ACHIEVING AN EFFECTIVE PROFESSIONAL FREIGHT FORWARDING REGULATION IN NIGERIA

 By Dr. Eugene Nweke.

Introduction

Since the establishment of the Nigerian port Act of 1955 to date, the quest to achieve an effective professional freight forwarding regulation in Nigeria has been a tall order or a up-hill task.

  The Freight Forwarding Industry thrives on the premise of “master & servant” business engagements, with non cohesive, or firm regulatory  body, hence, the  pre and post enactment of the Act 16, 2007( Council For The Regulations Of Freight Forwarding Practice In Nigeria – CRFFN),   is characterized by  grossly untrained practitioners.

  The Nigeria Customs Service via its CEMA of 1954, only succeeded to license customs brokerage firms ( conferring on such owner of license the status of a licensed customs agents, which such individual by extension confers on his staffs),  most often not on the basis of inculcating any professional ethics or a certifiable robust training in such an individual, other than payable fees and laid down licensing  requirements.

   This system opened up widow for over familiarity/compromise as well  breeding connivance and malpractices.

    Most times efforts to evolve a professional restructuring  process are openly thwarted  or resisted or subtly stampeded by the practitioners themselves, on account of the fear to end or put a stop to familiar malpractices which had taken a centre stage in the Freight Forwarding sub- sector of the maritime industry.

   The absence of an effective regulatory (professional driven ) freight forwarding profession in the international trade security and Supply Chain in the maritime industry has continuously led to an annual revenue loss, estimated in hundreds of billions of naira via professional compromises and fraudulent practices.

   These fraudulent practices are  mostly perpetrated via systemic corruption categorized under inadequate regulatory frame works i.e absence of measured  standards and performances, non compliance & abuses ( in this regards  connivance, serial cartel-ship,  import racketeering, etc).

   To address this state of professional under development, now a reoccurring decimal in the international trade security and supply chain, this modest does not intend to review the overwhelming negative impacts of fraudulent practices/ systemic corruption on our economy, rather it intends to proffer a practical approaches at achieving an effective professionally driven freight forwarding regulation in the Nigeria maritime industry.

A. Understanding The Basic Knowledge And Skills Development As Approved For The Freight Forwarding Profession – FIATA Basic Training Templates:

  The Following Training Skills /Knowledge acquisitions determine the scopes and areas of speciality, certification and regulatory indicators /objectives in the freight forwarding profession:

i). AIRFREIGHT FORWARDING:

In the Airfreight forwarding, a practitioner is trained to have all round knowledge of current, practical, hands-on field applications or real life  practical experiences.

To this extend, the Practitioner shall be conversant and attained the following basic knowledge and skills:

a). The roles of government agencies and associations in the Industry.

b). The manuals and guidelines for different types of cargo, including livestock, dangerous goods and perishables.

c). The functions of airlines ground handling agents.

d). The free trade zones and their associated activities, and cross docking(consolidation, break-bul, mixing).

e). The types of aircraft, containers and materials handling equipment.

f). The import/export declarations and prohibited goods.

g). The preparation of air waybills and calculation of freight rates.

h). The Internet and its facilitation of e-commerce.

I). The understanding of products classification and its applicable tariffs, for customs purposes.

j). The Calibration of payable taxes, levies, duties, penalties, etc.

k). And others.

ii). SEA-FREIGHT FORWARDING:

In the Sea freight forwarding, a practitioner is trained to have all round knowledge of current shipping and port operations, which are applicable to actual field setting or specific port operations.

 To this extend, the practitioner shall be conversant ad attained the following basic knowledge and skills:

a). The roles of carriers and ports , and how they have changed and evolved.

b). The different types of vessels, containers and cargo gears and their suitability for various types of cargo.

c). The Proper packing of cargo.

d). The Preparation of sea waybills and bills of lading.

e). The international  sea transport  conventions, including the Hague – Visby Rules.

f). The liabilities and responsibilities of shippers and carriers, and exemptions from penalties.

g). The major port of call around the world.

h). The understanding of goods classifications and applicable tariffs, for declaration purposes.

 i). The calibration of payable local taxes, levies, duties, etc

j). The post 9/11security measures a d their implications.

k). And others.

iii). MULTIMODAL TRANSPORT LOGISTICS/SPECIALITY :

In the MultiModal Transport Logistics/Forwarding, a Practitioner is trained to have all round knowledge of current practices, real life and actual field applications  for arranging transport for shipments.

 To this extend, the practitioner shall be trained, conversant, attained and poses the basic knowledge in the following skills:

a). The liability of the multimodal transport operators and it’s limits.

b). The combinations of transport modes( sea-air, air-road, piggyback, land-sea-land, among others).

c). The special transport operations( delivering power plants equipment, helicopters , household goods).

d). The insurance issues and excluded perils.

e). The thinking in alternatives – What happens when there is a strike or port congestions?.

f). Understanding the prevailing and applicable convention and regulations.

g). The documentation concerns( bill of lading , FIATA transport documents, air waybill, sea waybill).

h). The roles of international, national or regional multimodal transport agreements- Hire or charter agreements.

I). Calibrating haulage/logistics charges, fees, levies, commissions, etc in line with standards industry average and practices.

j). And others.

iv). SAFETY & SECURITY LOGISTICS /SPECIALTY.

In the Safety & Security Logistics-Specialty, a practitioner is trained to have to have all round knowledge of current issues on the supply chain safety & security, the practical steps and the must-get-it-right concept in the safety, security supply chain applications.

  To this extend, the practitioner shall be conversant with the basic knowledge on the  supply chain safety & security sign posts, understand the principles of terrorism and counter terrorism, identifications of  weapons of mass destructions, etc.

 Such basic knowledge and skill shall not be limited as follows:

a). The international, national and industry initiatives.

b). The personnel security and Pre -’employment screening .

c). The Documentation processing and procedural security.

d). The cargo and conveyance security.

e). The incident management and concerns.

f). The managing of investigational concerns.

g). The emergency situation management.

h). The security & safety education and training concerns.

i). And others.

v). PROCESS- DRIVEN WAREHOUSE OPERATIONS LOGISTICS- SPECIALITY.

In the process-driven warehouse operations logistics a Practitioner is trained to poses all round knowledge of current issues on “how to” manage ware house operations for someone’s  interest and the “key control” that must be considered and putting place for each process in the operation.

To this extend, the practitioner shall be conversant with the basics knowledge of the various process of a typical warehouse operation and to understand the “how to” and “key control” considerations in the process.

Such basic knowledge and skills shall include but not limited to the following:

a). How to document warehouse processes.

b). The detailed warehouse operations covering receiving, put away to storage, order picking, sorting and packing, releasing, replenishment, cycle counting and stock take.

c). The aspects of managing service failures.

d). The aspect of planning daily operations.

e). And others.

vi). WAREHOUSE PRACTICES SPECIALTY :

In warehouse practices specialty, Practitioner is trained to poses a current, all around knowledge, covering the warehouse workings, operational and management concerns, especially the challenges faced  by a warehouse manager.

To this extend, a practitioner shall be conversant with the basic tips and the “must-get-it-rights’,  how to maintain an up-to-date information on the broad range of incentives for logistics providers and experts,  a professional insights into the impact of Real Estate Investment Trust (REIT’s), responsive to emerging trends on the warehousing practices & scene.

 Such basic knowledge and skills includes but not limited to the following:

a). The warehouse management systems – inventory.

b). The act of keeping score on warehouse performance.

c). The warehouse safety and security.

d). The application of Automated Identification and Data Capture technologies

e). The Pricing and Costing warehouse services.

f). The importance of warehouse to third-party logistics providers.

g). The storage system configurations.

h). The key considerations in warehouse design and layout.

i). The warehouse signs and codes.

j). And others.

EFFECTIVE REGULATORY CONSIDERATIONS:

From the prevailing scenario in the industry, and with an insight to the above professional standard knowledge and skills acquisition as recommended by the FIATA, wherefore, to ensure an effective regulatory in the Freight Forwarding Profession, the following considerations is apt:

 1. Professional regulation should tilt towards Basic Training, Retraining, grading and Certification –

Note: Freight Forwarding Profession had existed in so many developing country without any form of professional training and  standard of practices. Nigeria falls into this category.

   Over 70% of practitioners joined the profession without a formal training, hence, the professional ethics is not inculcated in them, abinitio.  Such practitioners only learnt the professional under a by chance master and servant relationship. In the end, the servant graduates from the master and pass on his field skill to other servant and so it revolves.

    Over time, this practice was observed by the FIATA as a professional deficit that impedes  the socio- economic development of a Nation, hence, it recommends in its training requirements and  certification templates, 50% working experience and 50% Formal Training, in order to mitigate this impending challenges cut across developing economy.

2. Professional regulation should tilt towards developing and domesticating professional: @- ethics – codes of conducts;

@- categorizing by certification – areas of specialty  with uniform codes;

@- setting a mechanism to  measuring professional templates in relation to performance- KPI.

@-  setting a mechanism to promote transparency,  engendering competition and ensure the  uniformity of practices & compliance – discipline and sanctions.

  FIATA has set professional rules and standards guiding deferent aspects of the  Freight Forwarding practices – Forwarders Handbook & Manual; Standard Trading Conditions- a set of uniform contracts to be entered into when offered and accepting to render services to a shipper –  standards trading conditions, international trading documents, etc.

3. Professional regulation should tilt towards developing a minimum investment capital for a forwarding firms:

@- grading & categorization of both individual and forwarding firms – introducing minimum capital via bank or insurance bonds, this is different from registration and skill certification.

4. Professional regulation should tilt towards establishing a methodological pricing index for  professional fees charges, in line with the CPI.

 All the scope of Freight Forwarding operations , must establish a regulate-able fees, charges, commissions, etc giving a break down of its definable service components.

EVOLVING A TWENTY FIRST CENTURY FREIGHT FORWARDING PRACTICE.

<> The Concept of  Customers Satisfactions

<> The concept of Just-In-Time.

<> E-Commerce Application.

<> Door to Door Concept.

<> 3rd to7th Logistics Providers

<> High Net Worth & Networking.

<> Mergers, Consortium, Collaborations, Partnership, etc.

<> The Principle Of Out Sourcing

Dr Eugene Nweke

12th April,2015.