DUBAI (Agencies): In another move to bring greater transparency to the local shipping and logistics sector, all Terminal Handling Charges must be settled only through the Dubai Trade Portal from November 1.
This applies to shipments directed into and through Jebel Ali Port.
The move closely follows a directive issued by Dubai Maritime Authority – in May last – for logistics companies in the emirate to submit their local port handling tariffs to the government entity.
And, most importantly, not to raise them unless the company receives specific clearance from the Authority. The intention is to standardize local port and container handling charges in Dubai where possible.
How the new system works
Logistics companies in Dubai will charge clients directly, and the local port operator will issue invoices separately for the provided services.
“This would cover terminal handling as well as truck loading and unloading charges,” said Haris Shaikh, Managing Director at Dubai-based Gallop Shipping. “And the payments will be collected directly via the Dubai Trade Platform. “With the implementation of the Dubai Maritime Authority ruling, the charges would now become transparent, thereby cutting down some of the other charges.
“Dubai has been the hub for trade, and this new approach to enhancing the transparency of local sea container charges will increase its competitiveness.”
Submission deadline
June 30 was the deadline by when shipping and logistics businesses had to submit their local sea container tariffs. (These charges apply to the various costs that clients were billed for services rendered at the port.)
“Everyone had to submit their local charges and the authorities came back with corrections on some charges,” said Usman Rehman, Managing Director of Time World Freight.
“While we can’t say there was a significant drop after the Maritime Authority directive, what we did see was charges became standardized across the Dubai market.”
The intention, industry sources say, was to ensure the most competitive rates were on offer at all times. Plus, once the rates standardized, it was up to the clients to decide which company to sign up for their logistics needs.
“What Dubai Maritime Authority did was remove the grey areas on how local sea container charges were billed,” said an industry source. “It’s been working well and delivering the results everyone had been hoping for.”
Prior approvals
If service providers find it necessary, they ‘may’ increase sea container rates ‘strictly to reflect’ new or increased costs issued by the port operator or government. “This gives customers or freight forwarders the opportunity to move cargo on a contract basis, as any cost fluctuation can be brought under control to an extent,” said Sheikh.
According to Usman Rehman of Time World Freight, the Dubai Maritime Authority’s move to bring uniformity – and transparency – to local sea container charges will remove any tendency to ‘over-price’.
“Look, much of the container rates into the UAE are dependent on demand fluctuations at the port of origin,” said Rehman.
“But what Dubai has done is bring to control to rate setting at the local level, and remove any ‘over pricing’ tendency on export shipping charges and local logistics costs. That in itself is a big step.”
Meanwhile, the UAE Ministry of Finance has released two significant decisions, Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023. Under these decisions, changes have been made to qualifying income and activities in free zones. “Free zones are central to the UAE’s economic growth, attracting foreign direct investment as well as fostering a favorable business environment,” Younis Haji Al Khoori, Undersecretary of the Ministry of Finance.
“These new decisions reflect the continued significant role of free zones in the UAE’s economic diversification strategies and commitment to aligning with international taxation standards.”
“The certainty of a competitive Corporate Tax regime and offering a special regime for free zones cements the UAE’s position as a leading global hub for business and investment and drives its sustainable development agenda,” he added.
Cabinet Decision No. 100 expands the definition of Qualifying Income to include income from the ownership or exploitation of Qualifying Intellectual Property, following the methodology of the OECD’s modified nexus approach outlined in Ministerial Decision No. 265 of 2023.
Ministerial Decision No. 265 lists the trading of Qualifying Commodities as a Qualifying Activity, allowing a 0 per cent corporate tax rate for income generated from physical trading of various commodities on recognized stock exchanges.
It also covers derivative trading income used for risk hedging in such trading activities.
Furthermore, the Ministerial Decision provides clarity on the scope of Qualifying and Excluded Activities, offering transparency to free zone businesses.
