Recently, foreign shipping companies slammed Peak Season Surcharge (PSS) on Nigeria bound cargoes but, Nigerians through the Nigerian Shippers Council(NSC) have protested the additional freight rate increment. YUSUF BABALOLA writes.
The best thing that happened to the Nigerian maritime industry in the last eight years, was the appointment of the Nigerian Shippers’ Council (NSC) as economic regulator of the port industry by the federal government.
The council, since her appointment in 2014 has lived up to its expectations as it helped the industry especially importers and clearing agents, to save huge amount of dollars that would have been lost to illegal charges of terminal operators and shipping companies.
The council has helped address options for competition, decide on entry roles, regulate pricing and monitor outcomes among others.
For instance, the council has stopped astronomical increment in storage charges by terminal operators, and has intervened in excessive demurrage charges by shipping companies on importers.
Also, the council is putting machinery in place to stop container deposit charges paid by importers on containers.
Recently, the council, through the executive secretary, Barr Hassan Bello, protested the indiscriminate surcharges by the multinational shipping firms, who have continued to slam huge penalty on Nigerian-bound cargoes.
The protest which was led by the Nigerian Shippers’ Council (NSC), the industrialists under the aegies of Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI), The Nigerian Association Of Chamber Of Commerce Industry Mines And Agriculture(NACCIMA), Shippers Association of Lagos State (SALS), clearing agents and the Nigerian shipping community at large, met in Lagos and unanimously resisted the arbitrary charges.
Large scale importers such as Dangote Group and Promasidor, also bemoaned the arbitrary charges by shipping companies, expressing readiness to protest the charges with all mercenaries.
The six companies involved are Cosco, Maersk, MSC, CMA CGM, Hapag Lloyd and Evergreen shipping.
The 2020 peak period charges of between $1000 and $1,500 per twenty-foot equivalent unit(TEU) by shipping firms, is over 400 percent increase from the previous $200 freight charge per TEU during peak period.
Barr Hassan Bello said the surcharge when slammed, will lead to port congestion as importers will abandon containers at seaports.
According to him, it will also fuel inflation, drop in government revenue as well as job loss in the country.
To him, “The surcharge is scary. If a Nigeria-bound container is charged as much as $1000, then the national economy is in trouble.”
He expressed worry that the surcharge was introduced at a time when the nation is battling with the effect of COVID-19 that has disrupted its economy.
Bello continued, “ the surcharge will spiral inflation rate on the economy; cargoes will be abandoned at the ports; it means job losses and many shippers will be put of business,”
“The charges are astronomic, unjustified, not notified and discriminatory. This is against fair trade facilitation rules”.
The NSC boss stated that it has written to the erring firms and waiting for responses according.
“ We have also written to ministry of transporstation to escalate it to ministry of trade and ministry of foreign affairs, and the Federal Government will protest the charges.
“We have been having surcharge in the range of $200 to $400, but 400 per cent increment with no time limit is unacceptable. Its already going to nine months is not what any economy can cope with and it can cripple the economy,” Bello said.
Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala Usman who expressed disappointment about the charges also shared Bello’s fear that the surcharge might result to more cargoes being abandoned at the ports.
Usman, who was represented by the General Manager, Tariff and Billings, Abubakar Garba Umar, said, “ if the importers are charged so high and they abandoned them in the port, NPA will lose revenue and it would reduce efficiency and turn around of ships to Nigerian port,”
Director-general, Lagos Chamber for Commerce and Industry (LCCI), Muda Yusuf, said the industries would resist the charges because this is not the best of time for businesses generally.
Yusuf said it will increase poverty rate as well as create massive unemployment. “We need to resist it because it will affect mostly ordinary people on the street, it will increase poverty, unemployment and affect economic growth.
He however advised that it is to the interest of the economy that the surcharge is negotiated.
Manufacturers Association of Nigeria (MAN), said it is a capital no to the surcharge because it is coming at a time when manufacturers are working with less staff, less raw material and lower profit.
Olufemi Emmanuel who represented MAN said, “The price of goods will skyrocket and cost of transport will be unbearable”.
Representative of NACCIMA, Margaret Orakwusi, said the surcharge would affect commerce critically.
“Our members borrowed huge money to import items and they are slammed this huge amount, then it would affect the banks too,” he said.
Vice president, Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, urges a collaboration with ECOWAS on the arbitrary charges.
“ It will affect our economy seriously because Nigeria is an importdependent economy,” he said.
However, the protest has started yielding result as Maersk, an international shipping line, has directed its commercial department in Nigeria to stop applying the peak season surcharge (PSS) from September 1, 2020.
The directive was issued in a letter signed by the managing director of Maersk Nigeria, Lara Lana, and addressed to Hassan Bello, “Our principals in our head office have informed us of your letter with subject reference increase in PSS. Maersk Line has instructed its commercial department to stop applying the PSS from September 1, 2020,” the letter said.
“This is in response to protests by the NSC which recently convened a meeting of the OPS to deliberate on the astronomical PSS imposed by shipping lines calling in Nigeria.
“The Union of African Shippers’ Council (UASC), subsequently backed NSC calls for immediate suspension of the PSS calling it a violation of previous UASC/European Community Ship-owners’ Association (ECSA) agreement requiring prior, mutual and reasonable notification of UASC and Port Management Association of West and Central Africa (PMAWCA) by individual shipping companies before any such imposition of a new tariff, surcharges or increase in transport cost.
“We would like to thank you for the supporting document you shared, shedding light on the meeting between the ECSA and UASC,” he stressed.
Similarly, Mediterranean Shipping Company (MSC), also reversed the Surcharge slammed on Nigerian importers.
According to the chairman of MSC, Gianluigi Aponte, in a letter sent to the executive secretary of the council, Hassan Bello, he said the commercial department of the company has been directed to suspend the collection of the PSS Surcharge on Nigerian bound cargoes.
Aponte letter reads, “We acknowledge receipt of your letter of 16 August, 2020, contents of which received our best attention. After internal investigation, we have found out that the PSS applied varies depending on the origin of the cargo.
However, in view of your request, we have instructed our commercial department to stop applying the PSS from September 1“, 2020. Trusting to have satisfied your request.”
Also, CMA CGM, joined Mediterranean Shipping Company (MSC) and Maerskline in suspending the controversial Peak Season Surcharge (PSS) slammed on Nigerian-bound cargoes.
The shipping line announced that with effect from October 1, it will no longer demand any surcharge from shippers who have goods on board ships calling at Nigerian ports.
The suspension of the peak season surcharge, was contained in a letter sent to the executive secretary/CEO of the Nigerian Shippers’ Council, NSC, Mr Hassan Bello, Tuesday from the Head Office of CMA CGM, in Marseilles France.