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Call for cost of logistics to be cut to compete levels

Sok Chan / Khmer Times Share:
A logistics centre in Cambodia where goods can be transferred. The private sector wants costs cut. KT/Chor Sokunthea

The private sector has called on the government to tackle unofficial fees for imports and exports and bring down logistic costs to facilitate trade and lower the price of doing business in the Kingdom.

The unofficial fee costs importers and exporters around $250 to $300 for a 20-foot (about 6 metres) container of goods, says Sin Chanthy, president of the Cambodia Freight Forwarders Association (CAMFFA).

Sin added that fees on the Terminal Handling Charge (THC) and the Container Imbalance Charge (CIC) is still high for importers and exporters compared with Thailand and Vietnam. “The THC fee is from $180 to $220 for 20-foot containers and $220 to $240 for 40-foot containers, while the CIC fee is from $180 to $240,” according to Sin.

He said the unofficial fee is a challenge for importers and exporters.“We would like the government to tackle the unofficial fee as much as possible,” Sin added. “Our members have reported that they spent a lot of money on the unofficial fees,” he added.

“We all pay taxes because our members are also aware of it. If the unofficial fee is reduced, we will be successful,” he added. Sin said that the private sector wants  production in the country to flow freely.

To make it better for logistics and transportation, the government should reduce the procedure and automate some tasks, Sin pointed out. He said that transportation fees in Cambodia could cost the importers and exporters more than $500 excluding trucking fees. While there is unofficial fee involved, the cost brings it up to more than $800 for a container.

Chan Pich, general manager of Signatures of Asia, a leading rice exporter said packaging and completed warehouse business – consisting of customs, warehousing, dry ports and trains – still need to improve. Also the cost of the local THC document fee needs to descrease.

“We still have to pay THC charge from $130 to $150 for exports although the government announced it was lowered to $100,”  Chan added. “For me if the THC is cut to $100 for 20 feet, it could save $1.25 per tonne per container (24 tonnes).

Chan added that the export fee is included in the terminal handling charge, documentation fee, cargo handling charge, seal fee, manifest fee, administration fee, surrendered fee, ENS filing fee and customs clearance.

Lim Heng, vice-president of Cambodia Chamber of Commerce (CCC), said that to boost the competitiveness of imports and exports, government should invest more in the infrastructure and upgrade the routes to connect neighbouring countries.

“The CCC is also working closely with the customs department to facilitate imports and exports. Now, the customs department has issued the fee charge to the importers and exporters.

Although we met issues, we are still working to resolve them,” Lim added.

Kaing Monika. deputy secretary-general of the Garment Manufacturers Association of Cambodia (GMAC), posted on his Facebook that the private sector hopes that in 2020 the fee related to logistics would be lower. “All relevant stakeholders should contribute to boost the competitiveness of the Cambodian logistics sector,” he added.

In March this year during the Public-Private Sector Forum, the government introduced some measures to facilitate trade and lower the cost of doing business. The measures include the withdrawal of the inspection role of the Cambodia Import-Export and Fraud Repression Directorate General (Camcontrol) at the international gateways, which include border crossings such as checkpoints, seaports, special economic zones and other export and import inspection zones in Cambodia.

In addition, the government abolished the (state-owned) Kampuchea Shipping Agency and Brokers (Kamsab), and ceased issuing Certificates of Origin (CO) for the export of goods unless importing countries need one.

It also reduced logistics fees including loading costs and services fees at both the Phnom Penh and Sihanoukville Autonomous Ports.

Those fees include the THC, which was reduced by $5 for a 20-foot equivalent unit (TEU), and the CIC, which was reduced by $20 to $100 from $120 for 20-foot containers, and $40 to $200 from $240 for 40-foot containers.

The Ocean Freight Charge (OFC) was reduced by 50 percent and the Emergency Bunker Charge (EBC) was eliminated. It was $15, $30 and $30 for 20-, 30- and 40-foot containers, respectively.

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