Pakistani ports are extending port storage grace periods for ferrous and nonferrous containerized scrap shipments, as container backlogs stretch to nearly three weeks amid an extension of a nationwide lockdown to slow the spread of the coronavirus outbreak.
Both Port Qasim and Karachi have extended the demurrage free period by five days for vessels that arrived between 20 March through 5 April and on deliveries to 15 April in order to further support the trade due to lockdown and logistics challenges.
The Pakistan government implemented strict containment measures on 22 March, similar to India’s 21-day lockdown with the government extending the lockdown last week now to 14 April amid mounting cases.
Under the lockdown, ports throughout the country have been deemed essential businesses and as such have remained open, though the closure of related necessary critical infrastructure has brought container scrap movement throughout the country to a halt.
Market participants familiar with the matter estimated that the current backlog of containers at the ports in Pakistan is around three weeks, with the possibility of further congestion because of the lockdown.
“They have kept the ports open but they’ve closed everything else that is essential. Shipments are coming in but containers are just sitting at the port,” one freight-forwarder said.
“Currently the terminal is working at its maximum capability in cargo handling operations. [The] terminal is incurring huge costs in order to sustain its operations due to additional safety measures and incentives provided to ensure the continuity of essential supply chain,” Qasim International container Terminal Pakistan said in a letter to Pakistan customs agents.
The extension provides some relief to containerized scrap shippers from mounting daily fees, though the demurrage waiver is only half of the issue.
Scrap suppliers have not yet received waivers or extensions from shipping lines for detention fees, which are daily charges for using a container. Most surveyed by Argus do not expect to see much leniency.
“There are two parts to the puzzle, the other part is the shipping lines issuing waivers for detention fees, so this is meaningless until we get waivers on detention fees and Pakistani shipping lines haven’t been that flexible in the past,” one US supplier said.
Still suppliers are holding out hope that the government will step in and advise shipping lines to imposes a blanket waiver similar to the Indian government’s intervention on the issue to help mitigate the potential financial loss from mounting detention fees.
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