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Backlogged scraps at ports: Who is the victim?

Summary

On 2nd of August 2018, at the meeting on strengthening the control of containers of imported scraps and handling backlogged scraps at ports, hosted by the Vietnam Maritime Administration with the participation of port operators, shipping companies, and shippers' associations. It was commented that the carriers are the victim, others said that the port operators are the victim.

Updated on : 21-08-2018

Description of goods as "scene description"

According to the Vietnam Maritime Administration, in addition to the existing backlogged goods at ports, a large volume of scrap plastics and papers are being imported to Vietnam’s seaports because shipping companies and importers have signed shipping contracts, or goods have been loaded on ships to transport to Vietnam. The prevention and handling of the existing backlogged scraps at port is an urgent problem.

At the meeting, representatives from several units said that the description of the imported goods on the dossiers sent to shipping companies and port authorities is too long to identify scraps.

The representative of the Maritime Administration said that some shipping companies are in charge of transporting goods, but do not declare the goods as scraps on the manifest (actually those goods are scraps). It is only after the goods are unloaded into the port that the volume and kinds of scraps can be specified.

Mr. Trinh Phuong Nam, Director of Operational Center of Saigon Newport Corporation said that the Corporation stopped receiving scraps to Cat Lai port. Some shipping companies abuse the description of goods by disproportionately using long phases which include only one word “plastic” to transport the goods to the port. When being discovered, the shipping lines blame the fault on the owners.

Mr. Nhu Dinh Thien, Secretary Board of Vietnam Ship Agents and Brokers Association said that the law has regulated on the deportation of goods, but has not provided sanctions, so a Circular regulation specifying sanctions for this case should be issued. Scrap products are special hazardous goods, so the licensing should only be for the competent units and processing plants, in order to avoid the current massive licensing of enterprises which has lead to the situation where enterprises are taking advantage of licensees for trading.

Regarding the responsibility of the shipping companies, Mr. Thien said that the shipping companies are not the victim, because when the shipping companies load goods on their ships, they have to know what the goods are, and cannot answer that they do not know. Goods that are not eligible for import should be resolutely returned to the place of loading.

A representative of the Department of Management Supervision - General Department of Customs, said that the Customs Law clearly regulates the responsibility of the shipping companies. Shipping companies receiving merchandise information as "scene description" are responsible for describing the goods of the sender, and cannot say that they do not know what the goods are in the containers.

What do the shipping companies say?

Representatives of some shipping companies attending the meeting said that the backlogs of goods at ports, especially scraps which are not received by the owners, cause a lot of financial damage due to container rental rates.

The representative of the CMA-CGM said that the company has suffered a great amount of damage from backlogs at seaports. The company does not want to receive scraps of enterprises without permits. However, due to lack of information of enterprises which are licensed, it is impossible to know whether enterprises have permits or not.

The representative of the Maersk shipping company said it is only a service provider. When goods are backlogged and goods’ owners do not receive them and containers are detained, the competent authority is requested to update that information to the general system for the company to know, so as to be able to carry out the contract for shifting scrap goods.

Mr. Viet Anh, a representative of Cosco shipping company said that from 2017 and earlier, the licensing of scrap imports was allocated to localities, but from early 2018, the licensing has only been done by the Ministry of Natural Resources and Environment. Management documents are overlapped and scrap import permits have been issued on a massive scale. When the backlogs occurs, the licensing is tightened, making it difficult for enterprises to find management agencies to open directions for enterprises with permits. If not, shipping companies also encounter difficulty in handling goods backlogged at ports.

Shipping companies and port operators also proposed that the Ministry of Natural Resources and Environment need to publicize information on licensing of scrap imports and import quotas on the National Single Window Portal or its website.

At the meeting, the port operators and shipping companies also proposed that the management agencies need to shorten the processing time for backlogged goods at ports, especially for low-value goods such as scraps.

Customs is ready for coordination with Maritime Administration in handling backlogged scraps

Mr. Bui Thien Thu, Deputy Director of Vietnam Maritime Administration, said that the management of imported scraps relates to many ministries and sectors, if there is no unified direction, the above situation will still take place as in the current situation. However, there is a need to develop a harmonious solution as it also involves the import of scrap iron for manufacturing units.

Mr. Trinh Phuong Nam, Director of the Operational Center of Saigon Newport Corporation said that when receiving the information that China had banned the import of scrap iron, the Saigon Newport Corporation reported to the competent authorities, but the response to this was slow. It was not until May 2018, when the volume of scraps imported to ports increased and goods owners did not receive the goods, that Saigon Newport Corporation imposed a ban on import of scrap plastics and would only receive scrap papers and steels. At present, about 9,000 tues (equivalent to 4,500 containers) of scrap papers and plastics are backlogged at Cat Lat port, accounting for nearly 20% of the port’s capacity. If the situation is not settled, not only will it stop receiving until 30th of September 2018 as announced, Saigon Newport will continue to stop importing plastic scraps to Cat Lai.

Source: Customs News