THE GENESIS OF SHIPPERS’ PROBLEMS

THE CAUSES OF SHIPPERS CHALLENGES
Rev. Jonathan Nicol

Rev. Jonathan Nicol is the President, Shippers’ Association of Lagos State (ASLA). In this interview with our correspondent, he bares his mind on the activities of the maritime industry in the year 2014, the prospects of the industry this year and other matters there to. Excerpt:

What is your assessment of the maritime industry in the out gone year? 

First of all, I want to say happy New Year to all practitioners in the maritime industry. 2014 was a year of remembrance because a lot of things happened during the year. The first thing is the awareness of the practitioners in the maritime community and the revenue drive which we as shippers, we excelled in 2014 because revenue from our own little place super ceded what we generated in 2013, which means there has been some increase in activities, increase in the intake of TEUs containers. And when we have increases like that, of course, revenue will improve.

We also noticed government attention that they set up so many committees to look into so bottlenecks in the administration of the maritime sector and that is very good for us and these committees did their little bits even though we have not actually benefited from the decisions they arrived at in their various committees.

We looked at the activities of the shippers, in this whole business, it is the duty of the shipper to provide the cargo. That is all we need to do, we are not supposed to solve the problems of how we take our goods. What we are doing now is to solve the problem of how the shipper will clear his goods and it is indeed a very huge problem, problem that was created over 54 years ago or even more.

So, the activities of the Shippers’ Association became very challenging because a lot of decay were noticed in the maritime sector and corruption in itself is prevalent. Even though you have government agencies who are supposed to curtail these things, they are overwhelmed in this deep and endless river of corruption in the port.

And we look at the root cause of some of these gigantic problems confronting the maritime industry, we felt it is time for the Federal Government to take a very decisive step in restructuring the industry especially now that the price of oil has collapsed drastically too and it is threatening the corporate existence of this country.

So, we think the maritime industry will take the place of the oil sector. By and large, before now, oil has played its part and next to the oil is the maritime sector. We are now calling on the federal government to professionalize all the institutions that are saddled with the administration of the Maritime sector in Nigeria.

The Nigerian Ports Authority should be made to take full responsibility of why they were set up in the first place and why they were set up primarily is to facilitate trade, not for them to become landlord. Facilitation of trade means that they are supposed to be the terminal operators. That is their primary aim of getting the Nigerian Ports Authority to be an entity. If we have the Nigerian Ports Authority as the terminal operators, we would have solved 65 percent of the kind of problems we see in the private entrepreneurs. Before now, the Nigerian Ports Authority did very well and it was the pride of this country.

Are you suggesting that the Nigerian Ports Authority should have been a terminal operator alongside the private operators that are already operating or that it should have taken the entire responsibility as a terminal operator?

If look at the activities in the ports today, the private participation in the maritime sector is not realistic, the concession agreement is not realistic, the practice of collecting revenue is also not realistic. The Nigerian Ports Authority will take approval from the Minister of Transport, before they effect any increase in charges. And of course, they won’t do that alone, they will discuss with the stakeholders.

But it is not so with the private sector. It is the only industry where you put in for instance 600 million dollars and you start to get back your money the next day. You know why? It is self evolving, it is something that comes in daily. So if you put in 600 million dollars, in less than three months, you get your money back. So, I don’t why they should even make all these noise.

So, NPA would have helped the federal government to achieve a lot more. Some of the funds we pay to the terminal operators probably would have been controlled effectively by the Federal Ministry of Transport. But when you have private entrepreneurs dictating price without control, it becomes a problem.

We saw that and we were very in line discussing with the Nigerian Shippers’ Council. Last year had been a very successful year that the maritime community was able to get an economic port regulator known as the Nigerian Shippers’ Council. The Nigerian Shippers’ Council according to their Act is giving the responsibility not just to arrange for freight charges but also to control port charges including the terminal and shipping companies’ charges. That is what the Act says.

For Nigerian Shippers’ Council to be effective, they went into cross country discussions with all the stakeholders, that is to my knowledge and all of them are to follow the step that the shippers’ Council took and all of a sudden, of course, you know the story, they went to court.

Because we are major stakeholders, we represent the shippers in this country, we became an interested party because there is certain information that we have that the Shippers’ Council may not really have and we tendered some of these information in court and the court saw what the Nigerian shippers have been suffering for God knows how long. They took it from 2006 to the present day and the court came out with a very fundamental judgment not because of the cries of the shippers but because of the country, the economy of this country because of the future generation, because this is our country, we have to build a platform for children unborn. We commend that Judge for such a landmark judgment because it is a fundamental judgment in the maritime industry.

We learnt that STOAN and ASLA filed for a stay of execution of that judgment and had indicated their intention to appeal the judgment. Are you aware of this development and if you are, do you think this is a positive development for the industry and the nation’s economy at large?  

Yes I am aware of this development. Well, I wouldn’t say it is a good development. Two days after the judgment, we understand they went back to court to file a stay of execution because the amount of money they have taken away from the shippers is staggering.

We didn’t publish the figure because I think it would have caused some upheavals in the system. We are trying to be very technical about these things all because we want the community to come together and discuss. It is not wrong if you say fine, there is an ongoing discussion and when you know that the Shippers’ Council even if they made a mistake, assuming they did, what you would have done is, ah! I thought we are discussing, how come this publication? We can resolve these things amicably.

Because you see, it is a community and if there is a rift, we expect that whatever rift we have should be resolved on top of breakfast table, it is possible no matter what the problems are. At the end of the day, even if the court comes out with a judgment and it favours the Shippers’ Council, we will still come together and talk.

We felt it as an insult not only to the shippers but to the federal government because someone you are feeding will take the plate from you and ask you what can you do? Anyway, the matter is in court and we are going to be law abiding, we will go along with them to any length and we are already sensitizing our members, I think the next court hearing, they will see the kind of crowd they never expected to see in court because people are suffering.

If for providence you suddenly say alright, because of future, let me plough back the little income I have into importation and you put in for instance 30, 000 dollars and when you come back to this country, your country, we expect the clearing system to be some kind of solace to the individual who want the federal government to make some money from that import and also for the importer to make some money so that he can live well and then keep him busy.

As an importer, you can’t do it alone, you need one or two or three staff to handle one or two things. They are employers of labour and they must pay their staff. So it is not just, I am bringing goods, I am clearing my goods, I am taking everything, everything is taken off the hands of the shippers.

When you look at the customs duty, 5 percent of what he pays has taken part of the capital of the importer and then you have this draconian, faceless terminal and shipping companies’ charges, you can’t compare them. Have you seen where you do business and you complain ? The more your containers stay in the port, the more you pay, in fact, they have nothing to lose, the shipper has everything to lose and you have the freight forwarders’ bills.

In the early stages, you see the customs agent license was Five Naira, then they increased it to ten Naira, from ten Naira to Fifty to ten thousand Naira to Twenty Thousand Naira, that is the renewal of agents’ license. Suddenly it went up to Two Hundred Thousand Naira; it became the most expensive license in this country, even more expensive than the license of DPR. Who is paying the bills? It is the shipper. The man who struggled to get two hundred thousand to renew his license would want to get his money back, he will always jerk up bills and there are so many ways agents know how to make money from. At the end of the day, who pays the bill? The shipper.

So, he has to pay the banks, you have to pay the shipping and terminal operators, you have to pay the Nigeria Customs Service, they have to pay the freight forwarders and then you have the transporters. The transporter has no base, just recently, in the December, yes, we had some very urgent consignment, everybody wants to get his good out before Christmas, you know what the transporters did? They jerked up the price by 100 percent.

There is no control and my question is where is the Council for the Regulation of Freight Forwarding in Nigeria? Where are they? We blame government; government has given us all we need, what is CRFFN doing?

Happily I was in one of their committees where this issue of their transport charges was discussed and there are so many forces fighting against the decision of CRFFN, that is the birth right, it is a body that the federal government created to train and retrain Nigerians. Anybody who is against their survival is against the future generations of this country.

So, they were made to go to court for interpretation of the Act the set them up and they came out victorious. Since they came out, federal government stopped their subventions at one time. We expected that the federal government will even give them more powers so that they can now begin to train and retrain Nigerians and the moment they are train, they give them operational numbers, that his number, supersedes the Customs license because all the freight forwarders are now directly under the CRFFN. These are all the problems we have in the ports.

Talking about CRFFN, there was a time stakeholders called for the harmonisation of customs license and the CRFFN certification as against what obtains currently where Customs licenses its agents who are in turn trained and certified by CRFFN. What is your take on this? 

It is very clear, if you go to a University for instance and you did law, at the end of the day you graduate as a lawyer, who gives you the certificate? Who trained you? Is it not the school? So, you have a body that says by right that you should be trained for that particular profession, it is a profession, at the end of the day, they will give you their certificate, they will take you to the University, you go through all the process of training and you come out, you cannot practice, of what use is that course?

How many people has the Nigeria Customs trained since 1958? They have a training school for their officers and that is a one year course. There are so many things they need to put right my dear friends. If the CRFFN was given the authority to train people, allow them to train people. You shouldn’t make the Nigeria Customs to feel dejected, their duty is to collect taxes. That is all.

They have the right to train their officers to go to the field to collect taxes and what is tax, it is a tariff. The tariff dictates the tax you must pay on each consignment and it is not a local tariff, it is an international tariff. So, if we are law abiding we won’t have all these double charges. Each time we think about it, we get very faint.

But the position of the shipper is not to condemn the guilty, it is to find the way out of all of these things. The CG didn’t create this problem, he met it. We want to see how we can help because it is our profession, it is our business and we want these to be aligned together with the international best practices and once that is done, people will begin to work in accordance with the rules and that is my contention.

I want every importer in this country to succeed and there are millions of them. Do you want to send them out of business; is the government in a position to absorb all of them in the government ministries? They are not even in the position to do so and that now brings me to the employment stuff which we have in this country.

We created a system where they said it is a quota system and the quota system has been grossly abused. There is nothing like the quota system, do you know what we have? The winner takes it all, even in employment. It is not supposed to be so. It is against the nation.

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