Empower NSC as regulator, says maritime experts, amid foreign surcharge on Nigerian importers

BY: Ben Eguzozie, in Port Harcourt

• NSC calls combined frontal fight against charges

Amid a vexatious introduction of arbitrary surcharges by some international shipping firms on Nigerian importers, some maritime experts at the Nigerian Shippers Association (NSA), Rivers–Bayelsa chapters, have advised the Nigerian federal government to urgently empower the Shippers Council (NSC), being the country’s maritime regulator, to protect all shippers.

“By empowering NSC, what we mean is that the federal Ministry of Transportation should join hands with the

Shippers Council, and issue a strong statement to all shipping firms operating in Nigeria, demanding they rescind the surcharges,” the maritime experts told Business A.M. in Port Harcourt.

Ofon Udofia, chairman of the Nigerian Shippers Association (NSA) Rivers–Bayelsa chapters, who captured the stand of shippers in the region, told Business A.M. in an interview that, “the transport ministry and the Shippers Council, as federal government agencies overseeing the transportation sector where maritime is also domiciled, should join forces to demand for the reversal of the new charges, in order to protect all Nigerian shippers and other port users.”

He said it was time the NSC stood up to the international shipping firms in the country, as a credible maritime regulator, by writing to their home offices to always inform it (NSC) before introducing any unilateral charges. “The Shippers Council should ensure that all foreign shipping firms operating in the country consult with them (NSC) before taking any charges in Nigeria,” he said.

Reports said foreign shipping firms operating in the country: CMA, CGM and Hapag-Lloyd had late last year slammed $1,025 surcharge on 20 feet (ft) and 40ft containers on cargoes coming into Nigeria, from United States and US territories, China, Taiwan, Hong Kong, and Macau. Charges on cargoes from the rest of the world are also pegged at $1,025 or EUR 930. The charges are different from the ocean tariffs, bunker-related surcharges, security-related surcharges, terminal handling charges, among others, which now shore up the cost of shipping in Nigeria.

Importers in the country are currently grinding under huge surcharge on cargoes imported from across the world into the country, imposed on them by the international shipping firms. The surcharge adds to the high cost of doing business in Nigerian ports, tied to the challenges of infrastructure deficiency and the cumbersome shipping process at the nation’s gateway.

Since last December, Hapag-Lloyd, German container shipping company, introduced a “revised peak season surcharge (PSS) on Tin Can Island and Apapa ports in Lagos. The PSS applies to all container types from across the world to Tin Can Island and Apapa ports. Hapag Lloyd, according to its notice, is imposing the surcharge till further notice. Industries in Nigeria are decrying the new charges, lamenting that the high charges are affecting their profits, which have already been badly hit by COVID-19 pandemic.

For Hapag-Lloyd, the new Nigeria surcharge may have contributed to drive up its bottom-line for the first half of the year. The shipping company closed H1 2020 with a group profit of $314 million, compared to $165 million seen in the corresponding period a year earlier.

Meanwhile, Hassan Bello, executive secretary and chief executive officer of Nigerian Shippers Council, has described the charges as economic sabotage, and that the council was moving strongly against the action of the shipping firms. He said information available to the council indicates that the new charges applied only to Nigeria, leaving out Benin Republic, Togo, and Ghana, all West African neighbours.

Bello said there was no notice to the Shippers Council and the shippers association that the charge was imminent. “From our intelligence, these charges are over $1,000. It is discriminatory. It is insensitive. Just when the Nigerian economy is recovering a little bit from the effect of COVID-19, it is insensitive for anybody to slam such

charges of over $1,000 on Nigeria’s trade,” Bello said. He described the surcharge as discriminatory because it is not happening in Togo, Benin or Ghana, querying why it should apply only in Nigeria.

Jonathan Nichol, chairman of Shippers Association, Lagos State chapter, has bemoaned the shipping costs. He expressed the association’s preparedness to take things up with the appropriate agencies. He said the surcharge could be linked to congestion at Lagos ports, but was uncalled for, considering the negative effects of COVID-19. “We will certainly induce discussions on this with the Shippers Council,” Nichol said, insisting that there was need to review the costs of shipping in Nigeria. “Importers hardly make profit due to excessive charges,” he said.

Bello informed that the NSC has written a strong letter to the Shipping Association of Nigeria, including their principals overseas, because it is not a local charge.

“Why should Nigeria be the recovery ground for shipping companies? We have three lines of action on the internal level; we are going to call on the Union of Africa’s Shippers’ Council; Global Shippers’ Association and Global Shippers Forum. On the national level, we are rallying round the organized private sector, I am already in talks with the Lagos Chamber of Commerce and Industry (LCCI), I will talk to Manufacturers Association of Nigeria (MAN), as well as big-time shippers like Dangote and Nigerian Breweries, among others,” Bello said.

He called for a combined fight by the NSC, NSA, MAN, and importers against the charges he described as unnecessary. “The charges are unilateral and arbitrary, and we are going to protest against it because it is economic sabotage. It goes deep into Nigeria’s economic recovery. It is against our resolve to recover from the effect of COVID-19,” the NSC chief said.

Kingsley Chikezie, president of Importers Association of Nigeria (IAN), said importers were not happy about the additional charges from the shipping firms at a time they were complaining about high costs of shipping at the ports. He said a lot of things were happening at the ports, including the issue of transfer charges. He appealed to the authorities to ensure an urgent review of the charges.

Some industrialists severely affected by the surcharge burden have urged the federal government to institute litigation against the erring shipping firms for operating against the rule of trade facilitation agenda of the International Maritime Organisation (IMO) during the pandemic period.

Ogunlade Olabisi, the managing director of WellWaters Resources, called on the Federal Competition and Consumer Protection Commission (FCCPC) to intervene on the issue. “I think there is need for the Federal Competition and Consumer Protection to take up legal action against the shipping firm. After all, it is their responsibility to protect consumers in the country,” he said.