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N400bn goods rot away over demurrage, shipping costs

There are signs that clearing procedures at the countrys major sea ports may have gotten worse as considerable backlog is growing as a result of a rise in importers abandoning containers.Infomation Guide Nigeria

Vanguard discovered that there are already over 7,000 abandoned containers, which are already considered overdue cargo and accruing significant demurrage.


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Additionally, it is projected that 2,000 new containerized shipments arrived at the port in the previous month. They are anticipated to have the same difficulties that led to earlier ones giving up.

The Nigerian Customs Service’s (NCS) use of manual cargo inspection as well as the increased cost of clearing due to corruption and exchange rate volatility are major concerns, according to importers and clearing agencies.

The market value of abandoned shipments has been estimated by importers and clearing agencies to be around N400 billion.

This year alone, the cargoes have racked up nearly N60 billion in demurrage and related expenses, and the total is growing.

According to Vanguard research, while terminal operators charged shipping companies N37.8 billion in demurrage fees during the same period, they only charged terminal operators N22.5 billion for renting space for goods during the first nine months of this year.

A breakdown of the aforementioned sum revealed that terminal operators charge for the same container at a rate of N12,000 per day, while shipping companies charge about N20,000 per day.

Operators in the shipping sector noted that the Customs’ insistence on not employing digital scanners to inspect the cargoes results in lengthy delays in the clearing procedure, which forces the cargoes to amass significant demurrage and rental charges.

According to Customs inspectors, this forces the importers to abandon the cargo, and as of June this year, over N400 billion worth of cargoes have been impacted by this problem.

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Freight forwarders claim they are frequently forced to pay money to facilitate fast-track inspection, and this pressure is said to contaminate the clearance process with corruption.

The terminal operators are simply having a field day earning money from the Nigerian port industry, according to Mr. Lucky Amiwero, President of the National Council of Managing Directors of Licensed Customs Agents, NCMDLA, who confirmed the situation.

Despite the availability of digital scanning devices, port industry players have specifically blamed the crises on manual screening of shipments by the Nigerian Customs Service, NCS.

According to reports, Nigeria is one of the few nations in the world that still uses manual examination for cargo clearance, making the nation’s ports less competitive than those of its neighbours.

Approximately four scanning devices were purchased by the Customs over a year ago for a total of about US$160 million.

However, there have still been disagreements regarding the equipment’ installation and use.

While the Service cites training requirements for its staff who will operate the scanners as well as other factors as the cause of the delay, some stakeholders believe the Service is purposefully delaying the deployment of the equipment because the 100% physical examination gives NCS agents a chance to look for and obtain rewards for cargo clearance.

As a result, the Service continues to rely on manual examination of cargoes, a practise that stakeholders claim is contributing to delays in clearing cargoes while uncleared items are taking up space at shipping terminals and shippers are irately complaining.

Financial Vanguard also discovered that many other types of stranded containers exist, including export products with numerous perishables already rotting in the various ports.

Additionally, there are import shipments that have been abandoned after becoming entangled in the fluctuating currency rates and duties imposed by the Customs and ultimately being detected.

Financial Vanguard also learned that the recent trapping of import duties paid by importers in a bank that was stopped by the Customs for failing to return the money received to the Central Bank of Nigeria, CBN, has added a new issue to the list.

According to one of the importers who spoke with Financial Vanguard, “the congestion is becoming worse as the demurrage continues to mount daily, and shipping firms and terminal operators are not interested in concerns leading to delays and the abandonment of cargo at the ports. You are responsible for paying for the cargoes that are in their facility.

However, a representative of one of the top 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.

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“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.”

Ifeoma Onuegbo, the former public relations officer of the Onne Customs Command, had earlier claimed that the Command’s lone remaining scanner had since been installed. However, customs officers at the command claim that the scanner has not been operating properly, contradicting Onuegbo’s claim that the only issue was that the single scanner was insufficient to handle the volume of cargo passing through the Command.

One year after its delivery, the equipment at the Apapa Customs Command has not been put to use. The command, led by Comptroller Yusuf Malanta, blamed the situation on continuing construction on the standard gauge railroad route between Lagos and Ibadan.

The Apapa Area 1 Command’s Public Relations Officer, Abubakar Usman, told Financial Vanguard that the scanners’ deployment modalities are now complete.

He stated that they are awaiting the commissioning of the scanners. He added that it is untrue that the Service is purposefully delaying the deployment of the scanners in order to further its own interests.

He pointed out that planning time is what is meant by the term delay.”

Nkiru Nwala, the new public relations officer for Tin Can Island Command, was not reachable, but Vanguard has authoritatively learned that the two scanners there have not yet been put into service.

In response to the problems, the deputy comptroller of customs and spokesman for the Nigerian Customs Service, Mr. Timi Bomodi, informed Vanguard that the scanners are prepared for deployment and that it will happen 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.Jamb Result 

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.”

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Emediong Silver

Emediong Ekpe is a graduate of English. A professional Sports journalist/analyst, and a spoken word artist. He is passionate about decimating information and putting smiles on people's faces via news writing. Whatapp: 08088735884

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