- Says freight forwarding sub-sector brings economic benefits to the nation
(By Udeme Clement):
It was a moment of encomiums for the President, Maritime Journalists Association of Nigeria (MAJAN), Comrade Ray Ugochukwu, after presenting a well researched paper at the just concluded second matriculation ceremony of NAGAFF Academy, held at Apapa, Lagos.
His paper titled: ‘Freight Forwarding as a Career: Benefits to the Nation’, was one of best presentations made at that memorable occasion, as Ugochukwu covered all aspects of freight forwarding operations in maritime trade.
That was not all.
Ray Ugochukwu, who is highly respected as a renowned writer and seasoned Journalist, made his presentation unique, as he gave step-by-step analysis of freight forwarding activities before colonial era, during colonial administration, after Independent and up till now.
MAJAN President, who was given special invitation to the programme as a Guest Speaker, also highlighted challenges facing the sub-sector and the way forward.
His presentation :
‘Freight forwarding is as old as maritime. Maritime encompasses the totality of activities that have to do with water or the sea. Maritime comes with shipping. The major object around which all activities in shipping revolve is the ship. So, with shipping comes freight forwarding, marine engineering, seafaring, stevedoring, dredging and a host of other ancillary services. Therefore one cannot talk about freight forwarding in Nigeria without delving a bit into the history of shipping in the country.
“Generally, with transportation that has to do with vessels as means of carriage, comes freight forwarding too. The history of Nigeria’s maritime industry pre-dates the colonial era. It is on record that before the colonial masters’ advent, shipping was going on in Nigeria especially in the riverine areas of the Niger Delta such as Bonny, Bayelsa, Opobo, Ijaw, among several others.
” Naturally, Nigeria remains a maritime nation with over 850 kilometres of coastline and over 3,000 kilometres stretch of inland waterways. This explains why even upland, there was serious shipping business, though in its crude form. Efforts towards the provision of facilities for ocean-going vessels started in the early 1900 with the construction of Lagos breakwater – East and West moles. Capital dredging activities aimed at opening up the Lagos lagoon commenced in earnest in 1906.
“In 1913, the Port Harcourt Port was commissioned by Lord Fredrick Lugard, who later became the Governor General of Nigeria, even as the port facilitated the export of coal, which was discovered in Enugu.
“A year later, precisely in 1914, the Lagos harbour was opened to shipping traffic, which coincided with the birth of Nigeria as a nation. 21 years later, in 1948, capacities were expanded through building of additional quay walls of 762 metres span. McGregor Liard, a Briton, is credited with laying the foundation of modern shipping in Nigeria. After he had captained he the first iron steamer to the Niger Delta coast of Nigeria in 1832, he went a step further to establish the African Shipping Company in 1849.
“He entered into a contract with the British Foreign Office in 1856 to supply a steamer every year for five years to promote trade in Nigeria. What this suggests is that a viable foundation was laid for development of shipping and by extension, freight forwarding, even before the Britons established their colonial hold on the country. It is to the credit of foreign companies operating in Nigeria that the few ports that were developed before 1906 were maintained. The advent of modern shipping came with it, the establishment of multinational corporations such as John Holt, the United African Company (UAC) and the Compagnie Francaise de l’Afrique Occidentale (CFAO), which added more boost to the development of shipping in Nigeria”.
He went on; “The Royal Niger Company (RNC) was also there. The presence of these firms added a boost to shipping operation in the country. The year 1906 was symbolic in the evolution of the Nigerian Ports Authority. That year, Lord Fredrick Lugard, created the Nigeria Marine. The Marine, as it was popularly known, emerged as the first initiative to bring some sanity into port administration in the country. It was charged with the responsibility for control and administration of the existing ports in Nigeria.
“The Marine dominated the scene for about 48 years before it metamorphosed into NPA. At least six overseas countries patronised Nigerian ports. From Britain was Elder Dempster Lines Limited (ED), now known as Hull Blyth; American West African Line (the United States), Compagnie Fabre et Fressinet (France) and Holland West Africa Liju of The Netherlands and allied companies, maintained regular traffic to Nigeria. And from Italy was the Navigatione Liberia Triesting Line. All these ocean liners operated cargo, mail and passenger services. For many Europe-bound Nigerians then, Elder Dempster was the regular choice. It was popular because of its fortnightly services between the United Kingdom and Nigeria. Between 1956 and 1958 Nigeria accounted for about 60 per cent of total shipment leaving the West Coast of Africa to European countries.
“By 1958, revenue loss incurred by non-participation of Nigeria in merchant shipping became so appalling that a motion was passed by the then Federal House of Representatives, urging government to take urgent steps to redress the situation”.
Ugochukwu informed: “Thus, on February 19, 1959, the then Minister of Transport, Hon. (Dr.) Raymond Amanze Njoku, announced to the House the incorporation of Nigerian National Shipping Line (NNSL). Dr. Njoku also prayed for the carriage rights to the new shipping line for the lifting of oil the country would be producing as oil reserves were discovered in commercial quantity in 1958 at Oloibiri in the present day Bayelsa State.
“It is worthy to note that development at the Federal House would not have been but for the pressure mounted on the minister by the foresighted Sir Louis Odumegwu Ojukwu, the pioneer chairman of the NNSL Board of Directors. Sir Ojukwu, as an astute businessman of global repute, was quick to foresee the need for the premier shipping line participating in lifting of Nigeria’s crude oil. So, to the satisfaction of all, a Bill titled, ‘Schedules of Sales of Nigerian Crude Oil’ and in Articles 6 and 19A of that draft legislation were enshrined in the following wordings:
“The seller (Nigeria) shall carry 50 per cent of her sales as when she has the wherewithal.
“Sadly, that dream was never realised, hence some school of thought blames it as part of the problems that stifled NNSL, leading to its eventual demise. However, the coming on board of NNSL signaled the beginning of shipping development in the country. With the NNSL that advertised the young emerging maritime nation by flying its flag around the globe, seafarers and others engaged in ancillary services were trained. As agricultural produce were moved from the hinterlands across the country to the ports of Port Harcourt and Lagos for shipment abroad for industrial use and facilitated by UAC, RNC, CFAO and others. In return, finished goods were shipped from Europe and America to Nigeria.
“That robust movement of agricultural produce and finished goods were galvanized through freight forwarding activities. Global recognition As shipping boomed in pre- and post-colonial eras, so also did freight forwarding or Clearing and Forwarding blossom. The NNSL had as its freight forwarding arm, the Palmline Agency, so also did other foreign shipping lines. Freight forwarding, as a business practice then, was more of a corporate enterprise than an individual thing. However, the importance of freight forwarding for global trade was recognised in Canada in 1948 with the establishment of the Canadian International Freight Forwarders Association (CIFFA).
CIFFA recognized that forwarding freight, whether by land, marine, rail or air requires coordination, regulation and best practices to ensure that goods flow in a timely and proficient manner across borders, overseas, and throughout the world.”
He continued; “Is Freight forwarding different from Customs Brokerage? In the true sense of the word, there is a difference between freight forwarding practice and license customs agency operation, which is otherwise known as Customs brokerage. While freight forwarding consists of strategic logistics planning and execution for international movement of goods, on behalf of shippers, a licensed customs agent or customs broker is more concerned with a client’s customs procedures. A customs clearing agent ensures compliance with relevant laws in order to expedite the import or export process. Customs brokerage is therefore a small fraction of the functions of a freight forwarder in the logistics chain supply management. In other words, a freight forwarder can also be a customs broker. In some climes, the freight forwarder engages for a fee, the services of customs broker to carry out that segment of his job, if he does not have a unit in his company performing such a function.
“In Nigeria, Customs brokerage practice is done on corporate level as the organidation has to be licensed by the Nigeria Customs Service (NCS). On the other hand, freight forwarding registration is on both individual and corporate levels. While NCS licenses customs brokers, it is the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) that regulates the latter and registers its practitioners.
“No wonder today, there are many young freight forwarders than licensed customs agents practicing in Nigerian ports ! Logistics is generally the detailed organisation and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations.
FIATA and freight forwarding
“The world body to which all freight forwarding organisations and groups are affiliated to is the International Federation of Freight Forwarders Associations (FIATA). It is a non-governmental, membership-based organisation representing freight forwarders in some 150 countries. Founded in Vienna, Austria, on 1926, FIATA owes its name to its French acronym, (Fédération Internationale des Associations de Transitaires et Assimilés) and is known as ‘the global voice of freight logistics’.
“FIATA’s membership is composed of 109 Association Members and more than 5,500 Individual Members, overall representing an industry of 40,000 freight forwarding and logistics firms worldwide.
FIATA is a reference source on international policies and regulations governing the freight forwarding and logistics industry. FIATA works at the international level to represent service providers who operate in trade logistics and supply chain management.
Through its FIATA documents and forms, congress, training and publications, it promotes trade facilitation and best practice among the freight forwarding community.
“Addressing the sectoral skill gap Just as it is happening in India, Nigeria still lacks the requisite manpower desired in the logistics chain management industry, especially with the coming on stream of the African Continental Free Trade Agreement (AfCFTA). The knowledge-gap thus needs to be bridged. Industry-relevant training, like the NAGAFF Academy, which can enable a professional to immediately begin working in the field, is the need of the hour. With the huge volume of trade worth over $3.0 million annually in the AfCFTA trade area, logistics sector today has immense demand for professionals with specialised skills.
“Such skills would be required in areas of data analysis, data management, project mapping, warehouse management systems, process conversion, among others. Ssuch skills necessitate a strong foundation in science and technology. At the same time, educational backgrounds with exposure to International Business, Commerce, Foreign Trade and Accounts, also have high relevance for the sector.”
The Principles of Freight Forwarding
“The principles of freight forwarding are premised on efficient and cost effective transfer of goods that are maintained in good condition throughout their travels. To accomplish this, freight forwarders become experts in managing the logistics necessary to ensure that goods arrive on time. Negotiating tariffs, customs regulations and being fluent in the requirements of shipping by land, sea, rail, and air. Freight forwarders manage the risks and benefits of shipping both nationally and internationally using the latest advances in information technology.
Forwarders carry out freight rate negotiations, container tracking, customs documentation and freight consolidation, among other tasks.
“Career outlook For a formally trained student include E-commerce, Warehousing, Shipping lines, Aviation (Cargo), Manufacturing, Cargo terminal operators, Port operators and ICDs, Road transport.
Freight Forwarding as a career
“Is Freight Forwarding a good career?
Once considered a low-skilled industry, logistics today is emerging as a sought-after sector for employment, due to the role of digitisation, the deployment of global best-practice and rising economic relevance. It is thus a great career opportunity for skilled professionals and freshers alike. Freight forwarding is a good career if one can devote his time, resources and training to it.
It has great potentials for those who can grow it for the future. In Nigeria, it has great potentials for those who can key-in
“The role of CRFFN in the freight forwarding profession. By Section 4 No. 16 of the CRFFN Act 2007, the Council is the sole regulator of the practice of freight forwarding in Nigeria. In a nutshell therefore, the role of the Council in freight forwarding includes but not limited to regulating and controlling the practice of freight forwarding, and promoting the highest standard of competence, practice and conduct among members of the profession. To become a freight forwarder, one has to be registered by CRFFN. Practitioners shall consist of individuals, corporate organisations in the private sector and other similarly qualified persons in the public and private sectors. These persons and companies must have principal places of business in Nigeria and MUST carry on the business of freight forwarding in the standard set by CRFFN as a means for achieving the CRFFN goals and aims.”
“Benefits of freight forwarding to a practitioner include gainful employment, profit making, exposure to the world, Self actualisation, beautiful bride, International connection
“Challenges facing Freight Forwarding in Nigeria are lack of proper regulation, policy somersault, lack of technology, presence of quacks, low literacy rate among practitioners, poor transport infrastructures, lack of multimodalism in the sector, high insecurity,
lack of good legislation to protect practitioners, political intrigues: appointment of non-professionals to head strategic agencies and corruption”.