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COVID-19: Economic Threats At Nigerian Airports And Seaports

Appraising Shippers' Council Activities At Ports Under COVID-19

By Kenneth Jukpor

As the President Mohammadu Buharui relaxes the lockdown to allow some business operations commence, there are worrisome indications that crisis may ensue at the seaports and airports as a result of certain charges.

Accumulated storage charges and demurrages by terminal operators and shipping companies are major issues that could lead to pandemonium at the seaports after the COVID-19 pandemic is addressed, while airport operations may suffer similar fiscal problems.

Despite President Buhari’s directive that airport operations be shutdown completely to curb the spread of coronavirus in the country, normal operations at the cargo section of Lagos airport gives an indication that freight forwarders would be slammed colossal sums as demurrage after the lockdown.

MMS Plus investigations show that Nigerian Aviation Handling Company (NAHCO) Plc and Skyway Aviation Handling Company (SAHCO) have continued operations on cargoes that don’t classify as emergency or essential goods.

Meanwhile, some freight forwarders at Nigerian seaports embarked on strike on Thursday last week over the refusal of terminal operators and shipping companies to waive demurrage and storage charges in line with the directive of the Federal Government.

Recall that the Nigerian Ports Authority (NPA) directed all port terminals to suspend the collection of storage charges, highlighting the compensation terms for terminals as credit notes commensurate to the rental reliefs granted by the terminal operators to consignees within the free storage period.

Shipping companies were similarly directed to stop collection of demurrage charges by the Nigerian Shippers’ Council (NSC) unsurprisingly; several terminal operators and shipping companies have failed to comply.

After several outcries to the NPA, freight forwarders across the five major associations in the sector held a meeting with the Apapa port manager, Mrs. Olufunmilayo Olotu on Thursday last week, consequently, they decided to down tools as they stopped all freight forwarders from taking delivery of cargoes.

The Chairman of Apapa chapter of Association of Nigerian Licensed Customs Agents (ANLCA) Chief Dom Onyeka revealed this last week.

His words: “At the outbreak of the COVID-19 pandemic, NPA told us that storage and demurrage would be waved off, they called us to come out and start working despite the Coronavirus. Shipping companies and terminal operators are not acting on that waiver, we are now saying that we can no longer work except the directive is being implemented,  we have stopped the generation and writing of TDO for now and we have sensitized all our members to do same”

According to him, the meeting with the Apapa port manager was to enable the agents present all evidences and determine why terminal operators refused to comply with government instructions.

“We have downed tools at the port, but it was impromptu. Some freight forwarders have gone for examination, but we wouldn’t allow anyone to write TDO again. We have stopped agents from working. All the four associations are here, we are all together on this.We have tolerated it enough, we cannot continue to pay because we didn’t cause the pandemic” he said.

The response of terminal operators is more worrisome given the assurances that NPA would grant credit notes commensurate to the rental reliefs granted by the operators to consignees for the free storage period.

Port observers have also frowned at the disposition of terminal operators who have been quick to donate over N700million to the Federal Government as part of contribution to the fight against COVID-19 pandemic when they ignore the critical government directive that would have more economic impact on Nigerians.

Following the recent increase in the exchange rate from N326/$ to N361/$, Nigerian shippers have also posited that the post-COVID-19 era would usher in more fiscal pangs on Nigerians.

Lamenting that the increment violates economic decency, shippers under the aegis of Shippers Association Lagos State (SALS) pointed out that the exchange rate has been increased twice in the last six months.

The President of SALS, Rev. Jonathan Nicol stressed that the government’s panic due to global economic downturn shouldn’t become a fiscal burden on shippers and the entire citizens of the nation, even as he noted that the maritime sector is the only inlet available to generate revenue at the moment.

Nicol, however, posited that the sector has reached a stage for the declaration of emergency following the irrational actions of the government.

According to him, the increased exchange rate would induce shortage of cargoes over time, as it is already reflecting on industries, importers and shippers while exporters will have to source additional funds to clear their cargoes trapped at the ports due to the COVID-19 pandemic under the one month stay at home order of the Federal Government, yet all the goods in the ports now will attract the new rate.

“As it is, shippers join our colleagues in the Freight Forwarding trade that there is no palliative for Shippers. We do not think it is wise to continue in a trade that is not profitable. The aftermath of this action will induce, reduction of staff across the board in the sector. Running cost will increase. Industries will find it difficult to achieve their targets as projected”, Nicol said.

Speaking with our correspondent on the brewing economic challenges at the airports, the President of Africa Association of Professional Freight Forwarders and Logistics on Nigeria (APFFLON) Mr. Frank Ogunojemite said that President Mohammadu Buhari’s directive was clear as it indicated that all airport operations should be suspended.

The APFFLON boss expressed worry that the full blown operations at the Lagos airport may see the ground handling companies demand colossal figures as demurrage after the lockdown.

“Since President Buhari’s directive suspending airport operations, there hasn’t been another circular or statement directing airports to reopen. I assume that any activity at the airport would be essential but the volume of activities observed at NAHCO and SAHCO in the last three weeks is alarming”

“NAHCO and SAHCO have been operating as they usually do. In fact, the place is as busy as a market. Yet, we say there is a lockdown. I’m really disturbed by this development. There are lots of trailers loading consignments and there are no safety measures like hand sanitizers and provision for hand washing,” Ogunojemite lamented.

He maintained that the freight forwarders in the aviation sector have the impression that NAHCO and SAHCO aren’t working, hence they would kick against any extortion via demurrages for the period under the lockdown.

Meanwhile, in a recent emergency operational meeting organized by the Federal Airports Authority of Nigeria (FAAN) which had other government agencies and aviation handling companies at cargo terminal at MMA, all stakeholders agreed to adhere strictly to safety measures including social distancing, regular hand washing, use of sanitizers, among others.

At the meeting which took place at the MMA conference room to consider the most appropriate ways to conduct operations with consideration for public health and safety in view of the current challenges arising from the COVID- 19 pandemic, there were exhaustive discussions and interactions and some of the measures adopted include; “the Terminal shall be opened to a minimal number of staff of Agencies and Handling companies with proper identification at their normal operating hours. It shall be opened to Cargo/Freight Agents between 9am to 5pm. ”

The meeting which held before President Buhari declared the initial 14days lockdown in Lagos, also directed all ‘authorized occupants of vehicles except the driver are to compulsorily disembark for security check and access through the pedestrian gate where the Port Health Services officials shall carry out their Temperature reading”

When business activities resume fully at the airports and the seaports also hits optimal operations, the burden on port users may become so overbearing that a strike may ensue. The onus lies on the regulators and supervisory ministries to curb this impending disaster.

Perhaps, we can take a cue from the postulations by the Chairman, Nigerian Ports Consultative Council (PCC) Otunba Kunle Folarin who has called for the institution of a committee to handle the economic impact and activities in the post COVID-19 era.

This impendng crisis can be averted; but the planning and deliberations must start now, not later.

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