The seaport is the economic gateway to every non-land-locked nation. SAMSON ECHENIM, in this report, presents an analysis of the impact of the eight-day nationwide strike by organised labour and civil society organisations on the nation’s seaports and the maritime industry generally.
It is no longer news that the ever busy Lagos district seaports were turned into ghost towns at the peak of the one week-long nationwide strike embarked upon by the organised labour and the civil society to protest removal of petrol subsidy by the federal government.
Perhaps, what should be of concern now are the losses incurred by the various investors and stakeholders in the maritime industry. The nation’s seaports are significant employers of labour, harbouring in addition to core shipping professionals and unskilled labourers, food and drinks vendors, business centre operators, recharge card vendors and many more.
The number of people engaged directly and indirectly by the maritime industry runs into millions. These Nigerians are still counting their losses after the strike.
Industry Hit By Over N50Bn Loss
During the nationwide strike period, the Nigerian maritime industry may have lost up to N50 billion, if data provided by some industry analysts are anything to go by.
According to industry experts, the figure includes income that would have accrued from tariff and excise collections by the Nigeria Customs Service, terminal handling charges, freight charges, haulage charges, marine services dues and dues from other ancillary services in the industry.
Out of the figure, the federal government alone is said to have lost a total of N13.20 billion as tariffs and excise revenues accruable to it through the various Customs commands collections at the ports in those five days.
A maritime analyst and managing director/chief executive officer of Tentpeg Communications Network Limited, Mr. Goddy Oghenejakpor, said that the amount left unharnessed within the five days would be in the region of N50 billion.
Speaking on how he arrived at the figures, the renowned maritime industry analyst said that the revenue figure released by the Comptroller General of the Nigeria Customs Service (NCS), Dikko Inde Abdullahi, late last year, revealed that in August 2011, the Service raked in a total of N76.2 billion, noting that when the amount is divided by 30 days it would bring the revenue collected by the Service daily to about N2.54 billion.
“And should that be multiplied by the five days of the strike, the total amount lost by the government from the side of the Customs would be N12.7 billion. Similarly, the management of the Nigerian Ports Authority (NPA) had said in 2003 that it lost about N100 million daily to the strike called by labour then. Although the cargo throughput has increased from 44,952,078 metric tons in 2005 to 74,910,284 metric tons in 2010 and by July last year it has risen to 87,275,087metric tons, if the 2005 amount of N100 million is still to be used, the Authority would have lost over N500 million. And when that amount is added to N12.7 billion the Customs would have lost, the total amount would become N13.20 billion”, he observes.
Oghenejakpor points out that the industry would actually lose far more than N13.20 billion, should the revenue accruable to other institutions and agencies are included in the loss so far recorded.
He estimates the actual amount that would have been lost to the five- day-old strike in the region of N50 billion if the income from the other sub-sectors of the industry is added.
The spokesman of the Tin Can command of the Nigeria Customs Service, Chris Osunkwo, however debunked reports that the federal government lost revenue accruable to it through Customs collections and other agencies from the maritime, as the containers and cargoes imported were yet to be cleared, adding that all revenue would be realised as the consignments are cleared.
The general secretary of the Indigenous Shipowners Association of Nigeria (ISAN), Capt. Niyi Labinjo, said vessels belonging to indigenous ship owners had lied idle on the waters.
Capt. Labinjo, who acknowledged that the country was losing huge amount of money in the nation’s maritime sector daily during the strike period, however, noted that the strike was inevitable and for the common good of Nigerians.
Yet, left completely unarticulated would be loss by other stakeholders in the industry including terminals operators and shipping companies, who lost millions of naira as they had no choice but to bear a 100 per cent waiver on demurrage charges.
In an obvious frantic effort to articulate the losses, the director-general of the Lagos Chamber of Commerce, Muda Yusuf, said demurrages on the vessels might not be waived, as the owners of the vessels are foreigners.
He said: “Vessels charterers would have to pay demurrages on the ships that would have to stay longer than the period they are chartered for due to the strike and this runs into millions of naira. The owners of the ships are foreigners, so they are not affected in any way by whatever strike that took place in Nigeria”.
According to him, importers have also lost funds in form of interests on borrowed capital which would inevitably be on the increase as they are stretched over additional number of days not envisaged in the original lending plan.
“Although importers did not in any way lose their cargoes, they may have incurred further costs on borrowed funds as the strike was capable of delaying payback time, which would result to more interests on the funds,” he added.
A Busy Week For Dockworkers
Within the strike period, vessels merely berth at the ports where there were available anchorages, while the unlucky ones resort to romancing the nation’s coastal waters.
About 29 vessels and tankers were either on anchorage or awaiting berth during the period of the strike.
The chief operating officer (COO) of Nigeria’s largest port concessionaire and terminal manager, APM Terminal, Mr. Koen De Backker gave a more explicit picture of the situation during the strike.
“Like all other industries in Nigeria, our terminal operations have been suspended since Sunday night. No vessel operations are entertained and no containers are delivered to or released from the terminal.
“That means that container stocks in the terminal are stable and have not changed since Sunday night. Only that there are a number of vessels that will have arrived at anchorage and will be queuing up to start operations as soon as we re-open”, Backker said, in an email to our correspondent on Wednesday, the third day into the strike.
About 29 vessels and tankers carrying petroleum products and other cargoes have anchored at the nation’s ports in the first four days of the strike without dockworkers to off-load the ships. The implication is that there is already more than enough works for the dockworkers as they resumed on Tuesday morning.
Although business kicked off earlier than usual, no unusual congestion was observed by our correspondent at any of the Lagos district ports when he called at the ports from as early as 8am and thereafter on Tuesday.
At the Five Star Port, a container vessel and a Ro-Ro vessel were on berth and being off-loaded by dockworkers, who told our correspondent that a number of vessels were awaiting berth. About 29 vessels and tankers were said to be awaiting berth having been delayed by the nationwide strike.
“Work is going on well here. I cannot say that we are having a rush, but after we finish work on these vessels others are already waiting to replace them,” said John Olansebe, a foreman at the Five Star Container Control.
At the Ro-Ro unit of the Five Star terminal, cars numbering in their thousands were lined up for final clearance, just as the agents are busy around with clearing documents. There were also trucks supposedly imported by the Dangote Group as they bear the company’s logo on their doors. The federal government assisted mass transit luxurious buses, believed to have been imported as part of the government’s relief programme on the backdrop of the petrol subsidy removal, were also sighted at the Five Star terminal on Tuesday.
At the APM Terminals, over 500 containers had been laid on the examination ground, ready for scanning, as agents busy at the Cotecna office, were busy checking out the scanning results of their containers.
Looming Strike By Agents Abated By Waiver On Demurrage
At the resumption of activities at the ports, there was looming clash between customs agents and importers on one hand and shipping companies and terminal operators on the other hand over demurrage charges, leading to fears that there might be another strike, this time by the agents who would not want to pay the demurrage charges.
Analysts have anticipated that shipping companies and terminal operators might charge demurrage on cargoes which were lying at the terminals during the strike and feared that customs agents may embark on another strike to protest such charges.
During the strike, the ports were not shut down as feared. They were opened by the Nigeria Ports Authority (NPA), but the striking workers were not there. Men of the Nigeria Customs Service (NCS) were also on duty during the strike. This had posed an argument on whether the agents had a permissible excuse for not coming to the ports to clear their consignments.
On the issue of demurrage, heads of the various freight forwarders and agents associations were already talking, making effort to give cogent reasons why demurrages should not be charged.
National president of the National Council of Managing Directors Of Licensed Customs Agents, Lucky Amiewero, said in line with international best practices, terminal operators and shipping companies were not supposed to charge either demurrage or storage charges during the strike as the action was not caused by the importer or his agent.
“When a strike action is declared in a country, demurrages and rents are waived, because under the contract of fair treatment, the contract has what is called ‘Act of God’ and in the process, there are strikes, lockouts and civil commotion. All these make clearing of goods impossible, making grant of concession in terms of rent on containers and other goods all over the world inevitable.
“So, the loss here, which has been estimated at billions of naira is enormous. But the truth is that it is not about the money we have lost, but what we will gain as a nation when government becomes transparent,” said Amiewero, the CEO at Eyis Resources Ltd.
However, importers and agents were relieved of costs worth millions of naira on Tuesday, when shipping companies and port operators waived five days demurrages on containers and other cargoes, as works began at the nation’s seaports after the one week-long strike and protests by organised labour and civil society against removal of petrol subsidy by the federal government.
A veteran freight forwarder, Julie Ogboru, told LEADERSHIP SUNDAY at the Tin Can Island Port on Tuesday that no demurrage was charged on five cars and other consignments, which she cleared from the Five-Star and the PTML Terminal.
Also, the spokesman of Sifax Group, managers of the Ports and Cargo, Tin Can Island Port, Oliver Omajuwa, also confirmed that his company was discussing waiver of the demurrages and might actually relieve importers of the cost.
Another Chance To Develop Nigeria’s Maritime
The strike and protests occasioned by fuel subsidy following government’s intention to deregulate the downstream oil sector, came with its lessons. Specifically, maritime players agreed that deregulation of the oil sector would help to rid the nation of corruption in both the oil and the maritime sectors. Indigenous shippers believe that the trend would kick start a fresh course for their businesses as it would reduce engagement of foreign ships on Nigerian waters doing local businesses.