‘Minimising Ports Charges Will Enhance Ease Of Doing Business In Nigeria’
The Nigerian Shippers Council (NSC) recently achieved the feat of getting shipping companies in Nigeria to sign a landmark agreement to reduce charges by 35 per cent. The Executive Secretary of the Council, Mr Hassan Bello, in this interview with ONYEDIKA AGBEDO, explains that the ports economic regulator has the agenda of making sure that there is not only ease of doing business at the ports but also that the cost is reasonable. Bello also speaks on the outcome of the meeting organised by the Global Shippers Forum (GSF) in London, where issues of arbitrary surcharges against shippers in Nigeria and other African countries were discussed, among other issues. NIGERIA and other members of the Union of African Shippers Council (UASC) attended the meeting of Global Shippers Forum (GSF) in London recently where the issue of shipping surcharges by shipowners against shippers were discussed. Can you give us an insight on what happened? We had a fruitful meeting. Asian
Shippers, Shippers Council from
Italy, European Shippers Council and the British Shippers Council were part of the meeting. We also had the International Chamber of Commerce, ship owners and many others.
Now, the idea is cost. Cost is very important in shipping as you know; and to our national economy. We want a reasonable cost. We want effective cost and we want fair cost. What we seem to have is global understanding as shippers that some of these charges, especially the surcharges, are not as transparent as we want them to be. But even more fundamental is that these charges are done arbitrarily, without consultations with owners of the cargo. We think that when you go to the restaurant at least you will see the cost and you will be given a receipt and then you will know what you have consumed and what you have not. So, we are looking at participatory level whereby shippers will participate in deciding the cost of shipping; and that is fundamental.
So, a lot of things came up and we think that shippers should directly deal with the carriers instead of the agents so that we have a framework for setting up these charges. And we suspect that because freight has been very stable and low until recently because of competition, there is tendency for carriers to make up charges elsewhere apart from their freight. So, the position of our total team – we were with Ghana and others – is to have more transparency by shipping lines. We want participation in decisionmaking. On the surcharges, the information sector observers have is that the ship owners disowned some of the charges, saying the agents imposed them? I want to confirm that. The surcharges are on abnormal things. If such things disappear, the surcharge should also disappear. If you have congestion surcharge, maybe it is justifiable, but when there is no congestion, why should the surcharge remain? When we have bunker adjustment surcharge, that means the fuel price is high, but what of when the fuel price comes low? What happens? Look at what we have been saying about war risk – making Nigerian cargo the most expensive may be in the world. $1,500 to bring a 20ft container to Lagos and $3,000 if it is going to the Eastern port. We have to know what the risks are; you cannot unilaterally, arbitrarily decide these surcharges.
The Global Shippers Forum (GSF) is engaged now with Lyods to find out what is happening to these war risks. Then, one of the most important things is that GSF has asked Nigeria to host its next meeting probably in March or April next year. This is an opportunity for Nigeria to come and make its stand, because it will be effective. There is a legislation Sri-lanka did. Sri-lankans were at the meeting. The idea is to minimise some charges that are already freight inclusive because we believe by paying freight, some of these charges have already been dealt with. Freight is part of that. You have incoterms, which says liner in liner out for example, which means evacuation of the cargo from the ship to the terminals where the shipper collects. You don’t have to pay that; or loading of cargo from destination. The shipper has already taken that in the freight.
Then the issue of delay of cargo; we have to look at it because delay could be dangerous. The responsibility of the terminal operators must be taken into consideration in all these things. What is the responsibility of the freight forwarder? What is the responsibility of the shipping lines and so forth? We all have to go to class now and determine them according to international practice. We have no fear of paying charges but let it be related to services.
Let me give you an example of what happened during our negotiation with shipping companies. Container cleaning charge is that all the containers that come here have to be cleaned. Is that possible? We said no; you have to convince us that these containers will have to be cleaned. So, that is what we are doing now. We have removed container cleaning charges during our negotiation, unless you prove that it is dirty. Then we have inserted a clause that says if through no fault of a shipper, he cannot return the container, he should not be charged demurrage. What people don’t know is that the Central Bank of Nigeria (CBN) has given us responsibility now to look at demurrages. We are looking at not only freight charges but also reasonableness of demurrages. We have to thank the CBN for doing that. They know we are experts in shipping business and they have leased some of their regulatory functions. We have saved a lot of money. We are going to give the report very soon. Why is that coming from CBN?
CBN is the one that controls foreign exchange. One thing I will say is that we have to commend the shipping companies because of their understanding and their commitment to finding solutions to arbitrary and unilateral fixing of costs. They have been here; we have been meeting for one and a half years. The deal we are going to sign, may be we could do better, but let us start. It has opened a vista of dispute settlement mechanism and effective cost. We have reduced the charges from the nomenclature from 16 to five so that we don’t have all these charges.