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UPDATES AND ARTICLES
     
  8th December 2008 - STAR MARITIME
 

Shorter free storage period still a worry

Is Port Klang ready for the reduction of free storage period to three days from five days effective Jan 1?

This was the question that sparked a lot of heated discussions among various players involved in the logistics chain at a dialogue and briefing sessions organised by the Federation of Malaysian Manufacturers (FMM) last week.

Since the plan was mooted in 2002 during a National Committee on Business Competitiveness meeting, the deadline has been pushed back several times as the shipping community in Port Klang was not ready for the shorter free storage period at Westports and Northport - the two terminal operators in Port Klang.

Free storage period is the window duration given to importers or exporters to clear or send their goods to and from the ports without any charges. After that period, storage fee will be imposed on a daily basis per container.

While the ports are ready and the Port Klang Authority (PKA) has given the green light to implement the new free storage period, some quarters of the shipping community of Port Klang feel that they are not fully prepared due to the issues related to working hours, online transactions, and document delivery systems.

PKA general manager and chief executive officer Lim Thean Shiang said that as the new free storage period had been gazetted, the authority would go ahead with the plan.

“This is to ensure fast clearance of containers from the ports and maximise space utilisation in ports’ container yards.

“We will arbitrate any dispute between the parties involved in the logistics chain,” he said.

PKA has set up a committee that includes representatives from all the different sectors of the Port Klang shipping community to come up with the standard operating procedures for efficient implementation of the shorter free storage period.

A trial run of the new free storage period has begun on Nov 1.

Lim also told StarBiz that PKA would try to resolve the issue of haulage operators that still needed 48-hour notification for them to pick up containers from the ports and exporters’ premises.

“We must move to a system where the calculation of the free storage period is based on hours, not days,” he said.

A representative of the haulage industry said hauliers still needed 48 hours of advance notification to efficiently operate as opposed to the proposed 24 hours when the new ruling took place.

“Physical movement is very time-sensitive, factoring in the weather, traffic and turnaround of trailers as well as prime movers.

“For us, a 48-hour notification is sufficient to operate efficiently,” he said.

According to FMM logistics committee chairman Radwan Alami, until all parties in the logistics chain are ready and all document delivery systems are improved to paperless transactions, the implementation of the shorter free storage period should be deferred.

“From what I heard today from various presentations made by parties involved in the movement of goods at Port Klang, many are still in the midst of getting ready. The deferment is not to importers’ or exporters’ advantage, but we do not want to be penalised (with storage charges for extra days) due to other parties’ inefficiency,” he told StarBiz.

Furthermore, Radwan said, due to the current economic downturn, manufacturers were cutting down working hours against hauliers’ suggestion that they work seven days a week or 24 hours to collect and send containers at any time.

Selangor Freight Forwarders & Logistics Association president Abel Tan Ah Beng said the trial run for the shorter free storage period was “promising but not convincing” as it was conducted during the trade slump.

“Customs and other government agencies involved in the clearance of goods and duty must also go paperless to ensure the success of the shorter free storage period,” he said.

Tan added that the reduction of the free storage period could be successful if all parties involved delivered as instructed in the standard operating procedures.

   
 

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