BY YUSUF BABALOLA, Lagos
Nigerian importers have been made to pay N16 billion container deposit fees annually since 2018 by foreign ship-owners, translating to N48 billion in the last three years, LEADERSHIP checks have revealed.
Inside sources regard the payment as a loss and capital flight when, indeed, the importers can insure their containers with local underwriters for a cumulative premium of about N2 billion annually.
The money paid by importers as container deposit fees ought to be repaid to the importers upon returning the containers, but because the containers are always returned four or more days after receipt, of which the delay is attributed to Apapa gridlock, the foreign ship-owners have failed to refund them.
To this end, LEADERSHIP findings showed that the importers, under the auspices of the Nigerian Shippers Council (NSC), is already in talks with the insurance industry regulator, that is, the National Insurance Commission (NAICOM) to ensure that importers cut off this excessive charge, thereby, saving about N14 billion annually in the process.
The negotiations, it was learnt, would be concluded in a couple of weeks after which NAICOM will approach the insurance firms on possible insurance cover for the importers’ containers at a reasonable rate.
If the importer had insured for the last three years, they would have saved about N42 billion which could have boosted their profit margin, investigations further revealed.
However, with collaboration between NSC and NAICOM, the importers are expected to put an end to this arbitrary payment by the end of second quarter of 2021.
Similarly, they are soliciting insurance companies to come into this area to insure the risks involved.
Confirming this development at the weekend, the executive secretary, NSC, Barr. Hassan Bello, explained that in 2018, Nigerians paid N16bn to foreign shipping companies as container deposit fees, with 2019 and 2020 not different from what obtained in 2018.
“We at the NSC are currently working towards the removal of the container deposit fee payment by Nigerian importers. It will be removed very soon. We are currently working with NAICOM to see an end to these arbitrary charges. I also have a committee in my office working on this.
“The most annoying aspect of the whole situation is that through no fault of the shipper, he cannot return this container on time. The shipping companies have not provided accessible holding bays for prompt return of these containers. With the chaotic traffic situation along the ports access roads, in three or two days, the shipper loses his container deposit fees. This is an unfair trade practice,” he said.
Speaking further, he said, “By the end of the second quarter 2021, we would have gotten all approvals to stop the collection of these container deposits. So, by end of second quarter 2021, insurance will come in and the shipping companies themselves will be relieved because they own the containers. In shipping, there are so many insurance risks involved, so we are urging insurance firms to come in.”
On the nature of insurance and cargo claims, he disclosed that N387million has been paid by insurance companies to the claiming importers, adding that “damages to cargo, cargo loss and others should all be insured.
“So we are substituting container deposits with insurance cover. We are also having harmonisation of tariff nomenclature,” he said.
Barr Bello equally disclosed that the council had a meeting with the Organised Private Sector (OPS), which included the terminals and users of port facilities.
We are also setting standards for tariffs at container terminals and monitoring compliance, he said.
The NSC boss stated that the council set standard for monitoring efficiency of terminal operators.
Speaking on this development, former chairman, Apapa Chapter of National Association of Government Approved Freight Forwarders (NAGAFF), Fred Ajuzie, said if insurance companies will indemnify clearing agents or importers on container deposit, it will be a good thing for the industry.
“Though, there will be an underlying agreement between insurance companies and the clearing agents that will make that possible, but it is a good idea for the industry if the Nigerian Shippers’ Council and insurance industries can see this novel idea through,” he said.
He pointed out that if this is done, the underlying benefits between the clearing agents and shipping companies will stop, “but I can assure you that it is an idea that will benefit the industry.”
Similarly, the national president, Africa Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), Otunba Frank Ogunojemite confirmed that shippers see the NSC’s plan as a welcome development, believing that it will not only help importers, but also boost export activities.
Ogunojemite wondered why the shipping lines would receive money from the clearing agents on behalf of the importers but refuse to refund directly to the clearing agent.
He stressed that these shipping firms were illegally holding on to monies as well as enriching themselves from such uncollected funds. He commended the efforts of the Nigerian Shippers Council to end the container deposit regime.