Freight Forwarders Must Think Outside Containers!

Chief Lexzy Nwangwu is the president of African Federation of Freight Forwarders. In this interview he shares the vision of the association and tells us how freight forwarding could transform Nigeria’s economic fortunes.

Excerpt…

African Federation of Freight Forwarders what is the vision behind it and what is it all about?

African Federation of Freight Forwarders primarily came up after the introduction of the African Integrated Maritime (AIM) strategy. This AIM strategy was developed to address African maritime challenges. Some organizations came up, such as the African Ship Owners, African Federation of Freight Forwarders, African Women in Maritime, Association of African Maritime Arbitrators and others to work to make the AIM strategy succeed. The AIM strategy is all about developing the maritime potentials of Africa to create jobs for Africans and increase the income of the nations within the maritime region of Africa. That is the primary aim of setting up this African Federation of Freight Forwarders which was established on the 27th July 2015.

That was around the same time the African Ship Owners Association was established

It was actually on the same day and the elections were taking place at the same time although we were in different halls, the freight forwarders in a separate hall from shippers, the women in African maritime and other groups. That was how Temisan Omatseye emerged of African Ship Owners Association and I emerged president of the African Federation of Freight Forwarders.

 Where is your vice president from?

My vice-president is from Kenya.

Does the African Federation of Freight Forwarders have a constitution?

Our constitution will be derived from the African Union (AU). National bodies will have a constitution just as regional bodies will have theirs, but the continental one will have to be derived from the AU, but African Federation of Freight Forwarders is private driven. It is a body made for professionals.

As President of the African Federation of Freight Forwarders what is your vision for the freight forwarding profession in Africa and precisely in Nigeria?

My vision is to help change the mindset of Nigerians towards maritime and maritime practice. Everybody talks about freight forwarding in Nigeria they believe that freight forwarding is just about bringing cargo out of the ports but it is much more than that. In school, we were told that freight forwarding is all about movement of cargo from door to door. Where is that door? There is a warehouse, a factory, a shopping outlet; all these make up freight forwarding. For the movement we have the rail, sea, road, pipe (for liquid and gas), cables (for power) all these modes of transport come under freight forwarding. It is not just clearing a container from the ports- that is just a small part of the business.

My vision is to let Nigerians know that freight forwarding is broader. Everything about transport, everything about an economy revolves around freight forwarding. Nigerians must prepare themselves and be ready to key into it. The only way they can key into it is by undergoing trainings from recognized universities abroad to empower themselves even if it is a six months programme. When they come back, they will be more equipped to develop our maritime industry. They can even create maritime clusters via small industries around the maritime area and start a movement that wills spur others to begin to tap into the enormous benefits in the industry. That is our business and it is what I intend to do.

Talking about clusters are there specific industry units you are looking at?

Our maritime waters in Nigeria have a green plants usually found on the surface of the water that is nuisance here because it disturbs aqua-life and maritime activities. But that plant could be converted into something great such as converting it into energy, it can also be used to make perfumes and other things. All you need is to get machines to process the plant to various things and you will employ people as you rid our waters of the nuisance and make profit.

Another area is fishing; fishing is about movement and catching fishes. You don’t need to read agriculture to know how to catch fishes and the quality of fishes we have in the gulf of Guinea is rated the best in the world. Then you package them because the process of packing adds value and creates jobs. The next thing as a freight forwarder is to move them to where they are needed either in America, Asia or where ever. Freight forwarding is not just sitting down and waiting for containers to arrive, no! You create the jobs and you do the jobs.

Nigeria is now thinking about the railway system; definitely the coaches will be concessioned out. It is still the business of freight forwarders to go into the management of those coaches. Our people must start getting ready now and not when it is late. They should start undergoing trainings on how to manage railway coaches and be ready so that by the time the system takes off they key in. It is part of freight forwarding. I want to make the freight forwarders to start thinking differently, not the way they are thinking now. They think inside the container, but they have to start thinking outside the container and inside the environment.

Transportation is essential to freight forwarding and America is rich today because their transport system is great. All their industries are outside residential areas, yet they maintain the same prices across the nation. This is as a result of the freight forwarder. With the kind of structures I want to setup, in the next few years we should be able to start making input to the government. When they are preparing their budget we make input and advise them. Freight forwarding is not going to collect money from the government; we must help build the economy. If the economy grows we grow also, even as we help the government make money.

From the freight forwarders angle how we break the jinx of not owning vessels in Nigeria?

If we can get support from the government the freight forwarding sub-sector can fund the shipping sector. In Nigeria, people look down on freight forwarders because they think ship owners are superior to freight forwarders. Now let’s take a look at the budget of Nigeria, the government is saying 40% of the budget will be capital projects and 80% of the components for the project shall be imported into Nigeria – who clears it? Foreigners have been handling this since the creation of Nigeria. They call it “logistics” they manufacture in their country, give it to a freight forwarder in their country who will do the movement to the ship and handover to a foreign company in Nigeria who will conclude the job and deliver to the site. Nigerians are sleeping. If government cargos are given to indigenous freight forwarders for four consecutive years, freight forwarders would finance vessels. This is because all the money will be in Nigeria, banks will have money. At the moment Nigeria is a conduit pipe, foreigners come to get businesses, do it and take the money back to their countries and leave us dry. If these businesses are handled by Nigerians the money remains here and more Nigerians will be employed. It will also make it easier for indigenous companies to send their workers abroad for training to increase their mental capacity. Therefore, government must stop foreigners from handling project cargo which makes about 80% of total cargo throughput into the country.

If President Buhari is saying there is no money, he should stop the available one from being siphoned out and he should empower Nigerians. Ninety (90%) of our cargo through put is handled by foreigners and this doesn’t happen in other countries. As a foreigner in India where I studied I could not enter their ports, even in Conotou here as the president of African Federation of Freight Forwarders, I still cannot go and clear a cargo at their port it is not possible. In Nigeria foreigners run the ports and the Nigerian banks are not helping matters but I don’t blame them because they don’t have money and they do not understand what freight forwarders do. They see freight forwarding as business of criminals.

When Logistics in Freight Forwarding started in Japan, they called it “We Do It for You” until World Trade Organization (WTO) bought into it and changed it to Logistics in Freight Forwarding. They will come to the manufacturing company and take over the logistics aspect. They build a warehouse, get information on the raw materials the manufacturer needs, order it on your behalf and supply it in the quantities that you need. This helps you focus on manufacturing as you no longer bother about the store-keepers, sourcing raw materials, transport and others because the freight forwarder has taken over. Nigerian freight forwarders may not have the capacity to go into that area now because we do not have money, even if we have money we have not been trained to do that and that is the reason I keep saying that people that would join the African Federation of Freight Forwarders in Nigeria will have to study otherwise we won’t register you. If we register you in error, we will deregister you. It is not a junk thing, it is something serious. ANLCA and NAGAFF don’t know what is happening, although NAGAFF people are schooling to the extent of the teaching capacity available in the country, so they are better because their psyche is changing but ANLCA is zero, their minds are encapsulated in the container.

African Federation of Freight Forwarders is going to develop a class of freight forwarders in the country that would be thinking about how to develop the economy of Nigeria and not people who will be thinking of ganging up with shippers to bring in contraband items through the back door. We cannot register anyone with such records.

In the aviation sector, we are talking about having a national carrier after privatizing our national carrier during under former President Obansanjo’s administration. The maritime industry is also talking about national carriers, how do you see this?

If you watch the maritime sub-sector and the transport system in Nigeria, you will find that freight from Europe to Nigeria is very high because we do not have national carriers. If they are going to Kenya it is low because they have national carriers and if you increase the price the Kenyan airline will come and carry the goods or people. The only way the Nigerian government can control the price of freight either by sea or via air is by having its national carrier. If you don’t have yours, you can’t control it.

Remember what happened when the President banned some tanker vessels that carried our oil? There was a gang-up, an international conspiracy which is still on as they increased the cost of carrying our oil and we are handicapped because we don’t have vessels. If we had our vessels, they would not think of such a thing rather they would come and negotiate with us. It is very critical for Nigeria to own their shipping line and airline. We don’t need money to get these things. All the government needs to do is create the airline or shipping line and guarantee them. The guarantee can be taken to the manufacturers and they will produce for us. The guarantee could be in such a way that if one defaults in payment the plane would be seized until they pay. Foreign banks that can fund these things are so many. When it is a national matter you don’t need to have money.

Do we have what it takes to manage these vessels and airplanes, what happens when the government guarantees and the money couldn’t be paid because of bad management?

It is when I started travelling out that I realized that Nigeria has the highest number of students in world maritime universities studying different courses. Since former president Jonathan began sensitizing Nigerians on maritime, a lot of people have gone into maritime, transport and logistics studies. Those who were granted Amnesty are also scattered abroad during maritime and transport related courses. I am afraid when they come back there may be no jobs for them and new people may be discouraged from going if the first set return and there are no jobs.

We don’t build vessels and keep them. Let us place order and in three or four years when the vessels are ready our scholars will be back and we arrange for sea experience for them. Most of them are already on board foreign vessels, by the time ours ready they will come and take over. Honestly, Nigerians go to the best universities because most of them are sponsored by NIMASA, the south-south states and the Amnesty programme. Where are they going to work?

I believe these issues gave rise to the plans of setting up a maritime university and that idea must not be killed, although, I feel the location of the university is wrong. We don’t have sufficient manpower for the university and the lecturers will not be paid higher than lectures in other universities, so putting the university inside the creeks is not the best.  How do we get lecturers?

Most people who studied maritime related courses and have world accreditation and recognition are working in Lagos. They are the people we should use for the take off if the university will have world recognition. They may not be professors but they are professionals recognized by the world, hence the university should be around Lagos, Ogun or Ondo. If the main university will remain be in the creeks, let us have a part-time annex or the temporary site around Lagos axis so the world can see what is going on as it develops and by the time we have developed about 30-40 PhD holders we can get the NUC accreditation and move to the permanent site.

Maritime Academy of Nigeria, Oron, started as a nautical College at the same time the Regional Maritime University (RMU) in Ghana started too. They both started as colleges but RMU is recognized as a regional university and MAN Oron is still there today; Kenya already has a maritime university and their government has placed order for cruise vessels to integrate it into tourism. They say it is “freight forwarding in tourism” and Nigeria isn’t thinking of how to move the maritime sector forward.

How do you reconcile the management of the Kenyan airways which is a flagship enterprise for Kenyan government and it existed at the time the Nigeria airways was operating?

They manage their airline like any other organization they have. Kenyan airline started as East African airline, East African airline died but Kenyan airline continued and it has continued growing until today.

We like buying the IMF and World Bank ideas that the government cannot effectively run a business such as an airline, but we have the UAE airline, Iraqi airline, Kenyan airline, Abudabi airlines, all efficient government owned airlines. Why can’t we succeed like them?

We can run it. The problem is that the government does not have will to control and regulate.