We’re winning cargoes from neighbouring countries but… – Shippers’ Council ES

Can you give an overview of the Nigerian Shippers Council?

Generally, we have been entrusted with the economic side of issues which Daily Trust is well aware of. We are amazed with the growth of Daily Trust and we will like to partner with it to disseminate information.

The Nigerian Shippers Council (NSC) which was created as far back as 1978 is an agency of the Federal Ministry of Transportation. There was a World Bank proposal for an influencing force to balance the equilibrium between those who provided the shipping services and those that utilised the services. In all relationships, there is always an imbalance which could hurt trade: for example, labour and capital. 

We have large conglomerates of shipping companies, carriers, banks, insurance companies and we have large terminal operators: that is the ports and harbours, and they all stock against somebody who imports. So the World Bank thought that there should be some force to represent the cargo interest because of what use was the ship or the terminal without cargoes. They are actually looking for these cargoes and the cargoes are the ones not actually represented, which means the benefits for international trade of the country will suffer if the imbalance continues.

We have the Shippers Council all over in Africa and in Europe to represent that equation. From 1978 till now, many things have changed. 

What have been your role and achievements in the maritime industry?

We do that through many ways, like the court for instance, when there is a dispute between shippers, it used to take a long time for the adjudication. This is largely because the judge and the lawyers were not familiar with the concept of Admiralty Law. It was not taught in the university then until recently when NSC tried to introduce it through the National Universities Commission (NUC) in the commercial aspect of the law. We had judges’ conference where we took some concepts and introduced it to our judges and now, Nigerian Admiralty Law is getting recognition and faster adjudication. This is one area where we have intervened. Then the arrest of ships by judges which causes the loss of millions of dollars. So we had to introduce the arrest of ships through the New York Convention to judges and now Nigeria is no more the grave yard of ships as the European Union termed it to be.

About two years back, NSC was appointed as a regulator at the ports. We are interested in the economic aspect of the benefits, especially on the contribution of shipping and transportation to the economy. Our duty at NSC is cut out for us: we are to ensure efficiency of our ports, we are to ensure competitiveness of our ports and adequacy of our facilities and by doing that we should create a seamless transportation. Nigeria is in competition with our neighbouring ports. 

Countries are introducing new ways of doing things and we shouldn’t be an exception. In modern places, you don’t even see anybody yet tonnes of cargoes are being cleared, but here we have people everywhere at the ports with corruption, cumbersome and costly procedures. With the intervention of the council, we have been able to reduce that. The first thing we did was in the Standard Operating Procedure. Before then, the ports were like headless chickens wondering from place to place, even when there were procedures. 

With the working relationship we have with the Nigerian Ports Authority (NPA), the UNDP, and ICPC, we are now able to bring our Standard Operating Procedure which enables ports, that if a ship comes in, only the Immigration Service will board, others like NIMASA will do their assessment without boarding the vessel. These are indicators that Nigerian ports are becoming efficient in the international line. We are gradually winning cargoes from our competitors except for the recession. One indication is our neighbours: Niger and Chad, who for bizarre reasons, import their cargoes through far away Cote D’Ivoire, Ghana and other places, we urged them to start coming.

We are also part of the Presidential Business Enabling Environment; which means we have to make the ports friendly, competitive, and no delay. It means you should evacuate your cargo as soon as they arrive as the ports are not a storage place or a store; so we always emphasise on the dwelling time for cargo, which is essential. Time is of essence and that is what we are trying to do.

We are looking at the ease of doing business which is also transparent. Once one is transparent, the huge revenue leakage will not be there as we have to entrench efficiency and simplicity of these procedures then remove bottlenecks. 

The volume of export is rising now and is very healthy looking. Am sure when all these things are put in place, it will be better. We are talking about cluster of industries; but we are promoting two other important infrastructures which are the dry port and the truck transit parks which are integrated.

What is the significance of the dry ports and the truck transit parks you are promoting?

This is bringing shipping to the doorsteps of shippers and an impact to the economy of where these things are sited. We have legacy dry port projects in Isialangwa, Ibadan, Jos, Funtua, Kano Maiduguri and Kaduna. This is as a result of intensive research made by our consultant, a German firm to see the viability of the projects. 

That means you can consign your cargo from anywhere in the world with a bill of laden, a transport instrument to read for instance, China to Kaduna. The seaport is merely a transit point, with the help of the Federal Government’s policy to link every seaport with rail; it means directly from the ship, the container can be taken to Kaduna by train. 

That of Jos is 65 per cent complete now; it is just waiting for one or two things to work. With the support the Kaduna State Government, we are envisaging that in the next three months, that of Kaduna will be completed. In Jos, the rail side to the port is the point now; it is also located near the airport.

In Funtua for example, there is a vast agricultural belt, so we are trying to make it an Agric Free Zone just as we have Oil and Gas Free Zone. Hence, processed cotton and other agricultural produce will have value added to them and it will jump up the export potentials. Our landlocked neighbours like Niger and the Chad are very focused on the completion of these inland ports so that their cargo can be dropped in Funtua due to proximity.  

This is the same thing with the truck transit park. Trucks are parked indiscriminately and it does not happen in other countries but here. We have huge deficit of transport infrastructure so we are mulling the idea of truck transit and parks along the highways where we will have hostels, restaurants, filling stations, mechanic workshops and other facilities just as in other countries. This is where travellers and trucks will stay before continuing their journey. We have gotten land in Obollo Afor in Enugu State and in Lokoja in Kogi State and others are coming. Shippers Council is promoting them, as we are not the ones to build them, so we are calling for private sector participation in doing that. 

Don’t you think there will be issues still operating the dry ports with the poor rail system in Nigeria?

All the five distribution centres are located closely to rail lines. The rail line is important to the ports and we made sure all the ports are located to the narrow gauge system which is a freight rail. In Kaduna now, many coaches are bringing in goods from Lagos and they are taking it to Lagos before the bridge around Niger State collapsed. What we are trying to do is getting international recognition for this port. We are doing the rail right inside the port which is about three to four kilometres. We are talking with the shippers on working on their liabilities to cover the destination to the ports. There must also be nexus between agencies and the dry ports. The Nigeria Customs is very much needed, same with NPA and the shipping companies. There are problems but not as futuristic as it is and we hope we will tackle them.

Is your duty not conflicting with that of NPA which regulates the ports?

NPA is the landlord of the ports; the Shippers Council is multi sectoral. It is not only the sea-road, rail and other modes of transport. The definition of ports in the NPA Act is about sea as it talked about some metres from the sea. There is a need for a connector and moderator in modern times and that is what NSC is doing, from one mode of transportation to another. Goods come by sea, taken by rail and then by road, so a coordinator is needed and that is what the council does.

Do you have synergy with other agencies around the ports?

We have synergy with them. For instance, we worked with the NPA and Customs to convince Niger Republic to come to our ports. We brought them here and took them back, now we are having imports from that country.  Our Standard Operating Procedure was also done by all the agencies, including NPA, ICPC, other port users and agencies. It is key for us to work together and when we do that, we see a lot of progress.  

For the Truck Transit Parks, are there strategies to enforce their usage on truck owners unlike the trailer parks that are failing?

Yes. We have two concepts; ours is a transit park. For the trailer park, it is a mass land were you go to park your trailer, but this is a logistics centre and enforcement is extremely important because we need to guarantee the investment of those who are going to venture into this. We have a memorandum of understanding with the Federal Road Safety Corps (FRSC) and the Nigeria Police for enforcement to ensure that trailers cannot park on the shoulders of the road. Unless they park on our transit parks, there will be penalties to it. Even more, we are working with the road transport owners, road transport workers and other stakeholders who we are engaging to ensure it works. It is very attractive and they are the ones to tell their drivers that if you park outside the transit, they may be penalised.

Some investors felt frustrated in the past because of policy inconsistencies for the dry ports. What has happened in recent times?

The problem was that some of them wanted the ports to be declared as ports of origin and destination even when they are virgin lands and we told them that port means a defined area with certain facilities. We could not declare them so because it will be ridiculous and it is subject to inspection by international bodies. Maybe they wanted that to gain access to finance but we said we are not ready for that. Only few of them were ready and we told them if they had gone to about 65 per cent construction, we could declare that. It is a thing of the past now because the regulatory framework is clear now and we have even signed a new agreement on this.

The national shipping line that you are advocating, how long will it take to work?

It is not a national shipping line but a national carrier, and distinction must be made because the national shipping line was that of government but it went underground. What we are doing is to ensure Nigerians have control of our transportation so that we can decide the cost. Right now, all the cargoes are carried by international vessels even when Nigeria has vessels that are trading in faraway places like America. So we said the private sector should lead, but government is the enabler and a catalyst. That is why Shippers Council was appointed the chairman of the committee. Imagine the impact it will have on the freight that Nigerians will have. We have a lot of skilled engineers and other workers that are not doing anything. We have gone far on this and a transaction advisor is also being appointed to stimulate interest. We also need to have technical partners to work with, and it is 40 per cent ownership for foreigners and 60 per cent for Nigerians. With this we will start seeing Nigerians owning shares in ship.

The reason why some Nigerians have not keyed into it now is because it is a heavy investment and then the recession has affected it. 

What is the funding arrangement for the National Shippers Council?

We are a small sized agency; we cannot compare ourselves with our richer cousins. We are funded by the Port Development Levy which is paid by people who operate at the ports. We are not funded by the government through an allocation or from the federation account. It is generated by the shipper’s activity. They pay a certain percentage to a pool which is being paid to NPA, NSC, NEPC and some others. NSC takes two per cent of that. 

However, we are supposed to be funded by the Freight Stabilisation Fee, which is one per cent of every import and export; it is a lot of money if we even consider petroleum products; that is why we have NNPC on our board. Over the years, we have tried to force this to work but it is not.

What would you say about the many charges being imposed by agencies at the ports?  

We cannot justify illegal charges and we are working to make sure these things are not done. The idea is to bring in automation to the port system when no one will need to be at the ports. By the time we introduce the Cargo Tracking Note, there will be no need to verify whether the goods are standard or not because it will be known clearly. It is one transport instrument that will solve a lot of problems. 80 per cent of goods that are imported are not well declared and some of them are concealed or hidden. With the Advance Cargo Information System, nothing will be imported into Nigeria without being declared. The advantage is that the information is given to relevant authority even before the ships arrive so that the risk assessment by Customs is done, and you can even pay your duty early. It will boost the revenue collection of Customs. We also discussed with the Customs on multiple checks so that when the goods are cleared form the ports they need not to be checked again, this has reduced tremendously. With automation everything will be illuminated and that is why you don’t have to arrest anybody for corruption but prevent corruption with a system so that nobody will be able to do it.