KARACHI, April 2: Shipping companies continue to charge 'Pakistan Port Surcharge' that had been declared "unjust and illegal" by the ministry of communications about three years back.

During the 1980s there had been acute congestion at the Karachi Port and the waiting time for ships was too long, and besides disturbing normal shipping schedule it also resulted in heavy demurrage.

Consequently, leading shipping lines unilaterally imposed the Pakistan Port Surcharge (PPS) also known as the Karachi Port Surcharge (KPS). This did not only make country's external trade costlier, but also directly affected exports and imports.

Although there has been no congestion at the Karachi Port for the last many years and the waiting time has almost come to a zero, leading shipping lines and their agents continue to charge this surcharge.

The ministry of communications directives issued on September 16, 2000 had clearly stated that the PPS imposed and charged by shipping companies or their agents on imports and exports was not only unjustified, but also illegal under the present circumstances.

But the shipping companies continue to violate the law and are least bothered about an adverse impact on country's exports and imports. A surcharge on export goods means making Pakistan uncompetitive in the world market and on imported goods means higher cost for production.

Trade bodies representing importers and exporters on many occasions approached the Karachi Port Trust and urged them to check the 'illegal' act of surcharging their consignments. But the reply was: "KPT has nothing to do with PPS or any other charges levied by the shipping companies or their agents."

Former vice-chairman of the All Pakistan Paper Merchants Association (APPMA) and member of the KCCI committee on ports and shipping, Noor Mohammad told Dawn that the shipping lines being member of the South Asia Rate Agreement (SARA) had to follow its rules and should not breach the contract.

He said that a huge amount of over Rs2 billion was being annually recovered by the shipping companies and transferred out of the country. This has a direct negative impact on the overall performance of the economy, he added.

The KCCI, he said, had documentary evidence that the KPT made payments to stevedores out of wharfage collected from consignees for handling of goods.

At present, he said, the shipping companies were charging PPS at $100 per 40-feet container and $50 for 20-ft container for Far Eastern ports. He said the shipping lines had also introduced new charges in the name of delivery order (DO). "And from time to time they have been imposing Insurance Premium Surcharge (IPS)."

Noor Mohammad laments that shipping companies also take Terminal Handling Charges (THC) which are normally taken only when de-stuffing of container is carried out. But, they recover it under the guise of "local" charges and also repudiate their claim by admitting that "shipping agents are bound to take the charges, including THC and ancillary charges as directed by their shipping lines."

"All such 'illegal' and 'unjust' charges are causing colossal losses to the national exchequer and forcing the people to pay higher cost for the goods they purchase," he added.

In another development, the Union of Small and Medium Enterprise (Unisame) in a meeting held on Friday took strong exception of the matter that the shipping lines are charging GRI from exporters.

It was pointed out that shipping lines had started charging general rate increase (GRI) ranging from $100 to $250 per 20-feet container from March 20. Afzal Hussain, convener, freight committee Unisame, said this came to about 10 per cent increase in freight, which was unfair and unjustified.

Unisame convener Zulfikar Thaver said that all over the world the GRI was always decided by a body comprising shipping lines, freight forwarders, clearing agents, exporters and government representatives. "But in our country, the shipping lines unilaterally take the decision."