METAL dealers see an adverse impact on their operations following the decision by shipping lines to impose a requirement for a Letter of Indemnity and Deposit on containers.
Metal Dealers Association of Selangor and Kuala Lumpur president Lim Sin Seong described the practice that started in 2008 as grossly unfair and said it would result in extra cost of doing business.
"Our members currently account for more than 70 per cent of the steel imports into the country and these unfair business policies of shipping lines are increasing our business cost unnecessarily," Lim said.
Speaking at a press conference in Seri Kembangan, Selangor, yesterday, he said despite forwarding the issue to the government and relevant authorities, shipping lines had been imposing Letter of Indemnity requirement on importers.
"They (shipping lines) want us to be responsible for all damage to the containers regardless of where such damage may have occurred and without regard to the original condition and age of the containers," he said.
Lim said of late, in addition to such a letter, shipping lines had begun to require a deposit ranging from RM300 to RM1,200 per twenty-foot equivalent unit container.
"Such deposit taking, if left unchecked, will amount to at least RM1.5 billion being held, according to the Federation of Malaysian Manufacturers' estimation," he said.
Lim said this will add unnecessary cost of doing business to industries which rely on imports of raw materials to compete in the regional and global market.
He said industry players wanted the authorities, especially the port regulators, to closely look into the problem and not to let shipping lines implement new rulings as they please.
Lim said the government, through its relevant ministries, must work together to ensure port authorities not only enforce their role as port regulators but also act as moderator to ensure fairness in fees and operating guidelines.
"We have sent a letter to International Trade and Industry Minister Datuk Seri Mustapa Mohamed on the matter last Thursday and hope the matter will be resolved," he said.
Lim said metal dealer players were also alarmed by the policy of shipping lines of withholding delivery order whenever there are unresolved disputes or claims against importers.
He said such an act had put duress on importers and was clearly against internationally-accepted good practices in most advanced countries in Europe and the US.