Nigerian importers, exporters to pay N320bn annually as foreign shippers reintroduce congestion charges at ports

Nigerian importers and exporters may pay additional N320 billion annually as foreign shipping companies have re-introduced surcharge for congestion due to inefficiency and delays at the nation’s seaports, according to businessamlive findings.

An accounting firm, Akintola Williams Deloitte, in its industry report titled, “Public-Private Partnership (PPP) as an anchor for diversifying the Nigeria economy: Lagos Container Terminals Concession as a Case Study,” had indicated importers and exporters had hitherto paid $800 million (N320 billion) annually to shipping companies as congestion surcharge in Nigeria.

The report, however, noted that the huge amount was saved by the Federal Government’s ports concessioning of 2006 and that the current traffic gridlock may return the charges.

Congestion surcharge is slammed when there is an incident of cargoes piling up at the Quay apron and stacking area and is not being moved out.

Investigations showed that shipping companies now ask importers to pay this surcharge ahead, even before the ship arrives the shores of Nigeria.

Since Nigeria evacuates over 90 percent of its cargoes through road and 0.09 percent on water and about five percent through the rail, an incident on the ports artery road leading in or out of the seaports will have an effect on efficiency on the seaside of the ports.

Businessamlive gathered that the inability of truck drivers to access the seaports to evacuate cargoes, especially bulk cargoes, led to the reintroduction of the congestion surcharge by foreign shipping companies.

For instance, it takes truck drivers about 15 hours to access port gate from various terminals, while it takes over five days to access the port and another four days to exit the ports.

Dabney Shall-Homa, a retired director of the Nigerian Shippers Council, said slamming congestion surcharge on Nigeria by foreign shipping companies is as a result of lack of efficiency on the country’s landside to complement efficiency on the seaside.

According to her, the surcharge is to tell Nigerians that there is a problem and to tell the country not to call vessel to its shores when its environment is not in a right state to receive it.

“Shipping is a derived demand. If a shipping company wakes up today to increase cost, it is not just doing that unilaterally, neither is it increasing because it doesn’t know what to do. It is doing it while following internationally laid down procedures for the increase,” she said.

Although the maritime expert berated the shipping companies for not consulting the Nigerian Shippers Council before slamming the surcharge, she blamed the development on government’s failure to build the nation’s infrastructure over the years.

“To a large extent, they (shipping companies) have not been consulting with the Nigerian Shippers’ Council, the agency responsible for negotiating freight rates and all other charges in the industry, however. If we don’t provide the road and the time the vessel uses to discharge cargoes, who will be responsible for demurrage on the ships and containers?

“So, if the business and efficiency on the seaside is not matching efficiency on the landside there is bound to be problems. That is why you see shipping companies introducing surcharge,” she noted.

She added that a congestion surcharge means there is congestion, and that one can only argue it if there is no congestion.

“Congestion surcharge is slammed when there is an incident and in this case, there is an incident of not having roads.

“Cargoes are piling up at the Quay apron and stacking area and are not being moved out or in. What it means is that the ship will wait a longer period for it to be loaded and when it is discharging, sometimes the terminal will be full to capacity that it cannot hold anymore.”

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Also speaking, Princess Vicky Haastrup, the chairman, Seaports Terminal Operators Association of Nigeria (STOAN ), noted that time is of the essence to maritime activities, as ships now spend 30 days waiting to discharge cargoes.

“In the ENL terminal, I have a ship that has berthed and has been waiting to discharge for months because some other ships cannot discharge cargoes and trucks do not have free access to the ports.

“Time is money in maritime activities because the importers of goods are paying demurrage on the ships and that is why freight and insurance cost, are more expensive for ships coming to Nigeria than any other parts of the world,” she pointed out.

Reacting to the reintroduction of the congestion surcharge, the Executive Secretary of the Nigerian Shippers’ Council (NSC)‎, Barr. Hassan Bello said the council would negotiate the reintroduction of the surcharge.

He said: “Nothing will be re-introduced without us. We will have to negotiate that. Nobody said things should not be introduced. What we are saying is ‘take the necessary steps’. As a matter of fact, we will see a reduction in charges very soon by the time we come out with the whole framework.”

By  Tayo Oladipupo