Supply Chain Council of European Union | Scceu.org
Freight

Uniting against ‘extortion’ – The Nation Newspaper

The increasing cost of maritime operations, especially as it affects freight forwarders and transporters, among others, may have set the tone for a showdown between shipping firms and terminal operators, MUYIWA LUCAS reports

 

One by one, they trickled into the expansive hall; and, within minutes, the venue was filled with diverse people and interest groups, who gathered in one accord to discuss their common problem.

For long, freight forwarders, transporters, importers and others doing business in the maritime industry have been subjected to various hardship. From the pains of demurrage, either directly caused by them or inflicted by circumstances beyond their control, to the cost of transporting their consignments in and out of the port, not forgetting the parlous state of port roads, it has been tales of woes.

It was therefore instructive when, at a recent gathering, an industry group, under the aegis of Concerned Freight Forwarders and Transporters (CRFT), issued a notice of action to shipping firms and terminal operators, demanding for the immediate stoppage of demurrages and arbitrary charges imposed on their consignments.

The CRFT, while ruing the increase in the cost of cargo clearance, said such actions, especially as being taken by terminal operators and their sister shipping companies, were sabotaging the reforms in the sector.

Its Chairmanp, Mr. Andy Omenogo, said as major players and stakeholders in the shipping, freight forwarding and transportation  sub-sector the industry, they came together to speak with one voice on behalf of their various clients because they were being adversely affected by arbitrary trade practices of shipping companies  and terminal operators.

“The unfortunate practice that has been forced down our client’s throat on a daily basis is that after completion of all clearing formalities and issuance of Terminal Delivery Order (TDO), they proceed to load and take delivery of their cargo only for them and their colleagues to be unable to enter the terminal and load because of contrived congestion in the terminal or lack of space or inability of our designated truck to gain access into the terminal to load which is absolutely no fault of theirs,” Omenogo said.

He regretted that while this scenario could last for several days or weeks, and the clients battle to access and load their cargo /containers, terminal operators and shipping companies keep charging demurrage for a delay not caused by clients but by terminal operators who fail to make their terminal accessible and shipping companies who, he alleged, have failed to provide adequate holding bays for empty containers, thus worsening the situation.

“It is also saddening to note that when our clients eventually take delivery and return the empty container(s), the shipping companies will refuse to receive them on account of lack of space and for as long as our clients find it impossible to drop the empty container(s), the shipping companies and terminals will continue to unconscionably charge them demurrage.  There is no justification for these continuing demurrage charges and our clients demand an immediate end to it.’’

Omenogo, on behalf of the group, therefore said going forward every shipping company must comply with the relevant laws as put in place by the governing bodies. By this, he demanded that shipping companies must refund container deposits within maximum four days after return of empty containers, and the refund must be made in full except in proven cases where the container was damaged while in the custody of the freight forwarder/importer. Even at that, such claim of damage has to be traceable to an act of willful negligence on the part of the freight forwarder or transporter.

“In gross violation of the Government Regulation which is made pursuant to existing laws of Nigeria, Shipping Companies  operating in Nigeria have continued to hold on to our client’s  container deposits for weeks and sometimes  months after the empty containers have been returned,” the aggrieved leader said. His position is back by a directive contained in a notice by the Nigerian Shippers Council (NSC), NSC/LN-SC/2019/002, which says that all shipping companies and shipping agencies shall refund container deposits to importers within four working days after return of the empty containers.

“Indeed, the situation has been appalling given that space constraint has been a hydra-headed problem for trucks working in the ports. This is because shipping companies, after previous pressures, had to rent spaces as holding bays. Unfortunately, such spaces are now grossly inadequate to handle the volume of empty containers that are supposed to be returned to such places, leading to containers being turned back from such holding bays on account of no space.

Read Also: Afreximbank invests over $500m in maritime sector

 

“Apart from inadequate space, shipping companies or terminals operating such holding bays impose illegal charges on our clients and their colleagues for bringing the empty containers to the holding bays which they call service charge or any such related charges imposed on our clients for returning empty containers to a designated holding bay is illegal, exploitative and to say the least, outright fraud,” Omenogo explained.

Buttressing their position, the group referred the terminal operators to the government directive of July 9, 2019, with reference number NSC/LN-SC/2019/002, which stated: “Operators of empty container holding bays should promptly receive empty containers at no cost. The government has not approved any levy for the return of empty containers. Any charge(s) by shipping company/agent or any other service provider arising from delay in accepting empty container(s) shall be borne by the terminal that causes the delay.”

The group therefore placed the following demands on shipping companies: refund of all illegal charges and demurrage collected since the past two years; provision of holding bays with adequate capacity to hold high volume of empty containers. The group also noted that it is now illegal for any shipping company to withhold consignments  due to outstanding payment on previous transactions by freight forwarders.

“Any shipping company  who has such claim against a freight forwarder is by law required to forward its complain to the Council for Regulation of Freight Forwarding in Nigeria (CRFFN) and not to withhold release of any consignment or container. We notice that shipping companies have continued to indulge in this brazen illegality and we hereby demand immediate end to such unfair and illegal trade practice,’’ the group warned, adding that any service provider who causes delay or service failure shall henceforth bear the cost and associates penalty charges arising from such delay or service failure.”

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