Shipping Lines Respond to Allegations of Illegitimate Charges in Ghana

The ongoing controversy over alleged illegitimate and arbitrary charges imposed by shipping lines operating in Ghana has drawn a direct response from the Ship Owners and Agents Association of Ghana (SOAAG). Following recent protests by freight forwarders and members of the Ghana Union of Traders Association (GUTA), the Executive Member of SOAAG, Adam Imoro Ayarna, has refuted claims of any wrongdoing by shipping lines, calling for a retraction of such statements due to their serious business implications.

In an interactive session with Eye on Port’s Kennedy Mornah on national television, addressing the concerns raised by traders and freight forwarders, Mr. Ayarna emphasized that the shipping lines operate within the framework of Ghanaian law and international regulations. “Our members conduct their businesses in full compliance with the laws of every country in which they operate, including Ghana,” he stated. He challenged the characterization of charges as “illegitimate” and “arbitrary,” asserting that shipping lines follow a strict contractual process when engaging with customers.

The Executive Member of SOAAG explained that shipping contracts are clear and transparent, with terms and conditions outlined before the shipping process begins. “In shipping, when a shipper approaches a shipping line, there’s a dialogue, an offer, and conditions that are agreed upon. These include local administrative charges and freight costs, which are always stated upfront,” he said. “If anyone does not understand the charges, they can ask for clarification. The charges are not hidden.”

He elaborated on the shipping process, noting that both the shipping lines and shippers enter into a mutual contract of carriage, governed by international and national rules. “The contract clearly includes local charges at the origin and destination,” Ayarna explained, emphasizing that these charges become part of the agreement signed by both parties.

The SOAAG executive also refuted accusations that shipping lines are charging in U.S. dollars, which would contravene Ghanaian regulations. “There is a difference between pegging something in dollars and charging in dollars. The law in Ghana is clear: all transactions must be invoiced in Ghanaian cedis,” he said. “If shipping lines are accused of charging in dollars, it’s important to clarify whether this refers to freight costs or local activities. Freight is not the local agency’s income, but is collected on behalf of a foreign principal, and the Bank of Ghana’s rules are very clear in such cases,” he asserted.

Mr. Ayarna further addressed concerns about the cost components involved in shipping, stating that the freight portion of the total shipping cost is minimal. Drawing on his own import experiences, he shared figures from February 2024 to illustrate the breakdown.

“For a 20-foot container, freight accounted for just 1.6% of the total shipping cost, and the local shipping charge was 0.4%, making it 2%,” he noted. “For a 40-foot container, freight was 1.1%, and local charges were 0.5%.” These figures, he insinuated, demonstrate that freight and local administrative costs are a small fraction of the total shipping expenses.

He also pointed out that some accusations, such as “cleaning charges” and other surcharges, are misunderstood. According to him, the cost of delivering clean and well-maintained containers is necessary. “Shipping lines are obligated to provide clean, odourless containers. If a container is returned in a poor condition, it must either be cleaned or a cleaning charge will apply. This is part of the container’s maintenance, and it’s in line with global shipping practices,” he explained.

Ayarna added that the SOAAG has already addressed such concerns. “We’ve had discussions with our members to minimize administrative costs where possible, and today, only one shipping line charges cleaning fees across the board,” he said. “The others have either eliminated or significantly reduced such charges, based on feedback from customers and regulators.”

Demurrage – the charge applied when cargo is not cleared within the free period – has been one of the contentious points in the ongoing protests. Ayarna acknowledged that demurrage can be a burden but stressed that it is preventable. “If you clear your cargo within the free period, there’s no demurrage,” he said. “For the past five years, I have personally not paid demurrage on any cargo, because my clearing agent handles the process within the given time.”

He attributed delays in cargo clearance to a range of factors, including system challenges and documentation issues. “These challenges are sometimes beyond the control of the shipper or the clearing agent, but it’s important to understand that demurrage is part of the contractual agreement. If your cargo isn’t cleared within the stipulated time, the charge is applied. However, many shippers, especially larger ones, negotiate extended free periods upfront, which can help reduce or eliminate demurrage,” Mr. Ayarna said.

One of the protestors’ major grievances was the application of demurrage during weekends and public holidays when shipping lines and banks are closed, making it impossible for shippers to clear their goods. Mr. Ayarna acknowledged this concern and indicated that SOAAG is actively working to address it. “It’s true that demurrage is charged on weekends and holidays, but we’ve advised shipping lines to make provisions for remote cargo release during these times. Some shipping lines already have platforms that allow agents to release cargo offsite, even on weekends,” he explained. “If there’s a particular shipping line not complying with this practice, we are open to investigating it and resolving the issue.”

Mr. Ayarna called for ongoing dialogue between shipping lines, shippers, and regulators to address such concerns. “We believe in open communication and collaboration. If there are issues with demurrage or other charges, we encourage shippers to engage with the shipping lines directly or through the appropriate channels, rather than making accusations without proof.”

In response to allegations from some shippers that SOAAG has been attempting to coerce them into boycotting the Ghana Shippers’ Authority, Mr. Ayarna denied the claims. “I don’t know the context in which these allegations were made.” He was adamant that shippers should approach the shipping lines whenever they have problems in shipping and clearance because the lines prioritize service to their clients. “If a shipper comes to us with a concern, our first step is always to engage the shipping line and attempt to resolve the issue amicably.”

Adam Imoro Ayarna concluded by urging all parties involved in the shipping industry – from freight forwarders to regulators – to engage in constructive dialogue to resolve disputes. He explained that shipping is a complex business, and misunderstandings can arise. However, it’s important that stakeholders approach these issues with facts and a willingness to find solutions.

Source: Eye on Port