- cost passed on to hapless Nigerians as end-users of imported goods
By Ayodele Akinsola
SUNRISE NEWS, Lagos, Sept 14, 2020 The sleaze, extortion and graft on the part of the six international shipping companies operating in Nigeria are no doubts, mind-boggling and antithetical to the government’s policy of stimulating the economy and put it on an even keel.
The mad bull of peak season surcharges on Nigerian-bound cargoes by shipping companies from overseas has been going on notoriously without any regulatory authority, agency or person(s) to contain it.
In Nigeria today, the shipping lines charge between $1,000 and $1,500 per 20 feet container, well over 400 per cent increase from the previous $200 freight charge during peak period and for the inability
of importers to pay for the daily surcharges, many goods have been auctioned by Customs.
A Nigerian-born female journalist based in New York, Oladunni is one of the latest victims of the daily surcharges. She had during COVID-19 lockdown shipped down a Sienna mini-van and some household items and she was made to pay huge compensation (demurrage) for delay in clearing or unloading at the port against the directive of the Federal Government that goods imported during the lockdown should not attract demurrage. At the end of the day, she was forced and tearfully too, to pay more than N700, 000 for demurrage.
Another Nigerian, a bishop who has been living in Las Vegas, U.S for more than 20 years, also suffered a similar fate as he was extorted by a shipping firm for sending a car and personal items to the country in
preparation for his eventual home-coming. In spite of unsuccessful intervention by customs and others, he was made to `cough out’ a demurrage of over N900, 000 and before COVID-19 many Nigerians had at
one time or the other been extorted by the shipping companies.
Worried by the development, a protest letter was dispatched to the European Community Shippers Association (ECSA) by the Nigerian Shippers Council (NSC) on behalf of the Federal Government which
described the surcharges as nothing but scaled up economic sabotage and unease of doing business.
Following the letter, a meeting was held at which the Executive Secretary of the council, Mr Hassan Bello, described the charges as scary and that if a Nigeria-bound container is charged as much as
$1,000 it could suffocate the nation’s economy. In his words: The national economy is in trouble.
The rip-off and the economic sabotage playing out at the ports contravene Sections 20, 31 and 97 of the Customs and Excise Management Act.
The implication for the country’s economy is that many businesses depend on viable and business-friendly international shipping for profitability. Avoiding delays is, however, critical to guaranteeing a
seamless port operation; international shipments could face shipping delay charges resulting from various clearance issues.
Still reacting to the development, Bello said the surcharge introduced at a time when the nation trying to get out of the economic impact of the COVID-19 pandemic, would lead to spiral inflation in Nigeria.
He said:“Cargoes will be abandoned at the ports; it means job losses and many shippers will be put of business. The charges are astronomic, unjustified, not notified and discriminatory. This is against fair
trade facilitation rules.”
“The NSC has written to the erring firms and waiting for responses according. We have also written to ministry of transportation to escalate it to ministry of trade and ministry of foreign affairs, and
the federal government will protest the charges. We have been having surcharged in the range of $200 to $400, but 400 per cent increase and there was no time limit. Its already going to nine months it is not
what any economy can cope with. This can cripple the economy.”
With the intricacies in international shipping, there is still disorder in the Nigerian maritime industry over shipping companies’ outrageous charges, pitting stakeholders against one another while the
extortion and rip-off. In 2018, customs brokers at Lagos ports launched a “war” on shipping companies over a N4 billion demurrage following a strike by truck drivers. They had for six days in June
2018, refused to lift cargoes at the ports to protest alleged extortion by security agencies. Eventually, the N4 billion demurrages and storage charges were cleared by importers.
Shockingly too, investigations have revealed that N668 million demurrage was incurred daily during the six-day strike which amounted cumulatively to N4 billion.
The demurrage became a running battle between clearing agents, importers on one hand and the service providers on the other. While the clearing agents were calling for waivers over the strike period,
the shipping lines and terminal operators remained indifferent.
Since that crisis, the port economic regulator, the Nigerian Shippers Council (NSC), has been inundated with several petitions by clearing agents on the stifling charges by shipping lines. As if that was not
enough, the shipping companies last month unanimously imposed Peak Season Surcharge (PSS) on Nigerian-bound cargoes.
Meanwhile, the Federal Government and the Organized Private Sector (OPS) have agreed to fight the six multinational shipping companies, namely; Cosco, Maersk, MSC, CMA CGM, Hapag Lloyd and Evergreen
shipping over the indiscriminate charges.
Leading major stakeholders in the industry, the Shippers Council and others met recently in Lagos to present a common front to fight the arbitrary charges. In the coalition are OPS under the aegis of
Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI), Nigerian Association of Chamber of Commerce Industry Mines and Agriculture (NACCIMA).
On its part, the Lagos Chamber of Commerce and Industry has vowed to fight the charges as threatened by its Director-General, Mr Muda Yusuf, who said: “This is not the best of time for businesses generally in the country, we will resist it.’’ The Manufacturers Association of Nigeria also toes the same line as expressed by its President, Alhaji Mansur Ahmed.
“MAN will not accept the surcharge because it is coming at a time when manufacturers are working with less staff, less raw materials and lower profit. The price of goods will skyrocket and cost of transports will be unbearable,’’ he said.
Also for NACCIMA, the surcharge will affect commerce in the country critically. “Our members borrowed huge sums of money to import items and they are slammed this huge amount, then it would affect the banks too, ’’said, Mrs Margaret Orakwusi, the chamber’s representative at the meeting. Big importers including Dangote Group and Promasidor are not left out in the fight as they have indicated their preparedness to join forces with the OPS.
The Managing Director of Nigerian Ports Authority (NPA), Mrs Hadiza Bala-Usman, said the cut-throat charges might lead to abandonment of cargoes at the ports with loss of revenue to the ports authority.
“If the importers are charged so high and they abandoned them in the port, NPA will lose revenue and it would reduce efficiency and turnaround of ships to Nigerian port.”
However, the suggestion from the Vice-President, Association of Nigerian Licensed Customs Agents (ANLCA), Mr Kayode Farinto, urging collaboration with ECOWAS on the arbitrary charges is instructive and welcoming.
He declared: “It will affect our economy seriously because Nigeria is an import-dependent economy.’’
In addition to the demurrages and other charges, customs agents are also contending with the shipping companies and terminal operators the issue of storage charges and had petitioned the Presidency over the matter.
The association petitioned Vice-President Yemi Osinbajo, alleging that the shipping companies and terminal operators’ charge on storage in contravention of Sections 20, 31 and 97 of the Customs and Excise Management Act that limit the days for rent charges and empowered the Nigeria Customs Service to charge rent after specific days.
The National President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr Lucky Amiwero, who signed the petition, said the duplication of charges such as terminal delivery charges/terminal handling charges, deposit repayment delays and process procedure are killing and against economic interest.
“There is an urgent need for the Federal Government to intervene and address the cost of doing business by ensuring a total review of the procedure, process and cost in the ease of doing business.’’
The customs agents want the Presidential Enabling Business Environment Council (PBBEC) to also urgently address the short falls militating against import and export trade that had led to massive diversion of goods and imports to neighbouring ports of Benin Republic and others and use part of the seven per cent port development levy for the development of port access roads, trailer parks.
The petition states: “The condition of the Tincan Island Port Axis of Apapa Oshodi express road leading to the ports is a death trap, big potholes and gridlocks resulting in loss of lives and continued destruction of loaded goods that always fall on cars, trailers and sometime persons.
“It is a complete setback to trading across borders (TAB) for ease of doing business on trucks that spend weeks to access and exit the ports which result to delay and rejection on most of the fragile export products in international market and high cost in import clearance.
“The Nigeria Ports Authority (NPA) is no more in port operation, the percentage collected from the seven per cent Port Development Levy should be used for the development of the trailer parks and port
access roads.’’
Two associations in the maritime sector, the Shippers Association of Lagos State (SALS) and the National Association of Government Approved Freight Forwarders (NAGAFF), have also kicked against the charges.
While NAGAFF President, Mr Increase Uche, described it as unacceptable as COVID-19 does not give room for acceptability of such charges, SALS President, Mr Jonathan Nicol, said arbitrary and excessive shipping charges in the form of PSS will put Nigerian shippers and importers out of business. “How do you expect somebody to bring in a set of cargoes with $20,000 and is being asked to come and clear them from the ports with $50,000? Is that a viable transaction?
“Can you now see why cargo owners leave their containers in the ports? This is the reason why there are so many overtime containers in the ports,’’ he says.
Still on why containers will continue to litter the ports, Nicol said: “I don’t blame the people that abandon their containers in our ports because the cost of clearing those containers is twice the value of those containers. The foreign shipping lines were supposed to give a notice to shippers because we are trade partners, but they didn’t.
They just slammed the PSS charge on our consignment coming to Nigeria
“We don’t know how the foreign shipping lines arrived at $1,025 PSS surcharges for 20feet and 40feet containers coming to Nigeria, but why is it only on cargoes destined for Nigerian ports? Obviously, Nigeria is the target. The shipping lines claim they spend 50 days waiting to berth at Nigerian ports due to delays, and that they pay $2000 daily while waiting, but why are they bringing in PSS now in this Covid-19 ravaged period?
“It is time for the Ministry of Finance to make a statement on this because this action is killing our ports slowly. The Union of African Shippers Council (UASC) has already issued a statement on this, and it
is being escalated.”
According to him, the foreign shipping lines should be happy that they have cargoes to move because the freight charges should be enough for them.
“We are in a pandemic period, this is not the right time to introduce new and excessive charges. Everybody is giving concessions that lure people to come and do business in this pandemic period, so why are the shipping lines trying to kill business at this time?
“We are not against the shipping lines because we are trade partners with them. However, with the PSS introduction, we feel they are strangulating us. Don’t forget the border closure is still there. Why introduce PSS now in this Covid-19-rattled economy?”
Meanwhile, following the protest by the shippers’ council and the organised private sector over the indiscriminate charges slammed on Nigerian-bound cargoes, one of the six multinational shipping companies, Maersk Line, has suspended the surcharge.
The Managing Director of Maersk Nigeria, Mr Lara Lana, in a letter to the Executive Secretary/CEO of Nigerian Shippers’ Council, the company instructed its commercial department to stop applying the peak season surcharge effective from September 1, 2020.
“Our principals in our Head Office have informed us of your letter with subject reference increase in peak season surcharge. We would like to thank you for the supporting document you shared shedding light on the meeting between the ECSA and UASC,” the letter reads in part.
The five other companies are yet to initiate any action in this direction.