By Dr. Eugene Nweke
This memo serves as a “Save Our Soul” emanating from the stable of a concern Freight Forwarder. It is a professional position paper and not an executive summary. A professional enlightenment memo aimed at aiding your legislative decision making processes with respect to the above subject under consideration-“The CRFFN Amendment Bill”.
The articulation of this memo was prompted, following the observed intrigues , manipulative tendencies and pecuniary interests, conversely exhibited during the last public hearing on the amendment bill for the Council for the Regulation of Freight Forwarding in Nigeria (-CRFFN), Act 16,2007, by both stakeholders and undefined interest groups. Equally, from findings, there is an ongoing efforts by the parliamentarians to carve out via legislative process two distinct areas of freight forwarding scope (areas of specialities) namely: ” Logistics Services” and “Warehousing Operations”, now having separate bills.
These proposed bills are presently receiving legislative attention in both chambers. As a Professional Freight Forwarder, also majoring in capacity building, consultancy services and advocacy, it becomes imperative, that, at this juncture the law makers has every need for further enlightenment, so as to have an In-depth understandings and critical happenings around the freight forwarding profession, for the sake of formulating and enacting good and unambiguous professional laws in the country.
It is pertinent, to state that, this modest shall subsequently go into archives, for the readability, digestion and references by the future generation of Freight Forwarders, where and when the obvious needs may arise. Wherefore, our actions and inaction of today may come to public scrutiny tomorrow.
May I therefore, crave your indulgence to amply expose and acquaint you with notable professional inclinations and concerns in the freight forwarding professions, even though the writing notations thus seems an epistle.
1b). Professional Description/Definitions:
Permit me to refer you to the definition of the term “Freight Forwarding” and “Freight Forwarder” to serve as second leg of an introductory note. According to FIATA Doc.CL04/06 of 29th October,2004, FIATA adopted an official description of Freight Forwarding and Logistics Services, as: “Freight Forwarding and Logistics Services means services of any kind relating to the carriage ( performed by single mode or multimodal transport means), consolidation, storage, handling, packing or distribution of the Goods as well as ancillary and advisory services in connection therewith, including but not limited to customs and fiscal matters, declaring the goods for official purposes, procuring insurance of the goods and collecting or procuring payment or documents relating to the goods..” “Freight Forwarding Services also include logistical services with modern information and communication technology in connection with carriage, handling or storage of the goods, and defacto total supply chain management. These services can be tailored to meet the flexible application of the services provided”..
Secondly, the DK Essential Managers , authored by Jihong Sanderson ( Executive Director at the Center for research on Chinese and American Strategic Cooperation, at Haas School of Business, UC Berkeley, USA), simplified these service by describing a Freight Forwarder as ; “a freight forwarder is the party who can provide vital services. His role is to combine less than full container sized shipments at origin (consolidating, packaging and handling obligations) and disburse the various shipments on arrival. He is an expert in cargo schedules and traffic management.
He deal directly with sea, air and overland carriers, and offer tracking and communications regarding the shipment. He undertakes the formalities of shipping, including customs clearance, export and import tax payments, shipping fee payments, trade documentation, insurance, plan cargo logistic, etc”
Thirdly, Section 30 dealing with interpretations for the purpose of the administration of the Council For The Regulations Of Freight Forwarding In Nigeria, Act 16, 2007, defines a Freight Forwarder to mean any person or company who arranges the carriage or movement of goods and associated formalities on behalf of an importer or exporter along the international boundaries of sea ports, cargo airports or land border stations” .
1c). Professional Explanations and Clarifications – A Preface:
Judging from the above descriptions and definitions it is appreciable to inform and stress further, that: The professional training of Freight forwarders, makes the Profession, though a critical and significant sector in the context of the international trade and security supply chain, its practices is such characterized with extensive and a seemingly open professional communicating terminologies between the practitioners and all the actors within the trade supply chains.
These capacity exceptionally earns the freight forwarder the status of “a go in between ” on behalf of his principal and other actors in the supply chain. Freight forwarders like in any other profession jealously guard their secrets. However, in the absent of a professional regulatory body, whose duty is to ascertaining whether what’ is considered professional secrets is actually a secrets or not, becomes an issue often likened to, as part of the long time business mystique.
In reality therefore; the “Does Macy’s tell Gimbel’s”(unregulated or unwritten governing laws, followed and maximize by business interests – individually or as a group or corporate), comes to mind. In the spirit of sustainable growth and development, the sector has not been accorded adequate attention in the time past, whereby the level of understanding and relationship that exist between the profession, professionals and the professionals in the strata thrives on enviable suspense.
In fact, deep suspicion exists between professionals and other related professionals, apathy and Limited knowledge driven relationship between the professions, professionals and the academic world. Another issue is operational disenchantment between the profession, professional and key regulatory agencies of the government and the government itself, shipping and port operators.
Aside from the industry healthy relationship that thrives between the profession, professionals and the Nigeria Shippers Council and the media, the question often asked by non-maritime operator remains why? The answer is not too far-fetched the port system thrives on a corrupt premise, where monetary interest, unstreamlined competitive functions, malpractices and heightened quest for materialism takes precedent.
The presence of non-professionally trained Freight forwarder is dreaded because of his practical professional experiences or informed background or vantage position, and most times not welcomed in certain operational discuss, hence, connivance ensues. Therefore, it suffices to say that, such relationship in this context is mostly premised on unprofessional subscriptions other than for personal interest and understandings, whereby, in the long run huge compromises deterring professional development at the detriment of the profession itself are obvious.
In an ideal professional settings , freight forwarders are supposedly discreet, honourable, trustable, intelligent and versatile professionals, but in our setting, due to the absence of an effective supervisory professional body to instil professional training, ethics and code of conducts, set standards of practices and control at the onset, whereby, to a higher degree, the reverse thus appears to be the case.
This does not mean that, there are no trustable, viable, versatile, intelligent, discreet, honorable practitioners then and now. There are but not in prominence. Freight forwarding profession is indeed a highly competitive profession and becoming more competitive by the day. With a regulatory body in place, its competitiveness will impact positively on the said domain of promoting a healthy inter industry relationship, for an overall impact to the maritime industry development and sustainability.
Government Interference in Regulations:
Freight Forwarding is truly a distinct profession, most time governments seems to understand it as a professions that embodies public utility, hence, the federal and state governments had made several attempts to regulate or control the Profession in the past.
This government perception is borne out of the consideration that part of the professional activities of the forwarders requires the aspects covering government’s business interest with respect to public records ( of security and safety concerns) which are continuously being monitored by the regulatory agencies of the government.
More so, the actions and inactions of the forwarders has indirect impact on the government’s policy obligations and realizations and indeed on the citizenry. Again, all over the world Freight forwarders are the custodians of both primary and secondary data’s and sources of useful information that by involvement may make or mar the totality of the Maritime industry development. Ignoring the forwarders in the scheme of sectoral reform is more else as ignoring a critical link in the maritime trade supply security chain, that has the capacity to weaken the remaining chains.
The strength and professional viability of the forwarders makes him a major contributor of industry energy required in strengthening of the entire maritime industry supply chain. It is not a claim but a reality.
Core Practitioners unwilling to Succumb to Government Arm twist, in the face unhealthy perceptions:
In this regards, regulating the freight forwarding profession has not been too convenient or easy for the government, as it had severally demonstrated its regulatory interest, but often times for professional considerations opt to deregulate the sectors ( the regulatory and control quest of the government has since persisted, hence, it’s incursion as seen in the proposed CRFFN amendment bill).
The forwarders knew and understands, that, as a globally regulated profession, government wish may change somewhat, but it will end up in a paradigm shift from one thing to another. As such, the only feasible and workable chances are the enthronement of a professional regulation on the premise of a streamlined ethical and professional code of conducts.
Most professionals in other fields perceives the freight forwarding as a strange and mysterious profession. Some others and even the general public owe such negative perception, on the reasons that , there are existing, inherent professionals deficiencies and delinquencies occasioned by the absent of a professional regulatory body, wherefore the professions is synonymous to the pubic terminology of “419” ( obtainable by trick). This is due to the life styles exhibited by most of the professionals themselves.
But unknown to the public, Freight forwarding is a discreet, timeous , intellectual, coordinative demanding, wealth evolving, service, customer satisfactory and trust driven profession and not a sudden money spinning profession as perceived by many. Without mincing words, Freight Forwarding is a global noble profession, with an international standard codes and ethics of practice. It is a honourable profession, notable in rendering essential trade logistics services with diligence, skill and expertise demanding, whereby, contributing meaningfully in the overall Gross Industry Performance (GIP), towards the maritime industry productivity and the growth of the nation’s economy.
An Unreconcilable Study of the Freight Forwarders Registers and the Bane of Regulations: Judging by the national survey conducted by the Joint Action Committee of Freight Forwarders -JACOFF in 2010, to ascertain the number of practicing individuals and firms in the country, using the Corporate affair Commission’-CAC’s registry, the Council For the Regulation of Freight Forwarding in Nigeria -CRFFN’s Register, Nigeria Port Authority- NPA’s Port Pass Issuance Register, Nigeria Customs License Issuance Lists, daily head counts per ports for two weeks ( including the border stations and international airports) and a comparative freight forwarding associations registry as it’s primary source of data.
The survey shows that, over 8, 700 freight forwarding firms has been documented by issuance of permit as far back 1960-2010, and 2105 irreconcilable or likened firms was as well pencilled down for a later reconciliation. While as individual forwarders documented within same period on a minimum of 60 individuals employable per firm stood at 522, 000:( practicing individuals identified with a firm) and 285, 000 represented practicing individual unlinked with practicing firm. Surprisingly, from the last updated publication by the Council for the Regulation of Freight Forwarders in Nigeria, the Register (2014) shows that, less than 500 firms has meet registration requirements of the council, whiles as out of the over five thousand that visited and uploaded names on the portal, only less than 2000 individuals made the published register.
Though it was observed that most firms has gone bankrupt and so many others where revoked by the concerned government agencies owing to operational and policies breaches, notwithstanding this is a sign of unwillingness by the practitioners to subject themselves to regulations and wind of change , but insistence on status quo ante. Herein, lies the major problem of professional regulations in Freight Forwarding. It is on this premise, that, a professional regulator like ours, requires government midwifing to stability, but not to ambush it by arm twisting the professional regulatory obligations from the practitioners.
A Brief Historical Background of Freight Forwarding Practice In Nigeria: This memo will be incomplete, without detailing the history of freight forwarding in Nigeria. On this note, May I therefore, solicit for your understanding to summarize here, in one hand the history of freight forwarding practice in Nigeria, in the other hand, to underscore reasons why freight forwarding practice remains an old global profession of repute.
Generally speaking, the History of Freight Forwarding practices is as old as the biblical era. It is noted that, at the creation era, Eve having entered into a bargain with the serpent at an originating source, freighted fruits to Adam for the purpose of consumption at the designated (residential) part in the garden of eden (connoting the term “freight from and forwarding unto”).This was to be followed, by ship building, loading on board, warehousing and shipment activities by Noah’ and his family, having taken ample time to construct (via divine specifications) the world largest ships that existed during his era, known as “Noah’s Ark”.
Relying on the available historical documented notes and the hindsight (accounts) of the follows authors:
1). KBC Onwubiko – “The West Africa Contemporary History”; 2). Michael Crowder – “A History of West Africa Under a Colonial Rule”; 3). Andrew Rowell, James Marriott and Lorne Stockman – “The Next Gulf”; 4). Michael Peel ” A Swamp full of dollars”.
Summarily, it can be said, that, the history of freight forwarding practice in Nigeria was dated back based on the notable international trading activities in the Seventeenth, Eighteenth and early Nineteenth Century. In the South, the international sea trading activities involving the local people of Brass (producers of palm kernel oil)and Akassa (consolidating, warehousing, exporting agents), then and their international trading partners, the British and Portuguese (1886-1895), is apt.
In the North, the Trans Sahara Trade also thrived within same period, cutting across Mali -Timbuktu -Niger- Maladi – Nigeria- Sokoto, etc. The activities of middle men across various oasis (interchange and with holding points) in the Trans- Sahara routes were mostly dominated by notable noble “go in betweens” referred to as middlemen, understanding the dynamics of international trades, providing trustable storage agency, value added services, interpretative obligations in the trans sahara -supply chain.
The Establishment of FIATA: With the establishment of the International Federation of Freight and Transport Association -FIATA , in 1926 to regulate and set standards of practice in the global freight forwarding profession, this typically ushered in a new order. By the FIATA established laws and professional practices, it can only admits National Federation Associations from each willing and intending Country.
Nigeria Registration Derailed Longer Due To Supremacy Tussles Amongst The Exiting Association: In Nigeria then, the existing Freight Forwarding Associations failed to reach a common agreement that would have necessitated the emergence of a National Federating Association, due to supremacy tussles amongst them, unfortunately most of the association does not have a proper grasp of the profession itself. At different instances, attempts was made by various groups (Associations) to register Nigeria into FIATA, each process was greeted and trailed by series of petitions and blackmails by the other Associations.
For emphasis, three key Associations were on the path of unending rivalry or supremacy tussle, namely:
a). The Association of Nigeria Licensed Customs Agents (ANLCA) – Positioned and Maintaining its stands as the oldest practitioners association, founded in 1954, but, failed to offer the required leadership, due to the absent of a regulatory guide. b). The National Council of Managing Directors of Customs Licensed Agents (NCMDLCA)- This was to serve as an intervening force, following the convergence of the Managing Directors of Customs license owners to protest the revocation of Customs licenses by the then administration of General Sani Abacha in early nineties. There after, it maintained its interventionist posture.; c). The National Association of Government Approved Freight Forwarders (NAGAFF)- The Association emerged with a cerebral and positive advocacy drive, with a strong canvass and vocal for the enthronement and sustainability of professionalism in freight forwarding practice. NAGAFF with Freight Forwarding Nomenclature, indeed changed the professional climate, its veritable roles and involvement in the articulation and sponsorship of the bill for the establishment of a council for the regulation of freight forwarding in Nigeria, was the height point of its advocacy obligations.
These exploits notwithstanding, it is also important to note, that, another Association (though a small group ) known as the National Association of Freight Forwarding Agents and Consolidators (NAFFAC) were exiting only at the airport. In the same vein , the Nigeria Institute of Freight Forwarders(NIFF), Freight Forwarders Academy of Nigeria (FFAN) were the major, among the training and certifying institutes, that also played prominent roles in the quest for a professional regulatory council.
Association of Registered Freight Forwarders -AREFF is the fifth and lastly accredited association as approved by the Governing Board of CRFFN. The supremacy tussle between these thro’s is not on professional basis, but based on ego and group seeking, whereas, the ANLCA believes that, the founders of the other association are mere ‘break away’ officers from its fold, hence, they deployed their resources and contacts ( intimidation wand) towards ensuring that, these associations are not accorded recognition and relevance in the industry. Though it tried, but failed to sustain it.
The Emergence of JACOFF And Its Ban:
In the year, 2010 the urgency for the harmonization of operational advocacy activities became increasingly necessary , hence, a town hall meeting was initiated by the Leadership of ANLCA and NAGAFF in collaboration with other existing Associations irrespective of their membership strength notwithstanding. This coming together gave birth to a new body, known as the :”THE JOINT ACTION COMMITTEE OF FREIGHT FORWARDERS – JACOFF”.
JACOFF became a unifying factor and the mouth piece of the Freight Forwarders, showing leadership and professional directions, while complementing the activities of the CRFFN.
JACOFF was short lived following an orchestrated blackmails, sponsored incitements and syndicated press attacks by proponents status quo ante, who paraded themselves as industry gladiators. Subsequently, the HMOT in consultation with the governing board of the CRFFN directed the Council Registrar to Ban JACOFF in 2011, more so, that three out of the five JACOFF leadership were appointed as the Ministerial Representatives in the governing Council.
The Return of Relative Peace and TeamWork:
The reality, being that, today the said Associations are co-existing side by side amongst themselves. Notably, some other Associations had emerged within this same period , maintaining their respective nomenclature.
Suffice, to reinstate that, though supremacy tussle and internal wrangling still exits , but not on a broader picture or at the detriment of the profession. Over time, the leadership of the various Associations now understand, appreciates and respect the relevance of the cross fertilization of professional ideas, team work and unity of purpose in a professional settings and engagements.
Background To The Official Enrollment of Nigeria Freight Forwarders Amongst The Comity of Freight Forwarding Nations
The Making: In the year 2005, FIATA deems the Nigeria International Trading Environment as key to its organizational objectives within the context of African Continent and Regional agreements and conferences, as such, in its executive meeting considered the request /invitation for an on the spot assessment and courtesy visitation by one of the Association, resolved to visit Nigeria Freight Forwarding Sector for the very first time.
This Visitation was undertaken by Mr Isa Baluchi (then Secretary of FIATA). His visitation was greeted again with serious rivalries and clamouring, as was exhibited by the Associations, hence, the resolve of the visiting secretary to seek audience with the HMOT, then Chief Ojo Maduekwe of blessed memories. During and after the meeting, of a crucial consideration was the recorded Nigeria international trade volumes and the population forecast of forwarders advantage her as strategic and important to FIATA – hence its global quest for effective international networking objectives.
Therefore, the urgency to admit Nigeria into the comity of global Freight Forwarding Nation can not be over emphasis as such it prevailed on government for its intervention and support to unite the divided Freight Forwarding Associations ( bringing them into one acceptable national or central body ) so as to fast-track the Nigeria registration and integration processes into the comity of freight forwarding nations. This solicitation was the hallmark of the FIATA Secretary visit to Nigeria. It was on this premise that a convergence of some stakeholder took place in the following year. Subsequently, the legislators were approached with a professional drafted bill for a legislative intervention. Five years after, the secretary visitation, Nigeria formalized it’s registration and membership in the year 2010, with the Hon. Minister of Transport leading the delegation, alongside some of the regulatory governing council members, at the FIATA Regional Conference meeting held in Hong Kong.
Prior to the enactment of Act 16,,2007, like noted earlier, effective Regulation was seriously lacking in the Nigeria Freight Forwarding profession, which likened her to “an old profession, potentially vibrant, muscular and vigorous, failing its oats and straining to grow due to a combination of factors”. Indeed, reasonable achievement can be said to have been recorded under an unregulated regime, though mostly of selfish advancement and unsystematic integrations at the detriment of professional advancement and national development.
This is against the background that, what was obtainable in the system is: “learn it on the job and pass it on the job” without professional ethics. A kind of master and servant business relationship, making it a traditional professional qualification and graduation process not known in any other profession. Professional practices were sacrificed at the altar of systemic conspiracies, impunity, corrupt and fraudulent practices and unstructured administrative processes and procedures. Where professionalism, expertise and affiliations was reduced to a mere import racketeerings, series of cartel and cables thrived, even cultism celebrating themselves as trumped up monopolist, kingpins and untouchable revenue invaders with impunity.
It is in the strength of the above prevailed circumstances that, prompted the need for a change, hence, the clustering and convergence of some positive minded practitioners in collusion with some critical heads of the government agencies ( for a particular mention, the Nigeria Shippers Council -NSC, the Nigeria Port Authority -NPA and the Nigeria Maritime Administration and Safety Agency – NIMASA).
Having identified, that, the Nigeria Freight Forwarding Industry is not recognized among the comity of Freight Forwarding Nations, hence, its non-registration and participation’s in the global activities of the international regulations, by the umbrella regulatory body for Freight Forwarding Professions across the globe, known as International Federation of Freight and Transport Association -FIATA .
The consequence effects of non-integrating and participatory with global professional players, promotes retard of professional exchange of expertise and the continuous short changing and surrendering of our trade component in the hands of foreign nationals and firms via the domination and monopolization of professional space.
On this premise, the collusion resultantly resolved, taking a common position, as follows: ” to Usher and Integrate Professionalism in the Freight Forwarding profession via a Regulatory Council “, hence the articulation and submission of a bill for the establishment of Council for the Regulation of Freight Forwarding In Nigeria” for legislative attention and process in 2005/2006 at the National Assembly.
In furtherance to the advancement of this course, with respect to the on going institutional and sectoral reforms policy of the government within same period, it bought into and embraced the proposed bill, with the aim of ensuring a holistic maritime sector reform (inclusive of the freight forwarding sub sector of the economy).
Therefore, judging from the administrative permutations of the government through her respective agencies, the canvassed proposed bill becomes a veritable platform and a tool to effecting and achieving institutional and sectoral reform in the freight forwarding profession. In the wisdom of the Legislators, their final legislative processes adopted both the Executives and Practitioners into the governing board of the CRFFN, whereby introduced a regulatory council model with a refined correlation, having a midas public private partnership -PPP concept, as reflected in the constitution of the governing council and now as provided in the Act 16, 2007.
The reality of this adopted concept, was also driven towards giving credence to the government policy thrust, on its quest to deregulate ( less government regulation) the maritime sector, which hitherto thrives on a heightened bureaucracies and bottleneck, hence, the port concession exercise of 2006. The rest is now history.
Internal Considerations Pursuance To The Enactment:
Some of the critical debates canvassed and issues put forward for effective considerations and reconciliations at the technical session following the senate public hearing, in 2006, on the bill for the establishment of a Council For the Regulation of Freight Forwarding in Nigeria (CRFFN) now Act 16,2007, includes and not limited to the following:
Government reasoning and position upholding that; As far as the professional activities of the Freight Forwarding Services involves revenue , taxes, security and safety concerns , then the freight forwarders regulatory council (CRFFN) is a quasi public institution.
Regulation of freight forwarding with its distinct nature may sometime work across purposes, where by the practitioners and their clients bears the blunt. Therefore, it behoves on the technical session, to consider as follows: i). What are the existing Acts and provisions that is likely to cause abuse?; ii). Which of the existing laws impacts on the Freight Forwarding industry?; iii). What are the basis for clarifications and constant professional involvement of such supposedly umpire to implement those laws in relative terms?; iv). Who should be in charge of regulating the Freight Forwarding profession, is it the government or practitioners or both?; v). This question becomes pertinent, because executive interest some times over rules the legislatives objective of an Act, thereby causing complications.
In some instances, the use of administrative circulars to undermine an enabling provisions of an Act, remains worrisome.
Crystallizing for consideration purposes , the thriving problems and abuses inherent in an unregulated freight forwarding profession and its given environment.