…say ‘we pay N4.38bn annually on demurrage’
·Blame yourselves, FG for delays – Terminal operators
Importers in the freight and forwarding sub-sector of the maritime sector in Nigeria have drawn the attention of the Federal Government to the way terminal operators and shipping lines allegedly delay the clearance of their containers at the Apapa port in Lagos, compelling them to pay demurrage worth N12 million daily. This makes about N4.38 billion annually.
Investigations by The Point revealed that while the owner of a 20-foot container was made to pay about N7, 000 as daily demurrage charge, the terminal operators also slammed a daily levy of N13, 000 on certain categories of cargoes and another N25, 000 on every refrigerated container.
Some of the aggrieved importers, who spoke with our correspondent in separate interviews, alleged that over 1,000 containers were delayed intentionally by both terminal operators and shipping lines on a daily basis. They averred that in most cases, some of the cargoes were delayed for weeks, not because the owners were not set to clear them but because the terminal operators claimed, either sincerely or otherwise, that there was no up-to-date infrastructure to fast-track the clearance of the cargoes.
“Yet we bear the brunt for no fault of ours,” Samuel Jide-Osarenren, one of the importers, lamented.
The Clearing Manager, Stelac Maritime Agency, Mr. Olasunkanmi Oguntunde, for instance, disclosed that importers in the maritime sector suffered huge losses in 2016 and were still suffering the same fate in 2017, as the terminal operators and shipping lines allegedly fleeced them, using unnecessary delays to stall the clearing of cargoes.
According to him, the poor state of the Nigerian economy in 2016 and early 2017, which was largely caused by economic meltdown and foreign exchange crisis, has not only created holes in the finances of the importers but made some of them go bankrupt.
He said, “As if that was not enough, the actions of the terminal operators are also frustrating us out of business. We end up spending N1.5million instead of N1million to clear goods from the port, because they lack basic tools to fast-track clearance of our cargoes, unlike their counterparts in Togo and Republic of Benin.
“We understand that the road is bad, but in most cases, cargoes are delayed for weeks because there are not enough computers to aid clearance. However, containers cleared by touts come out of the port without much delay, which means some people actually benefit from the development.”
Contrary to the directive of the Nigerian Shippers Council that some charges of terminal operators and shipping lines should be reduced, the Managing Director, Excellent Maritime Agency, Prince Ayo Adewunmi, alleged that the reversal of some of the charges, which was to take effect from November 3, 2014, had not been reviewed.
He explained that the progressive storage charge, free storage period, shipping line agency charge, container cleaning and maintenance fee, and container demurrage, had not also been touched.
Adewunmi said, “The Council had ordered an increase in the container storage period at the ports, from three days to seven days; and also directed shipping companies to reduce their charges, from N26, 500 to N23, 850 for a 20-ft container; and N48, 000 to N40, 000 for a 40-ft container. But these have not been implemented.
“The Council also directed shipping agencies to refund container deposits to importers and agents within 10 days after the return of the emptied containers. Today, they ensure your containers are not cleared within the days in order to forfeit the money. We had to pay more, which has really affected us. In most cases, we had to hike the charges on our cost of production and that means the consumers bear the cost.”
The Clearing Manager, Seal Logistics Nigeria limited, Mr. Jamiu Ogunsehinde, claimed to have also had a bitter experience with one of the shipping firms, CMA CGM Shipping Limited.
He said his client paid a sum of N400, 000 as container deposit to the shipping line for a 20-foot container that was meant to be delivered to the owner of the goods in Kaduna State.
According to him, the money was meant to be refunded after the client had returned the container to the shipping line. But to his client’s dismay, he got a debit alert that he had only N27,000 left in the deposit he made with the shipping line as N373,000 had been deducted for demurrage.
“I couldn’t believe my ears when my client called and threatened to sue me for fraud. The client told me that I must have connived with the shipping line to defraud him because the container was supposed to have been cleared within three days without accruing any charge. The shipping company deliberately capitalised on the bad roads to swindle our client and we have thus found that it is a deliberate act to cheat us,” he told The Point.
The Managing Director, Robel Automobile Limited, Mr. Ropo Akinboderin, explained that the advent of the hike in the tariff imposed on imported vehicles, from 20 per cent to 35 per cent in December 2015, had practically crippled his company’s operations as its businesses suffered a major setback.
He said, “The development has scared most of our clients from the port, as our clients now import cars from neighbouring countries like Republic of Benin, Togo, Ghana and Mali. In a way, the high cost of clearing goods in our ports is a blessing to other neighbouring countries.
“Government should see what could be done for the purpose of gaining back our cargoes from neighbouring countries. To an extent, the importation of cars into the country contributes its quota to the reduction of unemployment in the country.”
BLAME INCONSISTENT POLICIES – OPERATORS
However, the Seaports Terminal Operators Association of Nigeria has blamed the high cost of doing business at the ports on inconsistent government policies, improper documentation by port users and under-declaration by importers.
The Chairman, STOAN, Princess Vicky Haastrup, called for the harmonisation of ship inspection procedures by government agencies at the ports, in order to minimise vessel delays and reduce the cost of doing business.
To her, government’s inability to fix the access roads to the Apapa port also contributed to the delay witnessed by importers.
Also, Haastrup tasked importers and agents to embrace genuine declaration and support the Nigeria Customs Service to achieve success and fast-track cargo clearance on the platform of the Nigeria Trade Hub scheme.
“The time for trading blames by port users and port operators is over. It is important that all of us work together to drive efficiency at the ports. We must support the government to achieve its target of prompt cargo clearance and lower cost of operation. It is a herculean task but with unity of purpose, there is no limit to what we can achieve,” she said.
Haastrup added that most of the vessels bringing cargo into Nigeria were old, while their gears developed problems during discharge operation.
She added, “Under-declaration is also part of the reasons cargoes are delayed. A situation where an importer declares a container that weighs 60 tons as 50 tons and you, as terminal operator, deploy a 50-ton capacity equipment to lift a 60-ton container; what do you expect, if not cargo damage and
The Chief Executive officer, NSC, Alhaji Hassan Bello, however, said, “From now, we won’t allow any agency or operators to increase the cost of service without the consent of the NSC. There have been attempts to further raise charges, not only by the terminal operators, but also by some government agencies. Everyone knows now that you cannot increase cost without our
We understand that the road is bad, but in most cases, cargoes are delayed for weeks because there are not enough computers to aid clearance. However, containers cleared by touts come out of the port without much delay, which means some people actually benefit from the development
OPERATORS SHOULD NOT RELY ON GOVT ALONE – NASS
The Vice-Chairman, House of Representatives Committee on Ports, Harbours and Waterways, Hon. Muhammad Kabir Ajanah, said lawmakers would investigate the allegations as long as petitions were written to the committee.
“But away from that, the truth is, Nigerians overburden the government. They expect government to do everything for them, even when they still make huge profits from the ports and the overstretched infrastructure,” he
Ajanah recalled when he was in New York in the United States and was surprised that terminal operators were happily building bridges in the port, because they needed to increase the height of the bridge in order for their ships
“They may just seek permission from government; but they don’t wait for government to fund the infrastructure upgrade. Waiting for government to do everything for you is like living in a rented apartment and expecting that your landlord will come and clean your house. So, we need a law that will provide for terminal operators to contribute to making the ports more conducive for business. When government gave lease of terminals to the operators, there was an agreement for them to maintain and improve on the terminals,” he told The Point.