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  7th July 2008 - STAR MARITIME
   
 

Westports backs move on container storage

WESTPORTS Malaysia Sdn Bhd supports the decision by the Port Klang Authority (PKA) to postpone the implementation of the three-day free storage period for containers at Port Klang to Jan 1 next year.

The new ruling to reduce free container storage period to three days from the current five days was supposed to take effect last Tuesday (July 1). However, the industry was concerned whether it was ready to clear the goods within the new stipulated timeframe.

The maritime industry that also includes the Customs and other government agencies which are involved in the process of clearing, inspection and approving containerised goods, will have six months to improve their standard operating procedures in meeting with the deadline.

Westports executive chairman Tan Sri G. Gnanalingam said it was a good decision by PKA to give those who are not ready a final chance to improve.

“The reduction of the free storage period for containers at the ports has been postponed several times since 2005 and now, it is good to know that PKA has confirmed it will work closely with the relevant authorities to prepare them for the new ruling,” he told StarBiz.

He said the rationale to reduce the free container storage period to three days was in line with the just-in-time principle thatbecome a standard industry practice currently.

“Shippers and importers that are concerned with inventory cost should not keep or leave boxes for more than three days.

“This policy will benefit the port in terms of space and efficiency in finding boxes in the large container yard,” he said.

He added that the maritime industry in Port Klang had improved by leaps and bounds over the years to eventually reach the targeted three-day free storage period.

“Previously, freight forwarders could not bring cargo over the weekend but the customs now accepts necessary pre-payments based on the estimated time ofarrival and not the actual time of arrival of vessels.

“This gives everybody the opportunity to clear the documents and make payments before the vessel arrives.

“Import and export of goods do not take place within a week and are known to shippers months ahead,” he said.

Gnanalingam said shipping lines were also concerned with the turnaround of both vessel and containers.

“A container, which previously cost about US$1,200, now costs US$3,000.

“Therefore, shipping lines do not want the containers to stay in the port for too long.

“Malaysian shippers are known to hold their boxes at factories for up to 10 to 15 days.

“The shipping lines find that the turnaround of container is much faster in other countries compared to Malaysia,” he said.

He added Singapore had a two-day practice, Yantian Port in China practised less than a day and some European ports only allowed a few hours of free storage period.

On whether the port would gain extra storage fee income from the reduction in free storage period, Gnanalingam stressed that the move was not a profit-making measure.

“If 95% of the cargo leaves the port within three days, then we are dealing only with 5% of cargo owners.

“The delay caused by the minority is usually due to incomplete documents, failure to forward the documents to the relevant authorities or lack of funds,” he said.

   
 

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