Engr. Adebayo St. Peters is a member of the Nigeria Shipowners Association (NISA); in this week’s edition of Shippers’ Guide, he educates you on what shipping actually means and what it takes to dabble into shipping business. He does not fail to tell you about the climatic conditions necessary for sailing a ship and many more interesting shipping stories you need to know. Enjoy the reading:
What is shipping?
Shipping is an aspect of transportation, that is water transport and transportation is the movement of goods and humans from one point to another while shipping is the movement of goods and humans on water or at sea
What are the requirements one needs to meet before going into shipping business?
For someone to go into shipping, shipping has different areas but my type of shipping is different from the other types of shipping. What I do is the transportation of petroleum products from one point to another the other man may be into shipping also but maybe into the importation of products from one country to another so it depends on the area of shipping. While I may need the capital I may also need some skills, the other man needs some skills also but the capital needed may not be the same.
What are the general requirements?
For my own kind of shipping, I will need the skill and the capital to acquire a vessel or by the provision of the Cabotage Act, I may not necessarily need to acquire one but I may need to have one in form of charter , we have different types of charter as provided by the Cabotage like the time charter, the bear boat charter but if I must claim the vessel as mine here in Nigeria, I must hire the vessel on bear boat for a minimum of 60 months which is 5years as provided by the law which means the owner of the vessel is likely to be a foreigner and we have an agreement, I will hire the vessel bring the vessel into Nigeria, register to carry the Nigeria flag then it becomes mine for the period of that hire. Then even as I have that, I will need funds and expertise also then the contact, that is, my clients products from this man and to that man and so on. If you look at it from the face of it that is what you will need but it is not just only about that but at least you will need those fundamental things. You need the vessel, the expertise and the customers.
Is there any prerequisite training for someone to go into shipping?
Like I said, it depends on the aspect of shipping but for a very long time ago there was no institution in Nigeria that trains anyone in shipping, I know because from my background I came from academic I was a lecturer and I think I was one of those that are privileged to have formal training in shipping here in one of the Nigerian universities before going abroad but now you have institutions that train people in that aspect that award degrees in shipping and maritime, I did Maritime Management and Administration and I also have maritime law and policies that is outside though. But here you have shipping you have freight forwarding and other different aspects of training in shipping.
How favourable is the economic climate for shipping?
Just like every other sector of the economy, there are challenges but I must tell you this industry is basically about policies and it is a global business and we are seriously challenged. A ship owner in Nigeria may not be able to favourably compete with foreign counterparts for several obvious reasons which includes financing, that is, finances available to you to be able to acquire the kind of vessels that your international counterparts will also present, we don’t have the wherewithal to that extent to compete while I go out to source for funds on individual basis and individual recognition and you approach the banks or somebody you need to approach on one on one, you have you counterparts abroad who have the funds available in the system because it is for the system it is being designated to them and they use it for the system so they are able to procure equipments that are required according to law and according to specification and they are able to go into class, it costs a lot of money and it is one of the major reasons why we are relieved because the single hull is being allowed by NIMASA to operate for additional years and not everybody understands what single hull is about, it is an equipment that has been declared obsolete, If it is not extended which means if it declared obsolete you must bring in an additional one. It is like you have a 2008 model of Toyota and I want to hire a vessel, the government says 2008 model is phased out you have the money and business to give me but you are saying that it is 2011 model of vessel that is recognized and prescribed by the government and yours is 2008 therefore, I will not allow your vessel because it does not have the required machinery on board.
That is why we can’t be so happy that it has been extended that I want to do business with the foreign vessel which is coming from outside is going to stay there and I am going alongside the vessel to take the product, you are at liberty to say that I don’t want this vessel to come near my vessel because, it is like when you see man who has epilepsy and somebody tells you don’t worry about the epilepsy let him come, or the man says that as the umpire in this game this man is recognized, but I own my vessel and the man the umpire says is recognized, it is up to me to accept to do business with that man or not, so if the man is coming, I may instruct my vessel from the office not to do business with that man, don’t allow his vessel to come alongside and if asked on what ground the man will say on this ground because in his own country, they have the funds and they have renewed all their vessels to comply so they are coming with the vessel that is only accepted by my own government, so I cannot go to court, while NIMASA cannot assist me is a major challenge.
In a situation where all funds are available and all the technicalities are there what shipping business to the owner is?
I must tell you, if have the finances and you have the business contact, the prestige and what you think of a ship owner in what that person is. A ship owner is not like a bus or trailer owner, I am talking about a ship owner, a thousand metric tonnes of vessel will cost between 4 to 5 million dollars and that multiplied by the present naira rate, to be conservative N205.00 that is N5million multiplies by N205 which equals N1.1b. If you do one business or two you know what your profit will look like but the case is not so here, a ship owner with everything behind him, the finances the technicalities and the business contact that man in a prosperous man.
Like how much can a ship generate monthly?
It depends on the aspect of the shipping business you are into and the vessel. If for instance I have a vessel of like 10 to 11 thousand tones and I have to do business of $12,000 per day all imputs covered you can go ahead and calculate that for a month.
Can you explain to us what black, brown and blue waters mean?
The brown water is the inland water, the water is categorized. The brown water is the shallow water; you go from shore to sea. When you are going from shore, the inland water area is the brown water, the deeper you move, you into the blue water, so by the blue water is deeper than the brown water, the brown water is when you are moving from the shore, as you move towards a particular point at sea, the water will change, you will see that back this way is brown and the other way is blue.