Editorial: Freight forwarders decry distorted pricing, unfair competition in shipping

The escalating cost of demurrage paid by importers and businesses on weekly basis to shipping lines is a source of great concern to the Ghana Institute of Freight Forwarders (GIFF).

Data from the Institute indicate that every week importers pay an estimated GH¢30million in demurrage to shipping lines at the ports.

Mr. Stephen Adjokatcher, GIFF’s President, blames the situation on delays by regulatory authorities in processing documents for expedited clearing. He cites examples where documents could linger at the Environmental Protection Authority (EPA), Ghana Standards Authority (GSA) and others for weeks, while clients suffer demurrage and port rent charges.

However, the Institute is confident that government’s 24-hour economy policy is the surest way to prevent and curb demurrage, which has been a major bane for businesses and importers.

Consequently, Mr. Adjokatcher appealed to the Ghana Shippers’ Authority to intervene in amending the number of days for demurrage.

Freight forwarders are intermediaries between clients, shippers and Customs. Notably, the Institute collects revenue on behalf of government and is a major stakeholder in government tax policies and decisions at the ports.

To buttress GIFF’s point, documents sometimes linger at the Environmental Protection Authority (EPA), Ghana Standards Authority (GSA) and others for weeks while clients suffer demurrage and port rent charges.

This activity greatly impinges on the country’s ability to significantly reduce the cost of doing business to attract the needed investment and grow our struggling economy. Demurrage charges in Ghana are often considered high and contribute to the high cost of doing business.

While efforts are being made to reduce these charges, they remain a concern for businesses. High demurrage costs can make Ghanaian exports less competitive and increase the cost of goods for consumers.

Delays in document processing, bureaucratic procedures and operational inefficiencies at the ports are often cited as reasons for high demurrage charges.

The quest to reduce high costs of doing business is facing a significant hurdle, as the Ghana Shippers Authority (GSA) points fingers at international shipping lines for allegedly imposing arbitrary exchange rates and actively resisting regulatory oversight.

Long-standing complaints from businesses and freight forwarders about exorbitant charges and opaque practices within the shipping industry must be addressed as they inflate import and export costs and threatens to drive businesses to other more competitive ports in the West African sub-region.

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