcharges, excluding detention charges, that can be collected by shipping lines to be determined by the Myanmar government instead of individual carriers, as it is in line with customary international practices, with collection of local surcharges now restricted by the Myanmar Port Authority (MPA).

Additionally, according to the amendments, the government decides the depot/terminal location where customers must return empty containers to, and shipping lines cannot charge Delivery Order (D/O) fees, which are levied all over the world.

The ICS claimed that by instructing all depots/terminals to stop following the normal procedure requiring verification of payment of detention charges before accepting empty containers into the facilities leads to a high risk of customers using containers to store their cargo without returning them and of container lines not being able to collect detention charges.

The ICS added that liners reportedly had issues in liaising with SAD in regard to the return of empty containers at they claimed it does not follow their instructions.

The organisation stated: “As a result there are reports of a significant overflow of containers in some depots. Equally concerning are reports that the cost of moving containers to the correct locations will also sit with the shipping line.”