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Faulty scanners raise goods’ clearance costs at ports

By BusinessNews Staff on May 11, 2015

In the past one month, there have been minimal clearing of containers at the Lagos ports. This has been attributed to the faulty scanners used for the examination of containers at the Apapa and Tin Can ports.

Both the Apapa and Tin Can ports have only two scanners each, a situation that stakeholders say is not ideal and has frequently caused delays in goods clearance.

Aside from not being able to take delivery of their goods, importers and clearing agents alike are now burdened with the task of paying demurrage, which accrue on imported goods that are not cleared over a specified period, to the terminal operators who store the containers until they can be taken by their owners.

Presently, terminal operation charges in Nigerian ports for a 20-feet container is N62,682, while that for a 40-feet container is N87,682. The demurrage-free period at the ports is three days.

According to Trading Economics, the country’s annual inflation rose to 8.5 per cent in March, touching the highest in seven months and driven by a spike in food prices. Compared to March of 2014, the prices of imported food items have risen by 8.9 per cent.

The President, Shippers Association of Lagos, Rev. Jonathan Nicol, told our correspondent that the additional expenses brought on the shippers as a result of the faulty scanners would eventually be passed on to the end users of items in the stranded cargoes at the ports in the form of high prices.

He said, “For over three weeks now, the scanners at the Apapa Port have broken down. The terminal operators have started charging demurrage and this has caused a lot of problems. I don’t know how they expect shippers to pay demurrages when they know that the Customs clearing process has broken down.

“The Nigerian Shippers Council has called for a stakeholder meeting on Monday (today); I hope everything is sorted out then.”

Nicol called on the Nigeria Customs Service to replace the faulty scanners with brand new ones and also to increase the number at both the Apapa and Lagos ports.

He said two faulty scanners were insufficient to handle the number of cargoes being discharged at the ports as the existing ones could not scan more than 150 containers daily.

Nicol said, “There is no reason the NCS cannot change all the scanners at Nigerian ports. The scanners presently in use at the Lagos ports were those that were purchased by the private companies, which previously handled our clearing process.

“Those scanners are old; with the number of cargoes coming through the Lagos ports, we need no less than four scanners each at the Apapa and Tin Can ports. These will ensure that a minimum of 400 containers are cleared daily.

“Instead, we are having a situation where when the scanners have worked for a while, they are given an hour to cool off before they are put to work again. This makes our ports very stressful places to do business.”

According to him, it is the shippers that suffer it more, adding that if the Customs fails to scan, the importers may lose the delivery contracts.

“Goods are often shipped because people need them; when they are not cleared at the time they are supposed to be cleared, the service contract can be cancelled. The shippers lose both ways; he pays all the charges to the operators and the general public suffers because we add all the costs on the items,” he explained.

Nicol also criticised the NCS for its seeming insensitivity to the plight of shippers and Nigerians at large.

He said while the Customs was not losing any revenue as a result of the crisis at the ports as import duties were usually collected upfront even before the containers arrived, the country was losing business through the partial congestion, which had been created at the ports due to cargo not being cleared.

“The more boxes the Customs scan, the more space the terminal operators will have for new containers. However, if the containers already at the ports are not being cleared, there will be no space to receive those being brought in by ships and this will cause a partial congestion,” he added.

A concerned stakeholder, Mr. Ogunlowo Olorunfemi, had last week written to The PUNCH to complain that the two scanning machines at the Tin Can Island Port had been grounded for a month, subjecting shippers and clearing agents to the payment of huge demurrage.

The Director, Media and Communications, Seaport Terminal Operators Association of Nigeria, Mr. Bolaji Akinola, said it was unfair to blame the body for the high cost of doing business at the ports, adding that the STOAN was only responsible for about five per cent of the total cost of the logistics chain from when a cargo was shipped from the port of origin to arrival at its final destination.

He described space as crucial to port operations as the shorter the dwell time of cargo, the more money the terminal operators would make by handling more cargoes.

Akinola said the STOAN did not collect demurrage charges and described the progressive storage charges at the ports as a punitive measure meant to discourage the use of terminals as storage facilities, adding that clients were usually encouraged to move their cargoes on time so as to avoid congestion at the terminals.

He said, “The STOAN investors are here for the long term; we are not in a hurry to make profit. Our goal is in alignment with that of the Federal Government, which is the transformation of our ports towards greater efficiency.

“In line with this goal, over N200bn has been invested in the modernisation and upgrade of the various terminals across the seaports in Nigeria.”

The spokesperson for the NCS, Mr. Wale Adeniyi, did not pick calls made to his mobile telephone line, while text messages sent to the same number were not replied as of the time of filing this report.

[Punch]

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