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Rape in shipping: How Nigeria loses N63 billion to illegal shipping, terminal charges

Rape in shipping: How Nigeria loses N63 billion to illegal shipping, terminal charges

Terminal operation

·         Nigeria runs highest port charges in West, Central Africa

·         Freight Agents To Shut Ports
 
If this trend of economic rape in the shipping industry continues, the nation’s economy and port users will remain hopelessly in perpetual bondage for a long period, as Nigeria lost N63 billion to illegal shipping and terminal charges in 2013, with its attendant hyper inflationary trend in the economy, very pricky and sappy.
 
As a fall out of this, the maritime industry ended last week with drums of despair and war, emanating from the abodes of terminal operators, shipping companies on one hand and freight agents, Nigerian Shippers’ Council (NSC) on the other hand over the court order restraining NSC from enforcing the reduction and reversion of shipping and terminal charges to the 2009 approved charges by the Federal Government.
 
Justice Ibrahim Buba of High Court, Ikoyi, had on Friday 31st October, 2014 granted an order in favour of the Seaport Terminal Operators Association of Nigeria (STOAN), restraining NSC from implementing the reversion of storage charges and reduction of the shipping lines’ agency charges, among others, pending the determination of the substantive suit. He adjourned the matter to Monday 10th November, 2014 for further hearing.
 
Consequently, the National Association of Government Approved Freight Forwarders (NAGAFF) and the Association of Nigerian Licensed Customs Agents (ANLCA) in a joint press statement, last week, have concluded plans to withdraw their services from the ports, nationwide in protest against what they described as “subversive actions” while calling on the government to intervene “urgently to avoid total paralysis of the ports and its attendant effect on the economy”.
 
In the release signed by both National presidents of the associations, Prince Olayiwola Shittu of ANLCA and Dr. Eugene Nweke of NAGAFF, the associations stated, we “view with dismay series of actions being undertaken by the terminal operators, Standards Organization of Nigeria (SON), Nigeria Quarantine Services and the Shipping companies; action which may Jeopardize the existing operational keg of gun-powder soon to be ignited by selfish and greedy policies.
 
“The Shippers Council which is the commercial regulator in the industry is being arm-twisted and rendered impotent by operators who are hell-bent on thwarting its efforts at reducing cost of doing business in the Nigerian ports. We shall not fold our hands as illegal charges are being constantly foisted on hapless Nigerians”, it added.
 
They said that their members nationwide were being put on notice in respect of the “bare-faced robbery as an affront and a denial of our livelihood as more cargoes are being diverted daily to neighboring countries as a result of avoidable impunity”.
 
As a result, a meeting of the National Executive Council (NEC) members of NAGAFF and ANLCA had been convened for Wednesday, this week to move for withdrawal of services at the ports.
 
Meanwhile, investigations by MMS Plus Weekly have revealed that multinational shipping companies and terminal operators have over the years introduced illegal charges that have made Nigerian ports unattractive to port users, who prefer neighbouring countries ports.
 
Statistically, in 2013 Nigeria lost N32,043,501,200 to other countries as a result of illegal shipping line agency charges (SLAC). Our source pegged SLAC rate per TEU at N31,700 with the total container throughput estimated at 1,010,836 TEU.
 
Similarly, while a total of N28, 859, 367, 800 was lost to unilaterial review of progressive storage charges (PSC) by terminal operators in 2013, the sum of N2, 572, 090, 000 was equally lost as illegal container cleaning fee on imports in 2013. A breakdown of this shows that the multinational shipping firms charge N2, 500 cleaning fee per TEU, and the whopping sum is got when multiplied by the container throughput of N1, 010,836.
 
Findings further revealed that unclaimed container deposit in the custody of the shipping firms runs into several billions of naira as only proper audit would reveal the true position of the unrefunded deposit which has to be accounted for.
On the progressive storage charges, a total of N55, 899, 230, 800 was illegally realized by terminal operators in 2013; out of this, only N27, 039, 863, 000 realized was based on the governments approved rate.
 
By the NSC directive, free storage period at the port should ideally, move from three days to seven days.
 
Comparatively, while Nigeria gives three days free storage period at the port, Republic of Benin and Ghana give seven days and Cameroun, eleven days.
 
On the terminal handling charges (THC), Nigeria charges N52, 682 per 20 feet TEU and N87, 695 per 40 feet; while Benin Republic charges N24, 000 per 20 feet TEU and N48, 000 per 40 feet TEU.
 
Reacting to the face-off between the NSC and the shipping and terminal operators, the Deputy president-General (DPG), Senior Staff Association of Communication, Transport and Corporations (SSACTAC), Comrade Umar Jimoh said, “Shippers’ Council knows their onions, if the margin of increment in charges is normal, let’s consider it but if the profiteering is too much, it should be reviewed; and if not let it remain as it is. It is not the same price they sold goods in Nigeria in 2009 that they are still selling them today. That is why I said there was need to review the concession agreement generally and anyone that cannot comply with the new order should be chased out but we must consider the economy”

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