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Regulator beams searchlight on ports operators, axes shipping companies

By on July 7, 2014

Nigerian Shippers Council (NSC), in its new function as Ports Commercial Regulator last week, slashed shipping charges  at the ports  by 50 per cent, a development that appears to have put  affected  stakeholders and others on their toes,  reports Francis Ugwoke
After weeks of consultation and study of the environment, the Nigerian Shippers Council (NSC) which was appointed Ports Commercial Regulator recently appears to have hit the ground running. Last week, the regulator sent words round to the ports industry operators on the need for change from all forms of illegality. The regulator intervened in checking the high cost of doing business in the ports.
The take-off point appears to be with the shipping companies with a critical evaluation of all forms of shipping charges in the country involving the operators. It did so with the stakeholders at a round table meeting in Lagos.  After a careful scrutiny, the council reduced some of the charges by 50 per cent. This was notwithstanding the position of the officials of the shipping companies that they should be given more time to do so. The regulator also moved on to trace the reasons   behind delay in goods delivery at the ports in what will follow action that will address the issues involved.  The target, a source says, is to drive down the cost of doing business in Nigerian ports for the benefit of the national economy.  This is considering reports that Nigeria has lost a lot of shipping and cargo traffic to the neighbouring country’s ports of Cotonou  and Tema, Ghana, because of their efficiency, which includes affordable cost.
Shipping charges  slashed
Over the years, shipping companies, dominated by multinational  agencies with Nigerian cronies, have had it all for themselves,  in what looks like being above the law. They have had to introduce charges that have been described as ‘unapplicable in Nigeria’, according to government fact-finding reports. Some years ago, attempts by government through the NSC to check the companies failed. They used their links, including legal instrument, to stall perpetually a directive to drop some  illegal charges. Some of the charges remained even after the  concessioning of the ports to terminal operators. The matter was made worse as the reform programme in the ports was carried out without a commercial regulator.
With the continued outcry from importers and their freight forwarders, the federal  government recently decided to appoint a commercial regulator which is expected to ensure  efficiency in the system, including bringing an end to illegal charges. Last week, the Shippers Council as the commercial regulator in the ports decided to slash some shipping charges imposed on importers by 50 per cent.
An executive of one of the  shipping companies who attended the meeting told THISDAY that  the shipping companies   pleaded for time to do so, and were given 21 days ultimatum to effect  the new charges identified as shipping line agency and container cleaning charges.  The development was applauded by stakeholders in the industry, including the President, National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero,  who said that the regulator should do more as some of the charges by the shipping companies were not tied to services rendered.
A shipping company source  told THISDAY  that  the Director, Commercial Shipping Services, Mrs D. Shall-Holma,  observed  that  the Shipping Line Agency Charge (SLAC)  was not part of the Memorandum of Understanding (MoU)  that the  council  signed with the shipping companies. She had  requested the shipping companies to justify the charge and the service rendered under it.
In view of this, one of the representatives of the shipping companies, THISDAY was informed, told the meeting that the committee set up by council and the shipping companies to review an existing MoU had recommended SLAC as one of the nomenclatures. He said what was  in contention   was the  rate to be collected, adding that   SLAC was part of the terminal handling charges collected  by shipping companies before concession  of the ports  to cover documentation and administrative charges. It was at this stage  that the council told the shipping companies to reduce the charge by 50 per cent. Although the shipping companies did not object  to the reduction, they  pleaded for 21 days grace period to enable the shipping companies meet as an association and  return to the council.
At the expiration of the three weeks, importers are expected  to pay N14,550 on SLAC instead of N29,100  paid currently.  Similarly, Mrs Shall-Holma,  during the meeting, expressed surprise that the cleaning  fees were being imposed on imports instead of exports. Our source said that she   informed the meeting that Global Shippers Forum which Nigeria belongs to  had   taken a decision to abolish container cleaning  fee globally. However,  following explanation  that the charge was to take care of damage on containers by importers  when returning them, the shipping companies were asked to change the charge from Container Cleaning to Container Maintenance Fee at the rate  of N1,500 industry benchmark  instead of  N2,500 earlier collected  as Container Cleaning Fee.
Container Deposit
Importers  and  freight forwarders believe strongly that the  amount being withheld as container deposit by shipping companies runs into several billions of naira. A freight forwarder, Mr Simeon Okezie, said that  the problem had been traced to  many of the  shipping companies claiming that the containers had been dented even when there was nothing wrong with  them, adding that in most cases, this was a ploy to keep what was  paid to them.  At the meeting,  the commercial regulator, it was gathered, told the shipping companies to stop withholding container deposits paid by importers for too long as has been the case all these years once the  empty container are returned.
The shipping companies were ordered to refund container deposit within 10 days. To enforce this, the council told the shipping companies that it will put in place monitoring mechanism to check compliance with the directive, threatening that a penalty would be imposed on defaulters.  It equally directed the  importers and their freight forwarders  not  to default in returning the  empty containers to the shipping companies in good time.  It is  expected  that the council will  work on the penalty to be imposed on shipping companies  and importers that default  either  way.
Delay in Clearing and High Demurrage
As part of the moves to ensure efficiency in the system, and apparently to justify the high demurrage  charges  on importers, the shipping companies told Shippers Council during the meeting that  the Nigeria Customs Service(NCS) and other government agencies  were part of the problem. Such problem was the reason why  importers pay more demurrage to the shipping companies.
The shipping companies   said that on the average, electronic manifests are submitted to the customs three to four days before the arrival of  vessels, adding that  with this,  the service and others  have  ample opportunity  to make necessary arrangements for vessel reception and break bulk. The shipping companies  criticized  the Nigerian Maritime Administration and Safety Agency (NIMASA), saying that it takes four to five days for the agency  to process ship sailing certificate, and two days to confirm payments. This trend, the shipping companies said was not the best as it delays the system.  Other agencies identified   for contributing in the delay  in goods clearance at the ports include  the Nigeria Police and  the  Nigeria Immigration Service (NIS).
Immigration officials were   accused of   arm twisting  crew members, adding that on   flimsy excuses, the officials would usually collect the seaman’s books and passports of crew members only to demand for money for its return.
The  Police was on the other hand accused of detaining  containers at the terminals, in what the  officers will only change position when hands are greased.  Based on revelations from the shipping companies, the Executive Secretary of the council , Mr. Hassan Bello, is expected to meet with  the Comptroller-General of the Immigration Service and the Director-General of  NIMASA  to discuss  some of the issues raised  against their agencies  to resolve the issues amicably. It was gathered that  the  council equally  would  take up the issues affecting the customs  with the Customs Area Controllers.
Comparing Notes with Neighbouring Ports
Apparently to ensure that importers  are discouraged  from  preferring    neighbouring ports to the nation’s ports,  it was gathered that the council is considering  sending commercial officers to Cotonou  and Tema ports  to  study  the tariff rates of shipping companies for comparative analysis with what obtains in the country.
It would be recalled that a similar investigation was carried out in the past when Chief Adebayo Sarumi was Executive Secretary as an assignment from the federal government. The committee had discovered a lot of disparities against the shipping companies in Nigeria. Efforts to stop the shipping companies failed as they sought a court injunction that lasted for years restraining the Shippers Council from effecting any change. Sarumi had few weeks ago disclosed this, noting that it was one of the steps he said was necessary for the Federal Government to pursue to protect the council as a regulator.

 

 

[This Day]