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Lines to waive demurrage if DO not issued within 24 hours of payment of charges

Lines to waive demurrage if DO not issued within 24 hours of payment of charges
Lines to waive demurrage if DO not issued within 24 hours of payment of charges

Foreign shipping lines calling the Philippines may not charge demurrage if they fail to issue to the consignee a delivery order (DO) within 24 hours of payment of all shipping charges. This was pointed out by Association of International Shipping Lines (AISL) president Patrick Ronas as one of the provisions in Joint Administrative Order (JAO) 20-01.

Ronas told PortCalls in an email that AISL member lines are prepared to follow provisions of JAO 20-01, which adopts processes that expedite the release of refrigerated containers and dry cargoes from the ports during the period of enhanced community quarantine (ECQ).

READ: JAO fast tracks release of cargoes to address port congestion

He explained the issuance of DOs “is automatic” upon payment of shipping charges and provision of relevant documents to the shipping lines. He pointed out this “has always been the process with or without Covid 19 [coronavirus disease].”

Under JAO 20-01, shipping lines are ordered to release DOs within 24 hours of payment of all shipping charges by the consignee. Failing such, shipping lines should waive demurrage charges for each day of delay.

The JAO implements the order of the Inter-agency Task Force (IATF) for the Management of Emerging Infectious Diseases to address disruptions in the supply chain. The IATF order was released after Manila International Container Terminal hit almost 100% utilization in end-March due to slow withdrawal of containers, particularly reefers. The JAO was signed on April 2 by the Department of Trade and Industry, Department of Agriculture, Bureau of Customs, and Philippine Ports Authority.

Ronas said AISL member carriers are ready to contribute ideas to speed up withdrawal of containers from the ports as high yard utilization also affects vessels.

“Schedule integrity is key to any liner shipping service and a delay in berthing leads to exorbitant vessel costs suffered by the lines,” Ronas said.

Meantime, Ronas said shipping lines are compliant with another JAO order to operate from 8 a.m. to 5 p.m., with some carriers even extending operations via a work-from-home arrangement.

“Some offices provided apartments or condominiums to house their staff during the quarantine period. I have confidence in saying that we have been open for business since Day 1 of the lockdown,” he said.

Push for online transactions

Online transactions have been given a much-deserved boost under JAO 20-01. The order directs shipping lines to allow for the electronic processing of shipping documents, including those related to the payment of charges and issuance of DOs.

“The industry was not really prepared for the lockdown. I think no industry was prepared for it but some, if not most, of the carriers were able to adapt the use of electronic media in some of their processes,” Ronas said.

He said there is still some physical transfer for original bills of lading in view of legal requirements.

AISL’s GoFast, an online reservation and appointment system for the return of empty containers, “is working very well and we can see more usage of it not only because of the current situation but [because] it really makes things more efficient.”

“It is time for the industry to take a look again at how to do things online. The terminals have a payment system for years but usage is only 25%. If you want to move cargo faster, users should make full use of such,” Ronas added.

He said the pandemic has “opened up our eyes and one lesson learned is that we now have to look at how to cushion the disruption in the way we do our business.”

“The industry has been slow to take in the use of technology and this will now have to change. The government will likewise have to change otherwise our effort will be useless. In simple terms we have to go paperless moving forward. The tech is there and we all need to embrace it,” Ronas said.

While they comply with the JAO, Ronas said carriers are requesting government to ensure unhampered movement of cargoes as some local government units (LGU) are still blocking passage of trucks delivering cargoes.

“We want their attention focused on making sure that cargo flows smoothly. The communication to LGUs of making sure that cargo flows sans blockages is key as there are still areas where this is not understood,” Ronas said.

He noted that ships “will continue to come as [they carry] vital goods for the country and carriers are committed to provide the service.”

“We need the berth and the terminal space in order for the ship to come back again as scheduled,” he added.

Ronas said the next quarter will be “trying for most of us” as the economic impact of the pandemic “will be felt more.”

“In the meantime, we would ask that all stakeholders do what they can to alleviate the pain. Finger pointing never solves anything but collaboration usually does,” Ronas said. – Roumina Pablo

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