Demurrage: Importers Save Billions As Presidential Team Ends Containers Blockage At Seaports

Importers operating at the nation’s seaports can now heave a sigh of relief as the the Presidential Standing Task Team (PSTT), of the federal government has stopped indiscriminate blocking of cargoes by security agencies at the seaports.

To this end, they have been able to save huge amounts incurred on demurrage and storage charges due to blocking of already cleared cargoes.

LEADERSHIP reports that before now, the Nigeria Police Force (NPF), Standard Organization of Nigeria (SON), National Agency for Food Drugs Administration and Control (NAFDAC), Nigerian Agricultural Quarantine Service (NAQS), National Drugs Law Enforcement Agency (NDLEA) and the Directorate of State Service (DSS), do order terminal operators not to release already cleared containers from the port alleging non existent infractions.

Stakeholders also disclosed to LEADERSHIP that over 300,000 containers are blocked in a year by these agencies, thereby, leading to huge demurrage from shipping companies and storage charges from terminal operators even as they complained without any respite.

However, speaking exclusively to LEADERSHIP over the weekend, the coordinator of PSTT, Moses Fadipe, said the team has been able to reduce the numbers of blocked containers drastically

According to him, containers can no longer be blocked without any cogent reason because all the agencies blocking containers are available during the examination of cargoes by the Nigeria Customs Service (NCS).

According to him, they have been able to reduce storage and demurrage charges incurred by Shippers’ and importers on their cargoes.

He said, “Before now, government agencies such as NAFDAC, NDLEA, NAQS, SON, POLICE and DSS blocking already examined and cleared cargoes by the Nigeria Customs Service. This act is indiscriminate interception, and it frustrates Ease of Doing Business (EoDB) at the nation’s seaport.

Some of the reasons they based on intelligence reports and or that the importers or their agents supposed to bring Bill of Laden to them before embarking on clearance process and  but, the PSTT have informed all of them that their officers were present during the examination of those containers and customs already given them go ahead to exit the port.”

The question at the end is the availability of data to suggest the outcome of the level of infraction at the end of the day, which is insignificant compared to the total blocked.

He disclosed that the PSTT has been able to save huge billion of naira in demurrage and storage charges for importers and, in the long run, the nation’s economy.

Fadipe further stated that with the blockage, several cargoes are also trapped and Increase the cost of doing business at the seaports without any cogent reasons.

“The blockage reduces space at the terminal and leads to demmurage charges by shipping companies and storage charges by the terminal operators. It also increases the cost of doing business at the port but we are checkmating them on daily basis and we have told the agencies it’s not of international best practices because it increases cost and it make our ports unfriendly.”

“Blocking containers creates congestion at the terminal yard because cargoes that are supposed to be out of the terminal are returned back, and it increases cargo dwell time at the terminal.”

Speaking on the action taken so far to reduce the act, Fadipe, a director in the Nigerian Shippers’ Council (NSC), disclosed that they have engaged the agencies and asked them to state to the team why containers should be blocked from exiting the seaport.

“There has been improvement in the blockage of cargoes in the seaport by the aforementioned agencies since we started engaging them because we told them the adverse effect of doing that especially as it served as an encumbrance to ease of doing business at the seaports. They have, however, promised to stop that, and we have also been able to reduce the number of containers blocked to the bearest minimum.”