By Franklin Ogude
Making a career in cargo brokerage or its extended meaning of freight forwarding is a rewarding one that has employed millions of people directly and indirectly. Over the years, it is one profession where people with limited educational background latched on for survival. All it required then was mentorship either with serving or retired customs officers or the established players in the industry. By the way, the profession, which is essentially service delivery emerged out of the need to make retired customs officers and personnel useful. Globally today, it has evolved into multi-dimensional profession that plays pivotal role in logistics and transportation of all sorts. In Nigeria, billionaires have been made out of the profession.
While it is still not fully regulated in Nigeria, the emergence of the Council for the Regulation of Freight Forwarding in Nigeria(CRFFN) was to inject some modicum of sanity and control in the sector. Following this, to practice as a freight forwarder now, the candidate has to undergo some formal training programmes and certifications as well as obtain registration finally with CRFFN.
According to the Registrar and Chief Executive Officer(CEO)of CRFFN, Mrs Chinyere Uromta,an intending freight forwarder should have a minimum of a diploma certificate obtained from some of the Council’s accredited institutions. She said beside training practicing freight forwarders occasionally, they also have a train the trainers’ programme where the trainees train others.
As part of the reforms under her watch at the council, she said they had just concluded a curriculum update meant to be defended internationally to keep up with the emerging trends in the sector and technology ecosystem. There is also plan to ensure that freight forwarding courses are included in Nigerian universities curriculum.
What indeed is Freight Forwarding?
In elementary appreciation,the movement of cargo from one location to another is called freight forwarding. The money paid for a cargo or goods, or the cost of moving a cargo is called freight. Freight further means cargo in motion. Forwarding, on the other hand, is the availability of expertise in the movement of cargo. Put together, freight forwarding is actualized when a cargo is moving and not static. Providing any auxiliary service that aids the movement of cargo is freight forwarding.
In an interview with MMS Plus, Mr. Increase Uche, a member of the governing Council of CRFFN disclosed that freight forwarding as defined by the CRFFN Act of 2007 in section 30, number 16, as anybody or company who arranges carriage or movement of goods and associated formalities on behalf of an importer or exporter across seaports, land border stations and cargo airports. They arrange the carriage or movement of goods from the point of loading to the point of destination, and adhere to the provisions of the ‘four rights’; placing the goods at the right place, in the right order, in the right condition, and in the right time.
Business opportunities in freight forwarding are enormous. There are categories that people can venture into, for instance, being a consolidator; bringing together smaller shipments to form a full container or whole, and consolidator; separating or breaking down one big shipment into smaller packages or smaller shipments so that they can be transported to their respective destination, which could be a store, a warehouse or an end customer. Freight forwarders also engaged in arranging or putting together small shipments to form a whole, that is unitization. Another is multi-modal transport operators; cargoes are moved using more than one mode of transportation; road, water, air, etc. There are asset-based freight forwarders; people who own badges, vessels, warehouses, etc
He said:“We have warehouse operators as well; those who run and manage warehouses and this is an expedient part of freight forwarding.Packaging is not left out and is paramount in the business because, through the arranging of packages and recording, details would be taken of how many pieces of packages would make up an entire container like a 40ft container without having any broken spaces (gaps).
“Another area lies in brokerages; brokerage firms and those who engage in them are called brokers. Nigeria is currently struggling with consolidation and brokerages, but using the nomenclature of custom license agents in place. This is changing, following the new customs service Acts, of 2023. Those with a license in Nigeria operate below expectation compared to countries like the USA, Canada, Australia, China, and some countries in Europe that operate fully. Training is required in all areas for effective utilization and delivery. There is the third-party logistics service; people who engage in handling goods on behalf of others. There are some nomenclatures newly developed that have been incorporated into logistics service operations because they conform to technological developments and are prone to changes.
Opportunity abounds even down to maritime lawyers, risk managers, logistic service providers, multi-holder transport operators, non-vessel operating common carriers; those that do not own vessels and use that of other people, and terminal operations.
However, a section of the CRFFN prohibits anyone from engaging in any area of the business unless they undergo rigorous training and are registered under the body. Courier service operators are not left out in freight forwarding operations that one can always venture into. Some of them don’t need a custom license to operate, but the mischief here in our local body is that you must own a custom license and that is a fallacy (needing the license for operation). Only a custom-related operation will require you to have a license to interface with custom. A consolidator and a couple of people might not need this custom license to operate”.
To become a freight forwarder under the current regulatory body of CRFFN, you must have acquired a standard of knowledge in any transport-related course and must be registered with the CRFFN. Once you have been able to attain all these, then you are free to start as a freight forwarder with the basic knowledge and qualifications. Under normal circumstances, you are to go through serious training to be knowledgeable, communicate fluently in English, and have the propensity to carry out any mathematical calculation because it’s required in the field. You must know geography because freight forwarding has to do with the interplay of environment, you need to also know about economics, accounting, and chemistry because they will be needed if you must interact with customs. This knowledge will help you operate under any circumstance.
Before now the industry had been an all-comers affair, but, with the coming of CRFFN as the regulatory body, it is changing. What has been the cause of this lacuna, is the custom licensing regulations which provides that once you have a registered company under the Corporate Affairs Commission (CAC), you can approach customs to obtain a license and with that license start operating, a practice which is very wrong. Normally, there should be a restriction.
He further stated that the easiest way of getting clients is to go into networking activities. For instance, there are classes of freight forwarders referred to as independent freight forwarders and they cover over 80 per cent of the freight forwarding family.
Independent in the sense that they are multinational operators; not gotten to the level of having many offices in the world but can operate from one office through networking, and interfacing with other forwarders in other parts of the world through which businesses are generated. Then, you must belong to some of these international bodies like the International Federation of Freight Forwarders Associations (FIATA), et cetera. Once you’re a member, then you’ll be collecting businesses.
For membership in the association locally, there are platforms and they can always be approached and requirements met to come in. Whichever area you want to join, fill out the forms, pay the required money and you become a member of that association. You must also be a member of CRFFN, which will help you operate and be recognized in Nigeria. The procedure for registering with the council is also difficult.
He pointed out a pressing problem and the need for help in terms of the associations because “All of them put together cannot even represent the entire industry, so, we need a professional body. For now, the freight forwarding sector needs a professional body like every other sector in the economy. But none of these associations you see registered under CRFFN is a fully professionalized body. So, we need a professional body that will represent the entire freight forwarding industry (one central body) in line with the provisions of FIATA”.
“FIATA, has a rule that every country must have a professional body representing them in the system. “Here, in Nigeria, we have found it very difficult to have such and unless we have that under the CRFFN, freight forwarding operation may not be recognized to be existing in Nigeria. We have been advocating that we need that very professional body”.
The body will help the process of being verifiable as you must possess the required qualifications and proficiency before you are registered. These existing associations, do not have any standards for admission, he added. “You can come in as a mechanic, you can come in as a groundnut seller, whatever you are doing as long as you can pay their registration fee, you are already registered as a member of that association and it shouldn’t be”. The entire industry needs sensitization to curtail all those minor registrations in some of these platforms as they make no sense.
He added, “Nigeria is inactive internationally and the mistake made was to use CRFFN, a regulatory body to register Nigeria as our professional body. FIATA ignored that because it was backed up by the government. There is a need for thorough correction on that as we are not fully recognized by FIATA. We have registered, but have not been maintaining a full regular subscription. They are trying to regularize that, we have been lagging behind and unless we have professional managers who can handle that. It is evident that some of us are professionally deficient and cannot provide the leadership direction that is required.
In his contribution, Mr. Lucky Amiworo stated “We don’t have clearing, what we have is licensed customs agent. Clearing is ambiguous, not legal” and before anyone can be in the licensed customs agent, he must have gone through a very difficult procedure and gotten a licence as a customs agent, and they are not transporters who transport goods. “They classify, treat, interpret and apply the rules, they are trade experts”..
They deal with trade procedures and not just anyone can come in to be a licensed customs agent, but, must be a worker and a trainee.
Many people who are seen around the port are people who have worked under a licensed company and the license is regulated by the Minister of Finance. However, there’s still a controversy over the law passed. You cannot just come to become a licensed customs agent. If you are not a transporter, you can just go buy a transport vehicle and transport goods, but, as a licensed customs agent, you must be trained on the classification, treatment, and application of the goods because you’re a Cargo Doctor. “The way doctors treat human beings is the same way cargo doctors treat cargo”.
On areas of investment opportunities, Mr. Increase pointed out the areas to invest in freight forwarding, noting that it all boils down to individual differences and knowledge gained from training. “Freight forwarders are called the architects of transport and there is basic knowledge you must acquire. Once you have gathered basic knowledge, there’s no part of freight forwarding you cannot venture into”. At the successful completion of training, people can choose where to major, with knowing their strengths and weaknesses. Some people limit themselves to doing customs formalities. But, it is pertinent to note there is no way you can engage in customs formalities without touching other aspects of freight forwarding. Venturing into one area shows you did not get the necessary training.
“There are very limited areas where you cannot venture into once you have been trained. No particular area is more rewarding or lucrative because once you kick-start, you keep expanding and being dynamic. You can start from even the lowest office and grow over time. But, the major limitation here is the lack of capital to expand and if that is conquered, there will be none.