Emphasis of Iqbal Mirza on the issue (Business Recorder 11 May) is (a) bill of lading is title to goods (b) all charges by ship agents, freight forwarders and terminal operators should be part of freight (c) Federation of Pakistan Chambers of Commerce and Industry (FPCCI), proposed that TSC be paid by the shippers/consignees.
I highly appreciate it but, afraid, "charges of terminal operators should be part of freight and the FPCCI's proposal that these should be paid by shippers/consignees" are not in agreement.
Basic of carriage of goods is that the shipping company contracts to carry and deliver the goods at specified place in consideration of freight. The Hague Rules, under which the bills of lading are issued, defined: "freight" includes all charges payable to the carrier in accordance with the applicable tariff and the bill of lading. Therefore, shipping companies/agents are contractually bound to issue delivery order/deliver the goods in exchange of the bill of lading - title to the goods.
Even if a bill of lading specifies charges, these are not payable by the shippers/consignees in view of the definition of freight. More so, after discharge of the goods, terminal operators handle, for and on behalf of shipping companies, till delivery to consignee.
Part A of the Schedule of Charges under Implementation Agreement/KPT Act, specified services and required, shipping lines/carriers to pay, terminal handling charges to terminal operators at the prescribed rates for freight pre-paid mode bill of lading. Part B specified services and prescribed rates shippers/consignees to pay to terminal operators for "freight to pay" mode.
Rule 419(iii) of SRO 450(1)/2001 under Customs Act, 1969 calls that shipping companies shall issue delivery orders in exchange of the bill of ladings and terminal operators shall only honour the delivery orders as are issued by shipping companies, leaving no ambiguity that no charges are payable to shipping company/agents, terminal operators because freight includes all till delivery. I have reasons to believe that the FPCCI is not ignorant that charges of terminal operators are included in freight.
Freight forwarders contract to carry and deliver the break-bulk cargo at CFS (Container Freight Station) in consideration of freight. There is no justification of recovery of host of charges for delivery of the goods. Their collection is erratic, at will and amounts to ransom for releasing the cargo from captivity.
Charges recovered per year are Rs 17 billion by shipping companies/agents, incalculable by freight forwarders, and US $180 million by terminal operators, besides host of hidden charges not calculable. How tragic and unfortunate that the government is oblivious of the loot, plunder and swindle of this magnitude and its drainage out of the country. It adds to cost of import and export, squeeze poor end-users and makes export cost prohibitive.
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