Government moves to reduce shipping cost

September 2, 2022 / Comments (0)

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The Minister of Transport, Kweku Ofori Asiamah, has announced plans by the government to accelerate ongoing measures to streamline charges at the ports to help reduce the cost of shipping in the country.

As a result, he said processes were underway to develop service standards for the operations of shipping lines, terminal operators, freight forwarders and other service providers.

Speaking at the fifth Ghana Shippers Awards in Accra on August 19, the minister said the government was keen on implementing measures that would help shippers and shipping service providers remain competitive in the global shipping and logistics industry.

“The world has witnessed some difficult moments with the COVID-19 pandemic; just as we were readying ourselves to adjust economically to live in the new normal, the war between Russia and Ukraine reared its ugly head and has economically disrupted many recovery programmes globally, including Ghana.

“As a result, hopes of the cost of freight returning to pre-COVID-19 levels hang in the balance. This has also resulted in an unstable cost of doing business in our ports, bringing an enormous burden on your operations which has invariably affected the cost of goods on our markets,” the minister said.

He said the International Monetary Fund (IMF) had concluded that dramatic increases in shipping costs were having a slow but consistent impact, contributing to inflation with that likely to continue through to the end of the year.

Already, he said global inflation rise had been blamed on this development, pushing the United States to enact legislation to improve oversight of ocean shipping, which its lawmakers believe will help curb inflation.

“Ghana joins the US and other countries to appeal to all shipping service providers to reduce their charges to help tame inflation globally,” he said.

Shipper complaints

Mr Asiamah stated that the ministry over the years had taken note of shipper complaints including arbitrary charges by some service providers, demurrage-free counting days, working extra days and hours and arbitrary exchange rates used by some service providers.

“I am happy to inform you that action is being taken to find lasting solutions to these complaints. It is my fervent hope that consensus would be built to deal with these matters as quickly as possible to help not only support your operations but also accelerate economic growth,” he said.

He said the government had recognised efforts being made by some of its agencies to reduce the cost of doing business at the ports and has entreated them to intensify their education on avoidable costs at the ports, key amongst them being demurrage.

“I wish to use this opportunity to also appeal to our industrious shippers to comply with all operational requirements and avoid cutting corners as the consequences would be detrimental to their operations,” he said.

He added that the government was committed to creating the conducive environment needed for businesses to grow because the growth of their businesses will mean growth for the economy.

Slowdown in trade

The Chief Executive Officer (CEO) of the Ghana Shippers’ Authority (GSA), Benonita Bismarck, stated that the UNCTAD estimated that global maritime trade was affected by two key events in the first quarter of 2022 which was expected to further slowdown trade in subsequent quarters of the year.

She said worsening COVID-19 outbreaks and lockdowns in essential port cities in China resulted in cancellation of cargo bookings from China, diversion of freight to other ports, port congestion and delays.

Also, she said the Russia/Ukraine conflict continued to have an ongoing impact on global container supply chains mainly from increased bunker costs.

She said the relatively high cost of shipping, particularly in sea freight costs, poses a burden on shippers and port users in general.

According to her, this will ,therefore, require that we strengthen our domestic measures and trade procedures to reduce costs at the ports and ensure efficiency in supply chains.

She said to achieve this, all stakeholders in the maritime trade, shipping and logistics sector must consolidate their efforts to bring about harmony, transparency and efficiency in their operations.

GSA’s mandate

The CEO stated that as the organisation that is mandated to promote and protect the interest of shippers in Ghana, the Ghana Shippers’ Authority has made significant strides in finding solutions to the challenges of shippers in the country and to make them not only efficient but also competitive.

“We have achieved these through our innovative programmes across the country in the form of trade facilitation, sensitisation, trade advisory support and services among others.

“These efforts have yielded tangible results in the areas of improved trade compliance, capacity of shippers to manage their shipments, timely delivery of import and export cargoes and improvement in border crossing time,” she added.

Source: Graphic Online

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