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Shippers Council’s move against illegal surcharges by shipping lines

By Francis Ugwoke

The challenges facing Nigerian shippers are too many and from different directions. Apart from the issues of infrastructure in Nigerian ports environment that have impacted negatively on trade facilitation locally, importers have had to contend with the surcharges imposed on them by shipping agents who are acting on the dictations of multinational shipping lines under different conferences involved in the movement of goods from one continent to another.

Although the imposition of surcharges in itself is not out of place as certain situations demand for this, what is worrisome is the tendency for the shipping agencies to fail to vacate them when the need arises.

The United Nations Conference on Trade and Development, UNCTAD, provides for surcharges by liner conferences that are made up on individual shipping lines from different continents involved in the shipment of goods worldwide. But UNCTAD provision makes it clear that these surcharges are supposed to be temporary and subject to cancellation when the situation is normalized. In the Nigerian environment, there are instances in which shipping lines impose surcharges without justification.

For instance,  in September last year, some shipping lines, including CMA CGM had given the notice to introduce a congestion surcharge of $400 per container. In a notice, the shipping line had said: “Port congestion at Lagos ports, Nigeria, is currently increasing our operational costs and generating severe service disruption for several weeks”. The surcharge was to take effect October 15 last year but for the timely intervention of the Nigerian Shippers Council (NSC).  Yet, the shipping agencies are not done, as they are again drumming for the introduction of more surcharges.

Among the surcharges that have been identified as prevalent in Nigerian ports in different colorations according to the Nigerian Shippers Council (NSC) include   peak season surcharge (PSS); extra risk insurance (ERI)/carrier security fee (CSF) surcharge; congestion surcharge (CS); freight tax surcharge (FTS); operations cost recovery (OCR); low sulphur surcharge (LSS); B.A.F (bunker adjustment surcharge) and C.A.F. (currency adjustment surcharge).

As the ports economic regulator, the NSC believes that most of the surcharges are not justifiable and negative to trade.  The fear being expressed among stakeholders is that the surcharges if allowed to take place, will affect traffic flow of cargoes to Nigerian ports in favour of neighbouring ports in the sub-region.

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The Director, Special Duties, NSC, Mr Tahir Idris said the surcharges are built into the freight costs from parent companies.  He expressed concerns that the shipping agencies often ignore to suspend the surcharges even with the knowledge that the situation which justified their imposition has changed.

Tahir said, ”it seems to be permanently being deployed as it is mostly built into the freight cost from parent companies”.

He complained that while the surcharges are supposed to be temporary and suspended as the situation in the port changes, the shipping lines have maintained a permanent imposition of these fees.

He added, “It seems to be permanently being deployed as it is mostly built into the freight cost from parent companies”.

In a bid to stop the shipping lines from the continued exploitation of Nigerian shippers, the NSC leadership said it will take the matter up with the   Global Shippers Forum (GSF) which is an apex association of shippers’ councils all over the world.  As a member of the African Shippers Council (ASC), Nigeria will report the matter first to its parent body which will then take up the matter to the GSF. The Forum has a way of checking the excesses of shipping lines operating in different continents of the world.  Speaking on the surcharges, the Executive Secretary, NSC, Mr Hassan Bello described them as unjustifiable.

Bello said what is worrisome is that even incidents of piracy that have nothing to do with Nigeria are given different colourations in what is targeted at placing a surcharge on cargoes coming to Nigeria. He assured that the Council will continue to fight against this to save Nigerian importers from unscrupulous shipping lines.

“Everything that happens, even if it is in Togo or the Benin Republic, it is attributed to have taken place in Nigeria and they impose surcharges, we shall not allow this”, Bello said.

Ugwoke writes from Apapa

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