News & Events

Unfair Practices and Charges by irresponsible shipping lines. Enough is Enough!

1. Some shipping lines are still behaving irresponsibly and the time has come to declare that
enough is enough and it is time to call out these shipping lines; who behave as if they own the
country and can do whatever they want in Malaysia.

2. The Ministry of Transport and PKA have declared that there would no longer be any need for
container deposit, with the availability of the three instruments; SFFLA NCD (Non-Cheque
deposit), D&D CLA (Container Ledger account) and icargo+, for shipping lines to choose, in lieu
of container deposit requirement.

3. The SFFLA NCD scheme was also revised based on requests and feedback from shipping lines
to offer them added comfort and protection and the final SOPs for the NCD scheme were
adopted, after nearly two months of review.

4. The dust had hardly settled when COSCON Shipping Sdn Bhd required an additional Letter of
Indemnity (LOI) from both importers and forwarding agents; contrary to what was agreed that no
LOI was necessary anymore.

5. The intransigence of COSCON to toe the line has upset the forwarding community and importers.
Apart from this, COSCON also implemented a slew of charges for the following:

i) late e D/O payment – RM 100.00
ii) Bounced cheque, penalty charges – RM 100.00 each time (in addition to BNM charges)
iii) Wrong/over-payment, double payment, under-payment – RM 50.00 each time.
iv) Customer Profile re-activation charge – RM500.00
v) Cheque validity period reduced from 6 months (BNM) to 4 months
FMFF’s stand is that these unfair practices and charges have been imposed without consultation
with the stakeholders and also against the grain of best industry practices. We believe that
COSCON is abusing its dominant position and call upon MYCC (Malaysian Competition
Commission) to institute an immediate investigation into COSCON Shipping’s practices

6. If the situation is not quickly contained, other shipping lines would be emboldened to come up
with similar unfair practices and charges.

7. Recently, Evergreen shipping has also notified of their Import Container Maintenance Service
Charge, amounting to RM25 x 20’ standard container and High Cube and RM 50 for 40’ and 45’;
while RM50 is charged for reefers, special equipment and metal scrap. The amount is chargeable
for each container and is not refunded even if there is no damage to the container.

8. New Star Agencies, acting as agent for Gold Star Line has imposed a very unfair charge; which
is late collection of Delivery Order, after 7 days from date container is landed, at USD 50.00 for
the following 7 days. There will be increments of USD 50.00 for every subsequent 7 days period,
up to USD 350.00 for the 50th-56th day period.

9.There are many reasons why the Bill of Lading may not be ready or available to exchange for
the Delivery Order. No importer would wish to delay clearing the containers from the Port as the
undelivered container would incur storage, removal and demurrage charges. And to have to pay
a late Delivery order collection fee again is tantamount to Shylock demanding a pound of flesh
and a pound of blood. One of our members was invoiced USD 1400 or RM6222.40 by New Star Agencies as late payment charges. When the amount was disputed, the amount was reduced to USD 350.00. What if there was no dispute raised? The importer would have had to pay the USD 1400.00 as invoiced earlier. There was never such charge since shipping practice started. When a Bill of Lading is presented to the shipping line or its agent, the shipping line/agent must issue a Delivery Order in exchange for the Bill of Lading. This charge is unjustified and unwarranted and there is certainly a strong element of profiteering. We call on the Government agencies, especially KPDNHEP to investigate this complaint
immediately. Gold Star Line (Israeli shipping company) was approved by the Ministry of Transport and Ministry of Foreign Affairs to call at Malaysian Ports. We request MOT and Ministry of Foreign Affairs to review the approval, set conditions that such practices and unfair charges are not allowed or
withdraw the approval to Gold Star Line to operate in Malaysia immediately.

9. The current practices of shipping lines reflects the convenience and impunity of shipping lines to
implement any practice that they wish, without any regard for the users; which adds to the general
malaise of importers in Malaysia, using international shipping services.

10. FMFF wish to urge the relevant authorities and agencies, whether MOT, MITI, KPDNHEP,
Customs Department, Port Authorities or MYCC to do something before the situation gets worse.
They must remind the shipping lines that if they want to operate here, they have to toe the line.
As shipping agents are licensed under section 90 of the Customs Act 1967, FMFF wish to
propose that Customs Department set conditions on charges and best practices when renewing
shipping agents’ licences. Similarly, Port Authorities under the Port Authority Act can licence
shipping lines and set conditions in the licences issued. We have the avenues to regulate the
shipping lines and we must do it before the situation worsens. The apparent inertia and impotence of the relevant Ministries and agencies have emboldened these shipping lines to the extent that they can act with impunity. It is high time that we call the shots.

11. We can take a leaf from Sri Lanka which issued a decree that all landside charges be
incorporated into freight charge. And all the shipping lines calling Colombo Port toed the line.
And none of those shipping lines cancelled their services to Colombo Port. In fact, the throughput
at the port has increased. Similarly, Malaysian government must make the rules and they must
toe the line or good riddance to them. Any capacity withdrawn by unhappy shipping lines out
from Malaysia would be taken up by other shipping lines immediately. It’s time to call their bluff
that if shipping lines are unhappy, they will not call Malaysian ports.

12. We strongly urge the relevant Ministries and relevant agencies to stop pussy footing with shipping
lines and start protecting the interests of our importers and exporters. This time, it really is
enough.