The domino effect of the Hormuz crisis and the resultant cost spike is being felt across industries. The shipping sector is no exception. However, the shipping sector regulator, the Directorate General of Shipping, has advised shipping companies, vessel operators, and agents to refrain from predatory, non-transparent, and opportunistic pricing practices in the wake of disruptions caused by the West Asia conflict, a PTI report said.
As per the report, in an advisory, the DGS also asked them to ensure that all applicable charges are communicated clearly and upfront to exporters, importers, and other stakeholders.
“In the interest of promoting transparency, fairness and predictability in the EXIM logistics ecosystem, all shipping lines, carriers and their agents are hereby advised to refrain from predatory, non-transparent and opportunistic pricing practices, including levy of exorbitant charges, thereby taking undue advantage of prevailing geo-political issues,” the advisory stated.
Prohibiting multiple ancillary charges
The DGS advisory came following the regulator receiving representations from various stakeholders in the EXIM trade regarding the levy of multiple ancillary charges by shipping lines/carriers and their agents.
These charges are perceived as non-transparent and opportunistic, resulting in an escalation of transaction costs along the logistics chain, DGS said.
“They must should adhere to fair trade practices and avoid the levy of charges that may give rise to disputes within the EXIM trade and ensure that all applicable charges are communicated clearly and upfront to exporters, importers and other stakeholders,” it added.
Govt looking to help exporters: Goyal
Commerce and Industry Minister Piyush Goyal said the government is looking to extend help to exporters on the insurance front to help them deal with the ongoing West Asia crisis. He said an inter-ministerial group is keeping tabs on developments daily and interacting with exporters.
The Customs department has issued guidelines for handling export cargo returning to Indian ports due to the closure of the Strait of Hormuz and disruptions to maritime routes amid the West Asia crisis.
Insurance support
In this regard, new insurance schemes are also being looked into.
“Similarly, we are looking for developing some new schemes like insurance support… We are consulting ECGC (Export Credit Guarantee Corporation) and other departments on that,” Goyal said.
He said the government is looking at ways to help exporters whose goods have been shipped but are facing problems.
Exporters are facing issues due to a joint attack launched by the US and Israel on Iran. It has led to a spike in ocean freight, air transport, and insurance premiums because of disruptions in the movement of oil and gas consignments.