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Automation is key to Ports efficiency – Bello:

By on October 20, 2014

Mr. Hassan Bello is the Executive Secretary/CEO of the Nigerian Shippers’ Council. In this interview with Tokunbo Adedoja, he speaks on the activities of the council since it was appointed as the economic regulator of Nigerian ports, efforts to address cost of shipping, the traffic gridlock  in Apapa due to the presence of ports in the area and plans to make Nigeria the first choice for shippers

The Nigerian Shippers’  Council was made the economic regulator of the ports early this year. What have you been doing since you were assigned that responsibility?

The first is to gain the confidence of the industry. The port industry is made up of varied interests and the first assignment for the shippers’ council was for it to be acknowledged and recognised by the various stakeholders who are under our purview and this we have been able to do because of the wide consultations we have been having. When we look at this assignment given to us, it is not without any precedence.  Shippers’ Council has always been a countervailing force to see that things are done in unison and favourable atmosphere. So, we have pedigree and experience in these issues but the assignment given to us is a step higher and this assignment is simply to make sure that our ports are efficient and efficiency is comparable to the ports we are having competition with. To make sure that the clearing procedure for cargo and other issues are streamlined in accordance with international standards. Shipping is international and Nigeria shouldn’t be an exception. We should enhance the revenue of the government through that, which means getting cargo from our competitors.

This is also very important. We have to have the cost and the ease of doing business be well focused in Nigeria. Just like other economic indicators, the Nigerian ports system should mirror the seriousness of government and I think government has been serious enough, we are on the right path, we have known now that we have to be transparent in all our dealings, we have to be democratic, but most of all we have to be scientific. So, we have done the primary issues, that is, we have gained acceptance, we have gained recognition and respect. Now we’re laying it on, as they say, and the cost is clear and we are going into the nitty-gritty of regulation.

You have had series of town hall meetings with various stakeholders, what is the outcome of the meetings?

They are two, as far as I am concerned. First, the private sector which the ports or the terminals were concessioned to. Now it is important to note that since the ports were concessioned to private sector, there had been remarkable improvement in the way of doing business.  There have also been remarkable investments by these investors in terms of infrastructure and machinery they put into their terminals. It is our duty to guarantee and protect these investments. We also have the government side and the government side is by institutions or agencies of government.

They are also by their statutes or certain agreements or by law expected to provide certain services.  They are also service providers, so we look at them as service providers and we have to work with them closely to see that the expected services they are expected to provide are provided. What it means is that while we guarantee the investments of the private sector, we should also make sure that government provides the conducive environment for the investments to translate into the expected profits.

You talk about ports efficiency, I am aware that importers have been complaining about the delay in getting their goods cleared. There have also been complaints about PAAR. What are you doing to address these complaints?

Precisely, that was why we were appointed. You see, despite the introduction of the private sector, there seems to be a kind of directionless.  There was nobody to supervise, to monitor or coordinate the activities or obligations of the stakeholders. You need a monitor, you need a referee  or an umpire. That was why we were appointed and we seem to be getting it. Even though we were appointed when the game had already started, we have come with the whistle and we are taking  control of everything. Ofcourse there are complaints, genuine complaints and these are what we have been facing. Every day we have complaints  here, we have a complaints unit and we know what these complaints are. We need to have a bird’s eye view about ports operations to be able to make decisions. It is true that consignees or shippers have complained about unfair trade practices, they have complained about arbitrary increases in charges, they have complained about delay, almost primitive clearing procedure with so many documents, very cumbersome and time wasting.

These are realities. And then the costs. One of the hallmarks of ports reforms is to bring down the cost of doing business.  Unfortunately, this is not the case. But then it is a kind of a chain, there are so many things involved, we know what the problems are and we are solving that.  By the time we are through things will never be the same again. There are short term, medium and long term issues that will go a long way in solving the problems of the ports. And as long as we work with the stakeholders,  we work with the customs, we work with the NPA, terminal operators and the shipping companies, we work with freight forwarders, we work with the insurance companies and the Central Bank, which we are doing now, you will see that we will have a kind of a recognised system and processes that will lead to the elimination of this.

The first thing we did was to stop arbitrary charges. You can never increase any charge, and that includes the government side, neither  the government or the private sector will increase any cost without recourse to the Nigerian Shippers’ Council. Attempts have been made to raise these charges but it’s been stopped. The era of impunity is gone. You can never have that again.

Things must come through scientific processes, it cannot be emotive or just off the cuff increase that shippers have been suffering. Now, the process of clearing the goods must be automated. Automation is the answer to so many other things. Just like it happened in the ports of Antwerp, it should happen in Apapa ports. And this we are talking with many stakeholders. If we are able to do that, then everybody will smile. The shipping companies, the terminal operators will have more volumes of cargo, that will translate into their profits, that will guarantee increase investments, also the government will smile because it will quadruple the income of the government. So, I think this is the time we are seizing the opportunity to assure everybody that time has come  when things will never be the same again at the Nigerian ports.

The motto of your organisation is “protecting the Nigerian shippers”. I don’t know what you have done in terms of reducing some of these abnormally high charges.

Yes, we are in the process, we have started negotiating and very soon this will bring positive outcome because once these charges are reduced,  you will see that the cost  of doing business will come down and you will see that many people will rather have their cargo in Nigeria than our competitors in neighbouring countries. We are in that process and very soon we will make announcements of that positive result of that negotiation.

The government  is working on deep sea ports at Lekki and Akwa Ibom State, can you let us know the state of work?

It is first of all private sector initiative and one of the functions of the Nigerian Shippers’ Council  is to coordinate the investment in infrastructure including  the deep sea ports . There have been deep sea ports in Lekki together with the government of course. There have been initiative at Badagry  and there is  the one in Akwa Ibom.  These are significant. We have infrastructure deficit and it is even more obvious in the transport sector. Our infrastructure must be modern. For our economy to be aligned into the world economy, we must have modern transport in infrastructure. We have to have intermodal or multimodal transport system where the various modes are integrated. We should have a modern transport system which is a mirror that investors will look and see how serious or otherwise we are. So transport is the first point of call to see. And this government is serious about it. Government has taken concerted efforts to see that  we revamp the rail, for instance. Soon or even at present we could see cargoes being ferried by rail.

This is a positive indication of government seriousness. Then the deep sea projects is also significant because of the economics of scale which are glaring. If we have deep sea ports, it will accommodate larger ships, larger ships means larger volumes. But if we have deep sea ports, because to be honest, the capacity of the ports that we have has even been overstretched, they are even operating beyond their intended capacities, and we need to develop more modern ports, ports that will not have problems like we have in Apapa or Tin Can.
We envisage a port that has exclusive access roads or access to the ports are exclusive. That means we have them linked with the rail, we have them linked with separate modern roads and also inland waterways. We envisage a port that is automated throughout so that the clearing processes will be positive. So, the government is extremely conscious and it should be encouraged to see that this is done especially now that all these projects are headed by the private sector.

I think that the idea sound so good but I am also afraid that solving the problem of traffic gridlock in Apapa may compound problem on the Island.  Getting out of the island is hell every morning, ditto returning back because of serious traffic, particularly when you are approaching axis with roundabout. Now we are talking about deep sea port in Lekki, you can imagine the kind of traffic problem that would be shifted to that axis when articulated vehicles begin to ply that route…?

We don’t envisage the use of Lekki road alone. We went to Lekki, for instance, and had meeting with the promoters of the project in which we emphasised that there must be access, independent access. What we have here is not access to the port, it is access to everywhere. You want to go to one office you are on the road with the trailers. I think there is a working plan with the Lagos State government to provide rail link to that port. We can never afford to make the same mistake we have made. So I don’t think that is envisaged.

I am aware that some shippers, especially those of automobiles, prefer neighbouring port in Benin Republic. What are you doing to make the ports in Nigeria become the first choice for shippers?
This is a pertinent question, it is a very important question because the whole thing is a function of competition.  Gone were the days when we just wake up and say Nigeria should be the hub. Why should it be the hub? You are a hub if you are efficient.  People have choices, it is a voluntary contract of carriage you enter with the carrier. So you nominate your port. Everybody should be allowed to nominate his or her port. This is port A, its depends on what charges are mine going to pay. How many days will my cargo wait? How many documents will I sign? You know, if port A pays a lot of charges, spend hundred days before I get my cargo after signing several documents, after having to meet many agencies and so on, then I will shift to port B. So that is what we are saying and the terminals are conscious of that. We have to reduce the clearing process to a minimum and it has to be automated. We have to have an audit of the efficiency of Nigerian terminals. That is what Nigerian Shippers’ Council is going to be. We know the KPIs, we know how to measure the efficiency of the ports and then there should be efficiency of the ports – the sea side and the land side, which is evacuating the cargo. You mentioned some roads and all these kind  of things, the Nigerian Shippers’ Council has stepped in to make sure that there is a flow of cargo in Apapa. So the efficiency of the ports is the primary function of the Nigerian Shippers’ Council and there must be a sanction. You know, you have signed agreement to deploy certain machinery or equipment into your ports, you have to know the amount of the gangs that you are having there, stevedores, these are hallmarks of efficiency. So if you had worked on one ship for instance, for how many hours? It should take you, with the right equipment, with the right machinery, with the right workforce, certain number of hours. The Shippers’ Council will soon go to all these terminals and start measuring their efficiency and then encourage people to be efficient so that you will encourage more shippers to your ports. The same thing with the clearing procedure. There should be more of scanning, I mean containers.

There are many things that are imported that are not in containers but I am just using container as an example. It should be scanned, it is automation instead of a laborious and very cumbersome, time wasting, irritating physical examination of every container. If there are issues with the container then it should be physically examined.  But the shipper themselves must be told in clear terms that they must be transparent in their declaration because non-compliance has constituted a lot of problems. Once they have declared that this is what is contained in their container, only for the scanner to pick certain things, then the whole thing starts all over again. First, the freight forwarders must be professional, the truckers must have new fleets, not this ramshackle that we have, there must be automation in payment and then you can sit in your house and clear your goods from the port. No need for you to go and have human physical contact which breeds corruption. So, that is the long term… we want automation, we want port community system or a national single window so that there will be efficiency, there will be transparency, and it will stop leakages in revenues for the government. We just came out of IMO meeting in London where these issues were stressed on behalf of Nigeria for us to pursue trade facilitation so that we will have efficiency, and the meaning of efficiency is so that your port will be the preferred destination for so many cargoes. You could see what it could translate into for the economy, even employment. The labour content of efficiency should be well known to us by now.

 

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