The irritants are legion. The long time taken for the entry of product names by customs authorities. Non-availability of small containers. Lethargic labourers at the ports for loading and unloading. All of which delays shipment and leads to penalties on exporters by banks.
We export on thin margins to beat competition, but even those get erased at times because of delays in various customs and port procedures, says Morgan DSouza, export manager at American Spring Pres Work Ltd, a firm specialising in plant protection and agriculture equipment.
As if this werent enough, the five-day week for customs and port authorities stymies exporters efforts to maintain delivery schedules. These eminently avoidable delays impact exporters profit margins.
The firm deals in seasonal export of equipment part and machine tools. Its orders have typically to be executed in three to four weeks time. We manufacture products as per the requirements of our overseas clients. However, delays are caused because of long-winded export procedures.
The documentation procedure takes time, sometimes causing a delay of two or three days. This is despite sending meticulous proforma invoices and packing lists to the customs authorities. From customs, these then move to clearing & forwarding (c&f) agents who, in turn, send it back to the customs department.
The problem is that the customs authorities manually enter hundreds of small products mentioned in the packing list.
There is no automated process to prevent delay in getting the Bill of Entry (BoE).
Once the BoE is given, exporters have to scrounge around for containers, which are invariably in short supply. Both JNPT and Nhava Sheva ports face acute shortage of containers. Due to the unavailability of containers, goods cannot be carted to steamers in time, thus derailing the scheduled departure of goods.
Moreover, loading and unloading of goods, once they are transported to ports, is also a time-consuming process. Liners have their own sheds but the loading and unloading by labourers is done in a lethargic manner, Mr DSouza laments.
As a result of all these delays, exporters tend to miss the first available ship for transporting goods. The goods then have to wait for next steamer for a pick-up. In case there is a Saturday and Sunday in between, the goods tend to get delayed even more.
Even after all these delays, when the goods are finally boarded on ships, exporters worries are not over. The banks add insult to injury by charging a penalty. Since the date mentioned in the bill of loading does not match the date mentioned in the letter of credit, the banks will charge a penalty of $50 per query, which is their term for any discrepancy between the terms of bill of lading and letter of credit.
All these delays and penalties increase our expenses sharply and erode our margins, says Jaideep Wairal, director of a small export firm, Abel Consultants. While guaranteeing profits to exporters is not the governments business, keeping exporters uncompetitive should definitely not be its agenda either. Its time the government got out of the latter.