Stakeholder frowns at arbitrary port charges …Calls for evaluation of concessionaires’ performance

Stakeholder frowns at arbitrary port charges

.Calls for evaluation of concessionaires’ performance

 By AsuquoNuwak & NnadiOkezie,

Comrade Raph Agbogu is the National Public Relations officer, National Council of Managing Directors of Licensed Customs Agents, NCMDLCA. He is also the Managing Director, Sovereign Gate International Limited, as well as a career Clearing Agent.  

He spoke in this interview on arbitrary port charges, evaluation of concessionaires performance, traffic gridlock at Lagos ports access road and other vital issues affecting the growth of maritime sector of the economy.

Excerpts:

Terminal operators and shipping companies have been accused of arbitrary port charges. What is your take on this issue?

This practice can never be experienced anywhere in the world, except in Nigeria. Nigerian Port Authority, NPA, and Nigeria shippers’ Council, NSC, are port regulators.  Their core function is port administration. The type of charges we have within Nigerian context is what can be described as “arbitrary”. The rates being charged by terminal operators and shipping companies are too high and were introduced without proper consultation with the stakeholders.

Every terminal is attached to a shipping company. For instance, APMT is a sister company to Maerskline, as Maerskline is charging, APMT is also charging. The shipping companies have refused to provide trucks holding bays.

If I may ask, why all these charges?  Why should shipping companies collect storage charges? It is a big rip-off. This makes Nigeria a difficult place to do business. The cost of doing business is very high and maritime industry is falling day by day. As a way forward, the government should take a critical look at this problem of indiscriminate port charges and set up a committee of experts to handle the situation. There is urgent need to review the issue of arbitrary port charges.

So many leaders in strategic position do not know what they are doing because they have not employed the services of professional into the right position. Government should listen to the advice of experts and enact a legislative framework to tackle the issue of arbitrary port charges, otherwise Nigeria will continue to remain in trouble.

What is your view on NPA’s decision to reject foreign shipping companies containers repositioning fee?

NPA has taken the right step in the right direction. This action can be described as double billing and a way to frustrate the ease of doing business in Nigeria.

This is absurd and worrisome. Nigerians are suffering every day, as the cost of cargo clearance is getting higher. Container deposit is paid on every container you see on the truck. When the grace period for container deposit elapses the shipping company will ask for more money for the service it has not rendered. Why should the shipping companies introduced containers repositioning fee? The issue of arbitrary bill formed part of the highlight we discussed at the last meeting with NPA.

In the agreement reached at that meeting, all shipping companies and terminal operators where directed to provide holding bays for their trucks. According to the terms of agreement, relevant government agencies would rehabilitate all major access roads in and out of Lagos ports and Apapa environs.

Shipping companies and other terminal operators have turned the perennial traffic gridlock at Apapa into avenue to make more money. The prolonged traffic has prevented importers from clearing their containers in time. Terminal operators and shipping companies are said to be smiling to banks, as the delay caused by traffic attracts more demurrage, since the importers cannot access the ports to carry their goods.

This situation has created an avenue where importers are incurring demurrage while shipping companies and terminal operators smile to the banks. As the empty containers remain on traffic for days before getting to the ports, the time to return container deposit refund by shipping companies to their owners has completely elapsed. The container deposit refund is supposed to be made within few days. They are taking advantage of traffic gridlock at Apapa and other ports to milk port users dry. Before now, shipping companies have been reluctant to return container deposit refund to the owners in full. It is extremely very sad to know that the standard clearing condition set in Nigeria to guide operators on port charges has not been implemented, despite written documents to the Federal Government requesting for immediate intervention on demurrage, which freight forwarders and Customs agents are compelled to pay by shipping company.

The Customs agents are calling on terminal operators and shipping companies to grant them waivers on demurrage to owners of goods, which spend more time as a result of traffic. From the look of things, the shipping companies and terminal operators are undermining the directives given to them by port regulators and this is why the traffic gridlock in Apapa has made clearance of goods very difficult.

How would you evaluate the performance of concessionaires in terms of building proper infrastructure to handle larger vessels and to catch up with a fast changing shipping industry?

There is what is called Memorandum of Understanding, MOU, between government and concessionaires to operate at the ports within stipulated period of agreement. It is observed that the operational efficiency achieved by port concession exercise in Nigeria is being eroded by excessive charges, abuse of agreement by terminal operators and shipping companies. Drawing comparism on port charges in Nigeria and other neighbouring ports, there is need for Nigerian ports operators to reduce their charges, in order to bring back the cargo lost to Cotonu port and others. Since 2006 when the ports were concsesioned, Nigeria has recorded mass improvement in terms of turnaround times of vessels but still other problems persist at the ports. Some of the operational challenges hindering  smooth clearance of cargo from the ports include inadequate equipment, a lot of them lack infrastructure and operational equipment. For instance, between May and June 2018 at five star logistic, a fork lift caught fire while lifting container, the container was set ablaze and burnt down the container and its content, this incident took place due to lack of maintenance and over usage of the machine. If the fork lift had gone through routine check-up, the damage wouldn’t have been much. There was no proper maintenance.

What would you consider as other operational challenges  hindering smooth cargo clearance from the port?

  In this case, I will be fair with Nigeria Customs Service, NCS. They have overworked themselves and subjected to fatigue and hard times due to absence or lack of scanners. The modern day Customs, according to World Trade Organisation, WTO and World Customs Organisation, WCO, standard stipulates that Customs is supposed to operate electronically for scanning containers. The terminal operators have not put in place enough operational equipment and the ones they are using currently do not have the capacity to operate effectively. Other factors are motivated by delays associated with procedures for scanning containers, lack of holding bays and high cost of clearing cargoes. The absence of scanners at the port is hampering examination process and large delivery. We cannot achieve 48 hours cargo clearing scheme for now due to clumsy port operational facilities and few other hitches inherent in cargo clearing.

Port users attribute persistent gridlock experienced on the ports access road to terminal operators, shipping companies and tank farm operators over their refusal to provide holding bays for their trucks. What is your take on this?

  The issue of holding bays is very paramount. Lagos is a cosmopolitan city and business port for Nigeria. The issue of trucks, which carry containers has not been handled well. Let alone tankers and other general goods entering Apapa. If there is provision of holding bays the persistent problems associated with traffic gridlock would have been solved.

Majority of the trucks you see on the ports access roads have no business being there. There is what is called call-up system, which enables the truck to load once it is called upon to load. Some trucks will station at the highway waiting for Customers to hire their services, as some of them will remain there waiting for patronage. A close observation will make you realise that on every Friday the transporters will take their trucks to their various yards, meanwhile the road will be freed and cleared at this time of withdrawal. The trucks will later come back on Monday, or reappear on the road on Monday. While some trucks remain on the road due to some work done on their engines, which is called tramping and some trucks are deliberately abandoned on the road. It is a very big challenge.  If we cannot address it, we cannot achieve much.

What is your reaction on multiplicity of agencies at the port?

  What maritime police is doing is illegal. The issue of maritime police blocking containers is wrong. The maritime police is doing the same job of the port police. It is not their duty to block containers; they should only act on information from INTERPOL. But in fairness, there are cases they act on information from INTERPOL to achieve a better result, but now they are taking undue advantage of the situation.

The implication is that the importers are suffering while shipping companies and terminal operators are busy enriching themselves. They don’t have the right to block the job examined by Nigeria Customs Service. Everything in Nigeria is done through manipulation. There is no thorough description of duty.

 Can you tell us more about your company?

The name of my company is Sovereign Gate International Limited. The company is into international shipping, export services, consultancy, clearing and forwarding, cargo logistics solutions, oil & gas, trade and investment.

How long have you been in this business and what brought you into this business?

Everything in life is about divine mercy and blessings. As a young man in the 90’s, when I came to Lagos in search of white collar job. I came in contact with a business man whose name was Alhaji Hamza who presided over Hamza Holdings Limited. While I was there, he detailed me to make research into export business. As a result of that assignment given to me I ended up entering clearing and forwarding.