Lagos Shippers’ have criticized the federal government policy on palletisation of cargoes. YUSUF BABALOLA writes.
Among the recommendations reached by the the Presidential Enabling Business Environment Council (PEBEC) setup by the federal government on ease of doing business in Nigeria was palletisation of imports, advanced cargo manifests, reduction in documentation requirements and scheduling of Joint Physical Examination by the Customs Service.
The recommendations was to facilitate trade in the country and trading across the nation’s borders.
The recommendation also includes sub-national reforms across Nigeria’s 36 states; trading within Nigeria; kick-off of initiatives and reforms improving business processes and regulations within Nigeria; and ease of movement of goods within and across regions in Nigeria.
Why FG established PEBEC
One of the reasons government created PEBEC was because Nigeria ranked 169th out of 190 countries on ease of doing business in the world revealed that Nigeria have multiple bottlenecks to contend with and resolve.
However, two of the areas in which Nigeria performs lowest on the Doing Business Index are trading across borders (international trade), and paying taxes. In trading across borders, Nigeria is ranked 181st, out of 190 countries. First, on international trade; it takes far too long to export or import goods and the cost is prohibitive in both cases. Nigeria comes well below the continental average for every single metric under this area.
This poor ranking was coming at a time when the government seeks to promote non-oil exports as a way to boost foreign exchange earnings, the cost of complying with customs regulations, mandatory inspections and related procedures is over five times higher in Nigeria than advanced economies.
But, if the Federal Government genuinely means to promote exports, then it must stop its agencies from charging rates that discourage exportation, and exporters should be able to perform required procedures in a more time-efficient manner.
What the DB index provides for Government
The index provides a useful guide on the areas to start with and focus on for maximum impact if Nigeria is determined and serious about improving its overall business climate. As a tool to objectively assess actual regulatory reforms, the World Bank’s annual Doing Business (DB) Index provides a glimpse into the challenges that companies, especially small and medium enterprises (SMEs), face in the course of carrying out normal business activities in the country. The DB report shows areas where there are opportunities for national governments to improve or streamline existing regulations, making it easier for the private sector to blossom.
PEBEC Recommends Palletisation
However, PEBEC has recommended palletisation of cargoes. Pallets are used to stack, store, protect, and transport materials in the course of being handled by materials handling equipment such as forklifts, pallet jacks or conveyors, being stored in racking or bulk storage, or being positioned in transport vehicles.
The pallet is the most common base for the unit load, which includes pallet and goods stacked atop it, typically secured by stretch wrap, strapping, shrink wrap, adhesive, pallet collar, or other means of stabilization.
Shippers’ Kick Over Pallets
Shippers’ in Lagos state have kicked against one of the recommendations of the Council which was palletisation of cargoes. According to them, Nigeria may lose more cargoes to ports in neighbouring countries if federal government insists on a policy to store and transport goods on pallets as a unit.
Nicodemus Odolo, on the board of trustees of the Shippers Association of Lagos State, reacting to reacting to the Revised Import Guidelines from the Federal Ministry of Finance that shipping lines shall ensure that Nigeria-bound containerised cargo are palletized.
Why Shippers’ Reject Palletisation
According to Odolo, Nigeria didn’t want palletisation because not all cargos need to be palletised.
“There should be exceptions; the ministry should let shippers choose whether to palletise a cargo or not.
“Many Nigerian shippers have relocated to other countries to do their business because of the unfavourable policies by the government which have resulted in high cost of doing business in Nigeria but with less profit.
“Whoever advised the government about palletisation of all goods is not a friend of the shippers because this policy only favours the foreign shipping lines,” he said. According to him, the quantity of goods which ought to go into the container will be reduced as a result of pallets taking up spaces, which simultaneously will increase the amount of container used to ship the goods.
Odolo also said that this would increase the cost of freight to the benefit of the foreign shipping lines.
Benefits of Palletisation to Cargoes
Despite aversion to palletisation, experts believed that palletized products can be moved more quickly than by the manual handling of individual palletized cartons. Palletisation also leads to faster turnaround of delivery vehicle and increasing operational efficiency of transport equipment. Dramatically reduced labor requirement and reduced risk of temperature abuse for perishable products on unrefrigerated docks.
Palletized goods require less manual handling and less risk of product damage and reduced risk of worker injury. Palletized products can be moved more efficiently and stored more efficiently in warehouses.
Pallets are typically easier to handle with material handling equipment than other styles of unit load bases such as slip sheets, which may require specialized equipment. Pallets provide drainage and circulation for commodities requiring this, including fresh produce.
The Way Forward
Since, PEBEC was created to help facilitate trade, reduce cost of doing business and ultimately make Nigeria ranks high on ease of doing business, the government and Shippers should reach a compromise.
For instance, pallets are typically easier to handle with material handling equipment and also provide drainage and circulation for commodities hence, it shouldn’t be be jetisioned by importers and shippers.