An Umpire and Drive for Ports Efficiency

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By Francis Ugwoke
The nation’s shipping industry is one of conflict of interests. There is the interest of government, the shipping service providers and the shippers, the owners of cargos. This scenario therefore presents a herculean task for the Nigerian Shippers Council (NSC) as an umpire, the ports economic regulator. The NSC is saddled with a wide range of statutory responsibilities that are aimed at achieving the ease of doing business at the ports. The challenges are indeed enormous considering the harsh operating environment. Among these challenges are getting the shipping service providers to play by the rules in terms of charges imposed on shippers and being on their toes to introduce the right cargo handling equipment to facilitate trade. The ports economic regulator also beams its searchlight on the freight forwarders, including the truck owners to ensure that their charges for moving containers out of the ports are affordable. The regulator is also to advise government and its agencies on their charges and fulfillment of their own side of the concession agreement, talking about the Nigerian Ports Authority (NPA).
Checking high charges
For the Council, the first step has been on checking illegal port charges and provision of infrastructure that will make the ports efficient. Having battled shipping companies and terminal operators to retrace their steps on illegal charges, the NSC is currently expected to negotiate out of court settlement on the case with service providers. This is about the fifth year of the case between the terminal operators, shipping companies and the NSC. The two had lost both in the Federal High Court, Appeal Court before heading to the Supreme Court. An out of court settlement is seen as a better option for the interest of the industry and the economy. The NSC had as part of the efforts to save shippers from undue payment of demurrage reached out to the terminal operators and shipping companies to extend their free demurrage days. Following this, the shipping companies have extended the demurrage free days from 5 to 10 days, while terminal operators have reviewed their three free days to 8 days.
On the international scene, the NSC is also tackling conference liners of ships and their agents on surcharges that have impacted negatively on importation. The Council had dragged the multinational agencies to the Global Shippers Forum (GSF) with the collaboration of the United African Shippers Council (UASC). It was to call to order conference liners who have been imposing all manner of surcharges on goods coming to the country. Some of the surcharges that have been identified as unacceptable in Nigerian ports include peak season surcharge (PSS); extra risk insurance (ERI)/carrier security fee (CSF) surcharge; congestion surcharge (CS); freight tax surcharge (FTS); operations cost recovery (OCR); low sulphur surcharge (LSS); B.A.F (bunker adjustment surcharge) and C.A.F. (currency adjustment surcharge). The NSC was recently part of the meeting in London where the issues of surcharge were discussed. With global concerns on the issue as demonstrated by the GSF in London, Nigeria was advised to host early next year a global forum where the issue of surcharges will be discussed and finally laid to rest. Expected at that meeting are multinational shipping agents, conference liners and other shippers. The forum is seen as an opportunity for Nigeria to bring to global limelight all issues of illegal surcharges by ship owners and their agents.
Equipment audit for ports efficiency
One thing that the federal government has laid emphasis on is to ensure that there is ease of doing business in the nation’s ports. To ensure that this is achieved, the NSC has been interfacing with the relevant stakeholders to ensure that the ships bringing cargos to the country enjoy good turnaround on their vessels. Similarly, the Council wants to ensure that importers and their clearing agents do not have to suffer unnecessary bottlenecks before they can clear their goods from the ports. For this to be realized the Council has been holding meetings with shipping companies, terminal operators and the Nigeria Customs Service (NCS) who have different roles to play to ensure that this happens. The Council had carried out equipment audit to ascertain that the terminal operators and shipping companies have the required up-to-date equipment to facilitate fast cargo handling at the ports.
Speaking on the issue, the Executive Secretary of the council, Barr. Hassan Bello said on the occasion of the commissioning of N3.6 billion mobile harbour cranes in Port Harcourt, Rivers State by West African Container Terminal (WACT) said this was to ensure efficiency in ports operation. Bello said having an efficient cargo handling operation saves a lot of costs and will bring more traffic to the ports.
Bello commended the terminals and shipping companies for believing in Nigerian economy and complying despite the challenges of infrastructure that they encounter.
He said, “I have had a very good and robust relationship with the terminals and my concern is about moderation of cost and efficiency. The Nigerian Shippers’ Council has been auditing the terminals, in Lagos, Warri, Port Harcourt, to see that we have efficiency because the more efficient we are, the more cargoes we have.
“Nigeria is a natural harbour because this is where population is but we have to be efficient and am happy that today, this terminal (WACT) is becoming one of the most efficient terminals we have in West Africa and this is gladdening the heart and all issue of concessioning to the port will be realized. We are not unaware of some challenges and infrastructure and operating conditions of shipping generally”
At another occasion when he met with the executives of the Nigerian Chambers of Shipping who paid him a working visit, Bello explained on why the equipment has become imperative. He said, “we want to know what they are doing, what is the turnaround time for the ships, the equipment they are using. We want to gauge their efficiency, we want to audit the terminals and assist the terminals in reaching their efficiency. The NSC has some neutrality in this, it is why we are best suited for this. We have neutrality, we have relative autonomy. We are working with the terminal operators to have standards; there are regional and international standards. We are doing this because the efficiency of the ports is important. Everything is competitive nowadays hence the need for our terminal to be competitive, you cannot decree Nigeria to be a hub in Africa, you create a hub”.
He explained further, “You create hub if you are efficient, you create a hub if the cost is reasonable, you create a hub if the processes and procedures are simplified, transparent and you have automation and technology driving your trade. We want to ensure competition at the terminals in the ports because competition drives efficiency and make us have choice and options. Competition is not only to drive efficiency it also affects others in the sense that when a terminal has all the provisions to give their customers options, others will want to do same so as not to be left out.”
Hope for Improved infrastructure
One of the assurances from the ports economic regulator is that infrastructural issues in the ports are being addressed by the government. Bello said,“ government is taking deliberate steps to ensure that these things are being done”. He enjoined the terminal operators and shipping companies to continue to invest in Nigeria, adding, “ because this country is on it way to greatness to bring in more investment.” He pointed out to the rehabilitation of roads leading to the seaports from Oshodi – Mile 2 and believes that once completed, it will improve movement of cargos out of the ports with an end to congestion and years of gridlock.
Dry Ports and Rail Links
To bring shipping nearer to the door steps of shippers, the NSC is also involved in dry port projects in the six geo-political zones of the country. It is expected that some of the Inland Dry Ports (IDPs) may be completed this year. The Kaduna IDP started operation January last year. Now, there is a rail link directly to the dry port. The idea of the IDPs is to make both export and import business easier for shippers. With the IDPs, importers and exporters do not have to come to Lagos or other seaports for shipment. Importers can just choose the IDP as port of destination where they can receive their goods when they travel to any part of the world for trade transaction. The same thing for exporters from any part of Nigeria who can stay in those IDPs to export their goods to any international port. It is envisaged that the dry ports will equally address the issue of gridlock that has been associated with Lagos ports. The Council assured that with the planned construction of IDP at the terminal end of the Lagos-Ibadan Standard gauge railway, this will help in reducing the gridlock. The dry port will serve shippers from the South West with rail links. The dry port which is being constructed at the cost of $134million will create 3000 direct jobs and over two million indirect jobs, Bello said. He also added during an inspection tour by the Minister of Transportation, Hon Rotimi Amaechi that the IDP is expected to be constructed in the next 18 months and will be technology driven to avoid the mistake made in the seaports.
Bello added, “Most of the land will be for industrial park and truck transit parks so that there won’t be congestion, but most importantly, the dry port will eliminate the perennial congestion at the seaports in Lagos and other places and we will like to move cargoes out of the port to hinterlands because port is not a storage place”.