N400bn goods rot away over demurrage, shipping costs

lShippers blame manual inspectionlForeign shipping firms, terminal operators slam N60b charges

Importer abandon 7000 containersl

As back-door cargo releases thrivelExport cargoes perish at the terminals

We are ready to deploy scanners soon – Customs

By Godwin Oritse & Godfrey Bivbere

There are indications that clearing processes at the nation’s major sea ports may have worsened as major congestion is building up following increase in incidences of container abandonment by importers.

Vanguard learnt that abandoned containers are now over 7,000, which have already fallen into classification as over-time cargo and accumulating huge demurrage.

Also, new containerized cargoes arriving at the port is estimated at about 2,000 in the past one month. They are expected to face the same challenges that have forced earlier ones into abandonment.

Key challenges, according to the importers and clearing agents range from use of manual cargo inspection by the Nigerian Customs Service, NCS, to rising cost of clearing associated with corruption and exchange rate volatility.

The importers and clearing agents have put the market value of abandoned cargoes at about N400 billion.

The cargoes have accumulated over N60 billion demurrage and associated costs this year alone, and the amount is rising daily.

Vanguard findings revealed that while terminal operators have slammed about N22.5 billion as rentals for the cargoes in their spaces in the first nine months of this year, shipping companies’ demurrage charges is put at N37.8billion during the same period.

A breakdown of the above figure showed that shipping firms collect approximately N20,000 per day for a container while same container attracts a fee of N12,000 per day by terminal operators.

Shipping industry operators explained that the Customs insist on not using digital scanners to inspect the cargoes, a situation which leads to long delays in clearing process and subsequently forcing cargoes to accumulate high demurrage and rental costs.

Consequently, the importers, according to Customs agents, are forced to abandon the cargo, adding that as at June this year, over N400 billion worth of cargoes have been affected by this situation.

The clearing process is also said to be tainted with corruption as freight forwarders claim they are often pressured to part with money to enable fast-track inspection.

Confirming the development, Mr. Lucky Amiwero, President of the National Council of Managing Directors of Licensed Customs Agents, NCMDLA, said that terminal operators are just having a field day making money from the Nigerian port industry.

Port industry stakeholders have specifically attributed the crises to manual examination of cargoes by the Nigerian Customs Service, NCS, despite the availability of digital scanning machines.

Nigeria is said to be one of the few countries in the world still using manual examination for cargo clearance, making the country’s ports uncompetitive against those of neighboring countries.

It will be recalled that the Customs procured about four scanning machines over a year ago at a total cost of about US$160 million.

However, the installation and utilization of the machines have been surrounded by controversies till today.

While the Service attributes the delay to the training time for its personnel that will operate the scanners as well as other reasons, some stakeholders are of the opinion that the Service is deliberately refusing to deploy the machines because the 100 per cent physical examination creates opportunity for NCS operatives to seek and collect gratifications for cargo clearance.

Consequently, the Service still relies on manual examination of cargoes, a process which the stakeholders say is causing the delays in clearing cargoes while spaces at shipping terminals are being taken over by uncleared goods and shippers are complaining bitterly.

Financial Vanguard also learnt that there are many categories of trapped containers including export goods with many agro-perishable already rotten in the various ports.

There are also import cargoes that have been abandoned as result of being trapped and eventually caught up by the variations in exchange rate and tariffs applied by the Customs.

Moreover, Financial Vanguard learnt that a new problem has recently been added to the list with the trapping of monies paid by importers as import duties in a bank that has been suspended by the Customs for non-remittance of money collected to the Central Bank of Nigeria, CBN.

One of the importers told Financial Vanguard that “as the demurrage continues to mount daily, the congestion is getting worse and shipping companies and terminal operators are not interested in issues leading to delays and abandonment of cargoes at the ports. The cargoes are in their facilities and you have to pay for it.”

But a staff of one of the leading terminal operators told Financial Vanguard that “this does not help the terminal operators because terminal operators trade their spaces. The container terminal yard already has uncleared cargoes eating up the spaces. So when fresh containers arrive, we always have issues with space. Where to keep newer cargoes is always a dilemma because the old ones that arrived earlier are yet to be cleared due to the slow nature of Customs examination.”

He further lamented: “When the scanners arrived last year September, we were happy because to us, that should signal the end of physical examination of cargoes at the ports.

“Examining cargoes physically is a very slow process. Imagine the amount of containers that arrive our ports every day; how many can Customs officers examine physically on a daily basis? Customs officers are human beings and have their limits.

“If Customs does not examine these containers, they cannot leave the ports. But the form of examination being used is sluggish. Thus, the number of uncleared containers cluttering the ports keeps rising. It’s a dilemma that we find ourselves in the ports.

“The scanners are right there in the port. They are brand new but are not being used. It’s such a confusing situation that we find ourselves at the Apapa ports.”

Customs explains

The Customs seems to be in agreement with the need to deploy and use the scanners.

Immediate past Public Relations Officer of Onne Customs Command, Ifeoma Onuegbo, had earlier explained that the one scanner left for the Command has since been installed, but Customs agents in the command said the scanner has not been functioning properly contrary to the position of Onuegbo, who explained that the only problem was that the lone scanner is not enough to service the volume of cargo passing through the Command.

At the Apapa Customs Command, the equipment has not been put to use one year after delivery and the Command headed by Comptroller Yusuf Malanta blamed the development on ongoing works on the Lagos-Ibadan standard gauge railway track.

However, Abubakar Usman, Public Relations Officer of Apapa Area 1 Command told Financial Vanguard that modalities are complete for deployment of the scanners.

He said they are waiting for the scanners to be commissioned. He also said it is not true that the Service is deliberately delaying the deployment of the scanners for personal gains.

He noted that what is referred to as delay is preparation time.

Efforts to speak with the new Public Relations Officer of Tin-can Island Command, Nkiru Nwala, was not successful but Vanguard authoritatively gathered that the two scanners at Tin Can Island Command are also yet to be deployed.

Reacting to the issues, the spokesman of the Nigerian Customs Service, NCS, Mr. Timi Bomodi, a Deputy Comptroller of Customs, told Vanguard that the scanners are ready to be deployed adding that its deployment will be before the end of the year.

Bomodi said: “Very soon all the scanners will be put to use very very soon, we are waiting for a date for the Minister of Finance to pick a date for the commissioning and deployment of the scanners.

“Yes, definitely before the end of the year, it is just the Minister’s schedule that is delaying it, once she tells us what her schedule is and she picks a date, we are ready to go.”

But recall that the Comptroller-General of Customs, Col. Hameed Ali (rtd), had said in the past that the Service will continue with 100 per cent examination despite availability of scanners because importers are not sincere in their declaration.

Stakeholders’ perspectives

Former National Public Relations Officer of the Association of Nigeria Licensed Customs Agents, ANLCA, Joe Danni, insisted that the Customs is deliberately delaying the deployment because it wants to continue with 100 per cent physical examination which gives them opportunity to interface with importers and their agents directly.

He said what is needed is “re-calibration” which is adjusting the equipment to suit the Nigerian environment, which is what is taking the Service over a year to do.

He stated: “What they want is to continue making their personal money, they want to continue the direct interface which will give them the opportunity to demand ‘settlement’.”

Speaking on the development, Yinka Aroyewun, president, Council of Maritime Trucks Unions and Association, COMTUA, said that several factors are responsible for containers being trapped at the ports.

On why Customs is not operating with scanning machines at the ports, Aroyewun said: “To be honest with you, after scanning, in some cases, you may need physical examination because the scanner may not be able to detect certain things; it happens.

“But the reduction of human interference which is going to be the major mile covered by scanners is not going down well with our regulating agencies. So those are some of the reasons I think Customs, in some cases, is not comfortable using scanners”.

He suggested that a way to get it right at the ports is for government to bring its political will to bear.

“We need government’s genuine political will. Apart from political will, we all need to be patriotic; all of us and the agencies of government or the regulatory agencies the Nigerian Shippers Council, the Nigerian Ports Authority, and the Council for the Regulation of Freight Forwarding in Nigeria, to come alive to their responsibilities,” he added.

President of the National Council of Managing Director of Licensed Customs Agents, NCMDLCA, Lucky Amiwero, had earlier told Vanguard that the old scanners operated by former service providers, and installed in all the ports and border stations could still be serviced and put to use.

Amiwero stressed that the Customs deliberately left the million dollars equipment acquired through Build Operate and Transfer, BOT, abandoned.

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