Issues in illegal shipping surcharges in Nigeria

It is believed that in Nigeria most surcharges in the shipping industry which involves the movement of goods from one continent to another are not justifiable and negative to the trade. ADEOLA TUKURU.

For International trade to flourish, there is the need for unimpeded movement of goods from one part of the world to another. Impediments to free flow of goods poses a great challenge to the development of effective international trading.
Nigeria had competed over the years with neighboring ports for the transshipment hub. 

Surcharges force Nigerian shippers to neighbouring ports
Reports has it that such surcharges may further worsen the situation and many Nigerian shippers may be forced to use neighboring ports like Cotonou and resort to smuggling through the various porous border routes.

The Vice President Prof Yemi Osinbajo observed that more than N2 billion is repatriated by multi-national shipping companies in a quarter of a year. 
All these were reviewed at a sub-regional summit on Unfair Shipping Surcharges and High Local Shipping Charges at the Port of West and Central Africa Sub-Region organised Nigerian Shippers Council (NSC) recently in Abuja and to address these issues and proffer long last solutions.

The Abuja summit
The summit was in collaboration with the Union of African Shippers’ Councils and Global Shippers’ themed :”Impact of Unfair shipping surcharges and High Local Shipping Charges on National Economies of West and Central African States”.
At the summit, according  to the VP, the process of introduction of these surcharges lack transparency, and are not based on verifiable and available statistics.
What is more worrisome in the surcharges is that the shipping agencies fail to vacate them when the need arises. 

Negative impact on trade

The vice president also said the West Central African states are currently facing harsh socio-economic conditions that have impacted negatively on trade .  

He said the over arching objective of the summit , therefore is for the sub-region to adopt a common position on how to reduce the incidences of unfair surcharges and related issues . 

Among the surcharges that haven been identified as prevalent in Nigerian ports in different colorations include peak season surcharges (PSS) ; extra risk insurance (ERI)/carrier security fee (CSF) surcharge; congestion surcharge (CS); freight tax surcharge (FTS).

Others are operations cost recovery (OCR); low sulphur surcharge (LSS); B.A.F (bunker adjustment surcharge) and C.A.F. (currency adjustment surcharge).

Government intervention

Also speaking, the Minister of Transportation, Rotimi Amaechi said there is no doubt that shipping lines will strive to recoup the extra cost of fuel through introduction of bunker surcharges on cargoes especially on cargoes of member countries of the UASC.

According to him, some shipping companies such as Maersk Lines, CMA CGM and Mediterranean Shipping Co. have already announced plans to introduce bunker surcharges to recover costs from this regulation.

He said the steadfast commitment of the Federal Government of Nigeria towards adopting the resolutions at this workshop and meeting and our determination to implement them in order to reduce cost of doing business, promote efficiency and competition for the economic growth and development of the entire West and Central African sub-region.

On cost of running shipping lines 

The Director Global Shippers’ Forum, (GSF) James Hookham said the cost of running shipping lines are constantly going up, with the sea carriers now using surcharges to cushion the effects of costs of maintaining their businesses.
He however said the Global Shippers Forum has been in the business of checking surcharges, for which it at the Colombo 2016 annual meeting adopted to influence renegotiation of Incoterms 2020; educate shippers on optimum use of Incoterms; and raise awareness of global bodies on impact of surcharges on cost of exports and imports in selected economies.
Hookham believes that while surcharges may not be eliminated, its basis and purpose could be made more understandable and transparent.
On checkmating the shipping companies 

The Executive Secretary/Chief Executive Officer of the Nigerian Shippers Council, Hassan Bello, said the NSC has been checkmating the shipping companies operating in Nigeria on every move to impose chargeswithout due consultation with relevant stakeholders in the port industry in Nigeria.

In his words “We have a pending case in court because we asked the shipping companies to revert to an agreed negotiated rates of some services, after they had unilaterally increased the charges.

“ We are not opposed to alternative dispute resolutionmechanisms to ensure that there is continuous cordial business relationship”.

According to him, the shipping companies capitalize on the absence of indigenous shipping companies in most West and Central African Countries to unilaterally fix rates that are only convenient to them without considering the adverse effects these arbitrary charges have on the economy of their host countries.

He said Shippers’ Councils of member states are expected to negotiate any increase of any charge with the service providers before they are implemented, but it is obvious that the shipping companies do not follow this procedure.

“I believe that concrete resolutions would be adopted on how to address the unfair and high charges of shipping companies at our ports in the interest of our maritime industry,” he said.

Resolution by govt and UASC

At the end of the summit, the Federal Government through the Nigerian Shippers Council( NSC) and the Union African Shippers Council (UASC)agreed to deploy technology on the the issue of transit rate and transportation cost in the aim to advent freight charges .

The Executive Secretary/ Chief Executive Officer , Hassan Bello in an interview explained that before the avent of technology, there was a convention that if there is a cargo meant for Niger and it is transiting through Nigeria port to Niger, custom provides a convoy of excorts that would follow the consignments from the Nigerian port to the last boarder country adding that the essence is to ensure that there was no diversion.

He said they realised that with the modern era of technology as USAC will be given the mandate to collect and collate data relating to freight charges in the West and Central African countries.

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