NSC: Dangling Axe Against Illegal Charges
By Francis Ugwoke
As the ports economic regulator, the Nigerian Shippers’ Council (NSC) has been under intense pressure to allow a review of the shipping charges being collected at the nation’s ports. The multinational shipping lines have maintained intense lobby to have their charges increased. In the past, it would simply be a different ballgame, the shipping service providers would just outrightly raise the charges without notice. This was the case before and after the Council was formally accorded the power of port economic regulation. Specifically, in 2014, the shipping service providers had dragged the Council to court when it suspended some charges, particularly shipping line agency charge (SLAC) imposed by the service providers. In December of 2014, the Council won the case as the Federal High Court in Lagos declared SLAC illegal. A Federal High Court in Lagos, presided over by Justice Ibrahim Buba, had ordered shipping lines and terminal operators to refund over N1trillion. The service providers responded by appealing against the case, but lost. They then proceeded to the Supreme Court but later sought to settle out of court several years later. How this was settled leaves much to be desired. However, since then, most shipping lines now humbly approach the Council for negotiation before increasing their charges.
In the incident of few weeks ago, the Council had to intervene to suspend shipping charges it had given a nod to the shipping lines to raise. The Council made a u-turn as it felt that enough consultation was not reached between the shipping service providers and consumers of the service. This was more so following a protest by some members of the Association of Customs Licensed Agents (ANLCA). The Council reacted to the protest swiftly by giving a directive to the shipping lines to suspend the new tariff regime it had introduced. Stakeholders had applauded the Council for taking this route in good time. The Council had raised an axe, so to say, ready to hit target, against those who dared flout its orders.
In a press statement issued by the Head of Public Relations of the Council, Rebecca Adamu, the Council directed all the shipping lines, shipping agents and terminals to suspend and refrain from implementing any review or upward adjustment of charges until full engagement with stakeholders.
The Council noted that the approval granted shipping companies was in accordance with its statutory mandate as an economic regulator, explaining that tariff reviews were carried out in a transparent , structured and well defined regulatory process.
The ports economic regulator added that the processes of the approval included detailed technical and consultative engagement with affected service providers, in a bid to examine the “cost drivers, operational realities, investment obligations, and regulatory compliance”.
However, the Council explained that the engagements did not constitute automatic approvals, observing, that these informed a broader evaluative process.
According to the statement, “Final determinations were reached only after rigorous internal, technical, and financial assessments guided by empirical evidence, regulatory benchmarks, and prevailing economic conditions.
“Notwithstanding, Shipping companies, agents, and terminal operators are hereby directed to suspend any intended review of charges until they have duly consulted and engaged their stakeholders. As the Port Economic Regulator, the Nigerian Shippers’ Council will wield the big stick against any port service providers disrupting port operations.
“The Council emphasised that transparency, fairness, and stakeholder participation are fundamental principles underpinning port economic regulation in Nigeria”.
The Executive Secretary of the Council, Dr. Pius Akutah sounded a note of warning that as the ports economic regulator, the Council has the power to apply appropriate sanctions against defaulting operators.
He made it clear that this included enforcement measures covered under relevant regulatory frameworks.
The statement added, “He (Akutah) encourages constructive engagement, dialogue, and compliance. However, any service provider that proceeds with charge reviews without stakeholders’ engagement should be prepared to face decisive regulatory action.
”He assured that the Nigerian Shippers’ Council remains committed to protecting the interests of port users, promoting fair competition, and ensuring a balanced and predictable business environment within the Nigerian maritime industry”.
Industry stakeholders believe that in future, every avenue for negotiation with stakeholders should be exhausted before any upward review of new charges is approved and implemented.
Head of Research, Sea Empowerment and Research Center (SEREC). Dr. Eugene Nweke, argued that the shipping companies do not deserve what they have been asking for. He explained that this was because port and shipping charges now account for an estimated 30–40% of total landed cost for some imports. Nweke said that every 10% increase in logistics costs is conservatively associated with a 1.5–2% rise in consumer prices, particularly for food, pharmaceuticals, and industrial inputs. Acknowledging the action of the Council in suspending the charges, Nweke said unchecked “charges act as a hidden inflation tax, undermining national anti-inflation efforts”. He added, “when regulation fails, the economy pays.
When regulation is predictable, the economy gains. “Strengthening port charges governance is therefore not merely an industry issue, but a national economic imperative central to inflation control, trade competitiveness, and the success of the Marine and Blue Economy agenda”.
As the ports economic regulator, the Nigerian Shippers’ Council (NSC) has been under intense pressure to allow a review of the shipping charges being collected at the nation’s ports. The multinational shipping lines have maintained intense lobby to have their charges increased. In the past, it would simply be a different ballgame, the shipping service providers would just outrightly raise the charges without notice. This was the case before and after the Council was formally accorded the power of port economic regulation. Specifically, in 2014, the shipping service providers had dragged the Council to court when it suspended some charges, particularly shipping line agency charge (SLAC) imposed by the service providers. In December of 2014, the Council won the case as the Federal High Court in Lagos declared SLAC illegal. A Federal High Court in Lagos, presided over by Justice Ibrahim Buba, had ordered shipping lines and terminal operators to refund over N1trillion. The service providers responded by appealing against the case, but lost. They then proceeded to the Supreme Court but later sought to settle out of court several years later. How this was settled leaves much to be desired. However, since then, most shipping lines now humbly approach the Council for negotiation before increasing their charges.
In the incident of few weeks ago, the Council had to intervene to suspend shipping charges it had given a nod to the shipping lines to raise. The Council made a u-turn as it felt that enough consultation was not reached between the shipping service providers and consumers of the service. This was more so following a protest by some members of the Association of Customs Licensed Agents (ANLCA). The Council reacted to the protest swiftly by giving a directive to the shipping lines to suspend the new tariff regime it had introduced. Stakeholders had applauded the Council for taking this route in good time. The Council had raised an axe, so to say, ready to hit target, against those who dared flout its orders.
In a press statement issued by the Head of Public Relations of the Council, Rebecca Adamu, the Council directed all the shipping lines, shipping agents and terminals to suspend and refrain from implementing any review or upward adjustment of charges until full engagement with stakeholders.
The Council noted that the approval granted shipping companies was in accordance with its statutory mandate as an economic regulator, explaining that tariff reviews were carried out in a transparent , structured and well defined regulatory process.
The ports economic regulator added that the processes of the approval included detailed technical and consultative engagement with affected service providers, in a bid to examine the “cost drivers, operational realities, investment obligations, and regulatory compliance”.
However, the Council explained that the engagements did not constitute automatic approvals, observing, that these informed a broader evaluative process.
According to the statement, “Final determinations were reached only after rigorous internal, technical, and financial assessments guided by empirical evidence, regulatory benchmarks, and prevailing economic conditions.
“Notwithstanding, Shipping companies, agents, and terminal operators are hereby directed to suspend any intended review of charges until they have duly consulted and engaged their stakeholders. As the Port Economic Regulator, the Nigerian Shippers’ Council will wield the big stick against any port service providers disrupting port operations.
“The Council emphasised that transparency, fairness, and stakeholder participation are fundamental principles underpinning port economic regulation in Nigeria”.
The Executive Secretary of the Council, Dr. Pius Akutah sounded a note of warning that as the ports economic regulator, the Council has the power to apply appropriate sanctions against defaulting operators.
He made it clear that this included enforcement measures covered under relevant regulatory frameworks.
The statement added, “He (Akutah) encourages constructive engagement, dialogue, and compliance. However, any service provider that proceeds with charge reviews without stakeholders’ engagement should be prepared to face decisive regulatory action.
”He assured that the Nigerian Shippers’ Council remains committed to protecting the interests of port users, promoting fair competition, and ensuring a balanced and predictable business environment within the Nigerian maritime industry”.
Industry stakeholders believe that in future, every avenue for negotiation with stakeholders should be exhausted before any upward review of new charges is approved and implemented.
Head of Research, Sea Empowerment and Research Center (SEREC). Dr. Eugene Nweke, argued that the shipping companies do not deserve what they have been asking for. He explained that this was because port and shipping charges now account for an estimated 30–40% of total landed cost for some imports. Nweke said that every 10% increase in logistics costs is conservatively associated with a 1.5–2% rise in consumer prices, particularly for food, pharmaceuticals, and industrial inputs. Acknowledging the action of the Council in suspending the charges, Nweke said unchecked “charges act as a hidden inflation tax, undermining national anti-inflation efforts”. He added, “when regulation fails, the economy pays.
When regulation is predictable, the economy gains. “Strengthening port charges governance is therefore not merely an industry issue, but a national economic imperative central to inflation control, trade competitiveness, and the success of the Marine and Blue Economy agenda”.
About Post Author
