Importers to save $25bn cost on freight, insurance as FOB specialist re-positions for business

By Samson Echenim

Nigerian importers can now save freight and insurance costs of over $25 billion as a trade specialist, FOB Global Logistics Ltd, has offered to help importers and freight forwarders in Nigeria import on free-on-board basis, against the cost, insurance and freight (CIF) system that drains importers.

Before now, without an option of FOB, Nigerian importers trade solely on CIF, which requires that payments for goods, freight and insurance be made to the country of origin of goods being imported through the manufacturer before goods can be shipped to the importer’s port of destination. The CIF system involves massive cheating of Nigerian importers who are usually charged more than the true rate by some dubious agents.

In fact, Nigerian importers paid $25.3 billion in freight to foreign shipping lines under the CIF regime between 2015 and 2017, according to statistics from the Nigerian Maritime Administration and Safety Agency (NIMASA).

Jimmy Adebakin, CEO of FOB Global Logistics in Lagos, said he was challenged by the pains of Nigerian importers who have to suffer huge loses each time they import through CIF, hence, he decided to re-brand his international trade services to rendering free-on-board services, which gives importers the leverage and liberty to pay for freight of their importations only after they receive their goods at the ports of destination.

According to him, over 90 percent of all international trade in Nigeria is done on basis of CIF, including 100 percent of all transactions that qualify for forex from the central bank of Nigeria and 100 of all transactions that the importers require credit from banks.

Explaining how he offers his FOB services to Nigerian importers, Adebakin said, “We are a neutral service provider, which means that we have collaboration with all freight forwarding companies. They can utilise our services. We will bring in the cargo for them on behalf of the client and upon arrival of the cargo, they pay us our freight and they will do the cargo clearance and delivery of the cargo on behalf of the client. We appreciate the fact there should be no circumventions and we respect non-disclosure agreements that we have with all freight forwarding services providers. We are what we classified as a third party service provider, using our FOB facility. So, the contract is between us and the Nigerian freight forwarder and the Nigerian freight forwarder has a separate contract between him and the client. So, we are third party service provider in our relationship with other freight forwarders who want to utilise our FOB facility.”

The FOB boss said his company maintains robust relation with partners in Europe, Asia and America who facilitate the company’s shipments to Nigeria and any part of the world.