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Ports charges: Stakeholders laud Shippers’ Council, demand more action

By BusinessNews Staff on July 21, 2014

Importers and freight forwarders, while applauding the moves by the Ports Regulator to reduce some shipping charges, have called for more investigation on the charges of the operators and to beam searchlight on the terminal operators running the ports, reports Francis Ugwoke
The recent moves by the Nigerian Shippers’ Council (NSC) to bring about efficiency in the ports industry by getting shipping companies to reduce some charges have received applause by industry stakeholders who in turn have asked for more action. The council, as a Commercial Regulator, had recently demanded a reduction of some shipping charges by operators. The shipping charges include Shipping Line Agency Charge (SLAC) and Container Cleaning which the operators were directed to reduce by 50 per cent. Similarly, the council directed the shipping companies to begin to refund container deposits within 10 days after such containers had been returned to them.
The decision was taken during a meeting with the shipping companies who were given time to effect the changes. Reacting to the measure that is seen as capable of cutting the cost of doing business at the ports, importers and freight forwarders described the move by the Ports Regulator as a good development, adding that it has justified the quest for a regulator in the system all these years. But the stakeholders were of the view that the council should step up efforts at ensuring compliance as well as addressing charges as they affect terminal operators.

X-raying the Excesses of Shipping Companies
President, National Association of Government Approved Freight Forwarders (NAGAFF), Dr Eugene Nweke, told THISDAY that the action of the council by directing the shipping companies to reduce their charges was welcome, adding that for a very long time, the operators had taken Nigerian importers for granted. Nweke who spoke generally on the ills of the shipping companies, said the ugly trend needs to change with the presence of a regulator. Beginning with container deposit that runs into billions of naira as outstanding, he expressed dismay that there was lack of uniformity among the shipping companies, adding that each charged whatever it wishes.
He said the amount charged on container deposit ranges from N100,000 to N500,000 for 20ft and 40ft containers respectively. According to him, this was without the depreciation value of the containers after two voyage which should be the time to return the empty to the Container Yard for refurbishment. He also added that it is even worse if the container is for special equipment. Nweke told THISDAY that investigations showed that a good number of the containers coming to Nigeria were no more transport worthy.
He pointed out that this explains why some shipping lines hardly show interest in picking some of the containers, sailing back without the empty containers. Nweke equally criticised shipping companies for giving three days grace period for berthing period of vessels even though it would take terminal operators the same three days to discharge goods and stack them at the terminals. The shipping companies, he said, also force the importer or his agent to pay two weeks demurrage upfront, a condition, he said, has been made non-negotiable, if the consignee must take his cargo.
Other excesses of the operators, according to the NAGAFF president, include a practice in which duly issued delivery orders are blocked before seven days expiration time for a debit note. He lamented that this was happening even with the fact that the shipping companies and the terminal companies do not have enough space for the returning empty containers. The shipping companies are also accused of imposing demurrage of the container not received on time from the truck driver.
Another issue, he identified as a bad practice is a situation in which demurrage charges are imposed for delays as a result of software system failure. He added that after receiving the container, it takes months, or a minimum of a month after the empty container is returned before the deposit is refunded. This is done with all manner of frivolous deductions, he said.
He also accused the shipping companies of insincerity in the payment of the refund, adding that while the empty containers are collected from the agent, the shipping companies would insist on paying the refund to the importer.
“Incidentally, this is amazing because at one point the freight forwarder is compelled to sign indemnities which is an indication that the forwarder as indeminified is the agent to the shipper (importer)”, he said. He said that the result had been that in most cases, some customs agents have had to abandon the container deposits to the shipping companies, apparently because of the reluctance of the importer to repay the forwarder the difference between the him and the shipper.
Nweke, while noting that statistics showed that the shipping lines have collected N106billion based on N26,000 per bill of lading, said that with these findings against the shipping companies, the Ports Regulator while being commended on the efforts to ensure an efficient trade facilitation in the country should equally carry out external audits on the shipping companies beginning from the time the ports reform exercise was carried out to date.

Demand for Searchlight on Terminal Operators
Identifying mainly handling charge and storage charge as the main charges that the importer or his agent is expected to pay, Nweke, accused the shipping companies of illegal charges. He identified cargo fast track fee, logistics for scanning, and scanning fee as some of the charges being imposed on importers. Nweke called on the regulator to also investigate the charges. He said the situation is even worse if a cargo is stemmed for bonded terminal, adding that in most cases, the cost becomes double.

Other Stakeholders
Other industry stakeholders who spoke to THISDAY on the current moves to reposition the ports industry on the path of cost efficiency, among others, by the ports regulator, commended the federal government for empowering the council to address all issues that will lead to trade facilitation in the ports. A frontline freight forwarder, Chief Olu Adesina, described the efforts of the ports regulator as timely. According to him, the shipping companies need to be checked to save Nigerian importers from their excesses.
Adesina called on the council to also consider as a matter of necessity to equally investigate the ports charges by terminal operators. “It is important to conduct the same check on these companies because some of the shipping companies are owned by the terminal operators and most of them have the habit of cheating Nigerian importers”, he said.
He added that the absence of a regulator after the reform exercise in 2006 has been responsible for some of the frivolous charges by the shipping companies and terminal operators. “Shippers’ Council has started well by trying to see that the right thing is what we get in the ports as far as charges are concerned”, he said.
A maritime lawyer, Emma Ofomata, who praised the efforts of the ports regulator in checking shipping charges, was of the view that the council should summon all the courage it takes to be able to improve trade facilitation in the ports in line with international best practice. Ofomata said that the council should after studying what is the situation in Nigerian ports, compare it with international practice, adding that sometimes some of the shipping companies were in the habit of imposing charges that they cannot impose in other climes because of the weakness of the system here.
He called on the council to seek enough political will to step on toes in order to tackle every issue that will help in achieving efficiency in the clearance of goods in Nigerian ports.

[This Day]

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