Shipping agents in Sri Lanka have warned that shipping lines could stop accepting import and export cargo to and from Sri Lanka as they are failing to remit freight charges due to the ongoing severe foreign currency crises in the island nation.
The local agents told the Shipping and Aviation Minister, Nimal Siripala de Silva, that they have reportedly failed to remit US$70 million in freight costs to the shipping lines during the last several months.
Sri Lanka has been facing an acute forex crisis during the last couple of months with its usable foreign currency reserve going down to less than US$50 million in May. Meeting import bills face immense crisis due to the forex shortage thus prices of essentials gone all-time high now.
The Ceylon Association of Shipping Agents (CASA), led by chairwoman Shehara de Silva, raised the issue during the discussions about key shipping sector concerns with the newly appointed minister.
She cautioned that as the due freight charges are rising, the shipping lines may decide to abandon their services towards Sri Lankan ports. As a solution, she suggested the minister allow the shipping lines to pay the port charges in rupees until October.
Cash strapped Sri Lanka took the decision to collect all payments to the Sri Lanka Ports Authority (SLPA) in US dollars instead of local currency from 1 June, aiming to replenish its forex reserve.
The shipping agents have also pointed out that they can not make all payments in US dollars since they receive several payments from the shippers in rupees.
Meantime, the port authority has waived US$20 million of demurrage for importers who were unable to clear goods in time from ports due to delays in releasing foreign exchange from banks.
The forex crisis led some importers not to get foreign currency for weeks thus their cargoes could not be released from the port premises which caused the imposition of demurrage fee for keeping cargoes additional days at port yards.
In some cases, it was found that demurrage charges have exceeded the value of the cargo in their containers.
“We have approximately waived off US$20 million in demurrage and have been sent for ministry approval,” said ports authority chairman, Prasantha Jayamanna.
Sri Lankan president Gotabaya Rajapaksa in January this year had requested the ports authority to assist the country’s import trade by waiving demurrage charges.