Shippers paid US$24 million surcharges in 2022 – GSA

Shippers paid US$24 million surcharges in 2022 – GSA

The Ghana Shippers Authority (GSA) has revealed that in 2022, shippers importing cargo to the country paid an estimated amount of USD$24 million to shipping lines in demurrage.

Mr Charles Asiedu Sey, the Tema Branch Manager of the GSA, disclosed this at a day’s seminar on demurrage, organised by the Authority for Shippers.

Mr Sey indicated that the figure showed an increase over the US$19 million paid in demurrage in 2021.

He, however, said that before the increase in 2021, the amount paid saw a decline from US$76 million in 2017 to US$27 million in 2019, and a further decline to US$19 million in 2021.

He attributed the increase in demurrage paid in 2021 and 2022 to the exchange rate differentials between the Ghanaian cedi and the US dollar in the third and fourth quarters of 2022, which he noted resulted in significant increases in import duties and taxes at the ports.

He said demurrage and rents were avoidable, adding that the GSA had resolved to bring the amount down by conducting such sensitization programmes for shippers to avoid delays in clearance and attracting extra charges for keeping the containers beyond the free days.

Mr Kwesi Saforo, a Senior Research and Monitoring Officer at the GSA, in a presentation on the effect of demurrage on the cost of doing business at the port, defined demurrage as the fee charged when an import container was still under the control of the shipping line (carrier) in the port, terminal, or depot and not unstuffed by the consignee beyond the free time allotted.

Mr Saforo explained that container demurrage was applied once the free time had expired, adding that the rates vary depending on the shipping lines, indicating that in Ghana, the law gave the first seven days as free days for clearance.

He said the next seven days after the free days attract a minimum of US$20.00 to a maximum of US$30.00 per day as demurrage charges, while between 15 and 21 days of the container staying at the port attract between US$30.00 and US$45.00, and other days after that would also lead to the payment of demurrage charges between US$45.00 and US$55.00.

He disclosed that 60 percent, 59 percent, 33 percent, 40 percent, and 45 percent of Ghana’s containerised cargoes went on demurrage, respectively, in 2017, 2018, 2019, 2021, and 2022.

He noted that some factors contributing to demurrage included delays in the receipt of cargo documentation, a lack of prior information on vessel arrivals, a lack of funds to clear cargo, inaccurate declaration information, non-compliance with regulatory requirements, and deliberate delay due to some ulterior motives on the part of shippers.

Mr Saforo noted that from the side of the service providers, issues such as bureaucratic shipping lines, operational procedures or standards, unprofessional conduct of clearing agents, and difficulty in finding containers at terminals could also lead to demurrage payments.

According to him, system issues, including downtimes, teething problems with the Integrated Customs Management System (ICUMS), and poor feedback systems, coupled with bureaucratic appeals processes, all lead to delays in the clearance of containerised cargo.

He stated that shippers must do their best to avoid demurrage, as it could dwindle their profits and working capital, lead to higher product costs on the market, affect the volume of imports, increase the cost of living in the country, and affect the competitiveness of Ghana’s ports, as well as put a foreign exchange drain on the economy.

Mr Romeo Frimpong, an Executive Member of the Ghana Institute of Freight Forwarders (GIFF), and Mr. Dan Aryee, the Commercial Manager of Grimaldi Ghana Limited, provided insight into demurrage from the perspectives of freight forwarders and ship agents, respectively.

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