Stakeholders have united against peak season surcharges on Nigerian-bound cargoes of between $1,000 and $1,500 per 20-feet container by foreign shipping firms, and high demurrage charges by terminal operators. They say the surcharges which are well over 400 per cent increase from the previous $200 and the demurrage costs are hurting the economy badly.
Operators are reeling under the yoke of peak season surcharges on Nigerian-bound cargoes of between $1,000 and $1,500 per 20-feet container by foreign shipping firms, and high demurrage charges by terminal operators despite the Federal Government’s directive that goods imported during the COVID-19 period should not attract demurrage.
A Nigerian-born reporter based in New York, United States (US), who simply identified herself as Oladunni, is one of the victims of the surcharges and demurrage.
During COVID-19 lockdown, she shipped a Sienna mini-van and some household items. She had to pay huge demurrage for the delay in clearing or unloading at the port. This is against a directive of the Federal Government that goods imported during the lockdown should not attract demurrage.
At the end, she had to pay more than N700,000 for demurrage.
Another victim, a Bishop, who has lived in Las Vegas, US for more than 20 years, also suffered a similar fate. He alleged that he was extorted by a shipping firm for sending a car and personal items to the country in preparation for his eventual home-coming. He was made to cough out N900,000 for demurrage.
Worried by the development, a protest letter was despatched to the European Community Shippers Association (ECSA) by the Nigerian Shippers Council (NSC) for the Federal Government. In the views of the NSC, such surcharges were nothing but scaled up economic sabotage and a sad commentary of government’s “ease of doing business”.
The Executive Secretary, NSC, Hassan Bello, was said to have described the charges as “scary” and that if a Nigeria-bound container is charged as much as $1,000 it could suffocate the economy. In his words: “The national economy is in trouble.”
Bello warned that the surcharge introduced when the nation is trying to get out of the economic impact of the COVID-19 pandemic, would lead to spiral inflation in Nigeria.
He said: “Cargoes will be abandoned at the ports; it means job losses and many shippers will be put of business. The charges are astronomic, unjustified, not notified and discriminatory. This is against fair trade facilitation rules.”
He said the Council had written to the firms involved and was waiting for their responses. “We have also written to the Ministry of Transportation to escalate it to Ministry of Trade and Ministry of Foreign Affairs so the Federal Government will protest the charges. We have been having surcharges in the range of $200 to $400, but 400 per cent increase and there was no time limit. It is already going to nine months it is not what any economy can cope with. This can cripple the economy.”
On the contentious issue of demurrage, in 2018, Customs brokers at the Lagos ports launched a “war’’ on shipping firms over a N4 billion demurrage following a strike by truck drivers. They had for six days in June 2018, refused to lift cargoes at the ports to protest alleged extortion by security agencies. Eventually, the N4 billion demurrages and storage charges were cleared by importers. It was believed then that N668 million demurrage was incurred daily during the six-day strike, which amounted to N4 billion.
Stakeholders are worried that the rip-off and the sabotage playing out at the ports contravene Sections 20, 31 and 97 of the Customs and Excise Management Act.
According to them, such situation has grievous implications for the economy, especially because many businesses depend on viable and business-friendly international shipping for profitability.
Recently, the NSC and other stakeholders met in Lagos to present a common front to fight the arbitrary charges. In the coalition is the organised private sector (OPS), under the aegis of Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI), Nigerian Association of Chamber of Commerce Industry Mines and Agriculture (NACCIMA).
LCCI’s Director-General, Mr Muda Yusuf, said: “This is not the best of time for businesses, we will resist it.’’
Also, MAN toes the same line. Its President, Alhaji Mansur Ahmed, said: “MAN will not accept the surcharge because it is coming at a time when manufacturers are working with less staff, less raw materials and lower profit. The price of goods will skyrocket and cost of transports will be unbearable.’’
For NACCIMA, the surcharge, the body says, will affect commerce in the country critically. “Our members borrowed huge sums of money to import items and they are slammed this huge amount, then it would affect the banks too,“ said Mrs. Margaret Orakwusi, the chamber’s representative at the meeting.
The Managing Director of Nigerian Ports Authority (NPA), Ms. Hadiza Bala-Usman, said the cut-throat charges might lead to abandonment of cargoes at the ports with loss of revenue to the ports authority.
“If the importers are charged so high and they abandoned them in the port, NPA will lose revenue and it would reduce efficiency and turnaround of ships to Nigerian port,” she said.
The Vice-President, Association of Nigerian Licensed Customs Agents (ANLCA), Mr Kayode Farinto, declared: “It will affect our economy seriously because Nigeria is an import-dependent economy.’’
In addition to the demurrages and other charges, customs agents are also contending with the shipping firms and terminal operators the issue of storage charges and had petitioned the Presidency over the matter.