Indian ship owners urge coastal container transporters to settle unpaid freight as coronavirus bites

The Indian shipping industry has urged the coastal container transporters to settle outstanding freight within the agreed credit period.

“It will not be possible to provide any extended credit on such bills,” Anil Devli, CEO, Indian National Shipowners’ Association, wrote in a letter to Rahul Modi, President of Coastal Container Transporters Association (CCTA).

Besides, the Indian National Shipowners Association (INSA) has told the users of shipping services to pay freight as soon as the cargo is transported to the discharge port but before taking delivery of the cargo,

The shift to low sulphur fuel oil from January this year, has raised the operating costs for Indian ship owners. While foreign container ships imposed surcharges and increased freights due to LSFO, local ship owners continued to provide services at minimum or no increase in freight, Devli stated.

“Our members have also been providing trade credit to customers for periods negotiated privately. All in all, the users of the coastal trade have continued to enjoy the economic benefits of the services provided by our members,” he said.

However, in the past more than 30 days, the pandemic has completely disrupted the cycle of services being offered, impacted revenues immensely while costs have continued unabated.

“While road and rail services were stopped, our members have continued to operate their ships and provide transportation services to trade. However, volumes have been a shadow of the normal and capacity utilisation has fallen considerably. All of the loss of business accompanied with the need to continue to run efficient ships have put considerable strain on the working capital requirements of our members,” Devli pointed out.

For the past more than 10 years, the Indian ship owners have been providing services of transportation of domestic cargo in containers. The service continued despite the steps taken by the Ministry of Shipping to permit foreign flag ships to carry Export Import laden and empty containers as well as domestic cargo. Our members suffered loss of market revenue but continued to carry on these services, he added.