Last week, the Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala-Usman, read the riot act to terminal operators over the huge number of overtime cargoes and empty containers in the ports. In this report, OLUWAKEMI DAUDA looks at the reasons the Federal Government needed to decongest the ports
The Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala- Usman did not hide her feelings last week, at the Lagos seaports over the huge number of overtime cargoes and empty containers littering the ports.
Speaking after the inspection of the terminals to contain the spread of Coronavirus pandemic, she said the number of overtime cargoes and empty containers in most of the terminals had became worrisome to the Federal Government and the agency because of its ripple effects on port operations and the economy.
Cargoes are classified as overtime when they have stayed at the ports for more than 30 days without clearance and delivery. Investigation conducted by The Nation revealed that overtime cargoes and empty containers now occupy over 40 per cent of the terminals in Lagos.
The Managing Director said the issue of overtime cargo, improvement and provision of cargo handling equipment must be addressed by the terminal operators to bring efficiency to the port. “That is why we have stated it clearly in our revised concession agreement that where the terminals don’t improve on their equipment, there will be sanctions. I think sanctioning is what works cross the world because people must be sectioned, if they are not doing their work and we are ready to sanction any terminal that fails to follow our rules and regulations,” she said.
The MD said the agency has directed terminal operators to give 14 rent-free days to importers, to enable them clear their cargo during the lockdown. Also, to address the port congestion, she said the Nigeria Customs Service (NCS) has agreed to fast-track the clearance of over 1,800 overtime cargoes.
She said the NCS had inspected 400 of them and that they were being moved to the Federal Government’swarehouse at Ikorodu. “We have discussed with the Nigerian Customs Service (NCS) and they have given approval for 400 containers to be cleared and moved out of the port to the federal government overtime cargo warehouse at Ikorodu. That is the same across the board for all terminals.
Why we are calling on all consignees to come out and collect their cargo, they should also be mindful that some of these cargo that are considered overtime are been moved to Ikorodu bwhere they will be auctioned in line with the guidelines stipulated by the NCS.
“The issue of overtime cargo, the issue of improvement and efficiency and cargo handling equipment is across the board. That is why we have deployed clearly within our revised concession agreement metric where for every time terminals don’t improve on their equipment there will be sanctions. I think sanctioning and penalties is what works cross the world because people must be sectioned if they are not doing their work, “she said.
Stakeholders call for sales of overtime goods
Stakeholders have called on President Muhammadu Buhari and the Federal Executive Council (FEC) to order the Comptroller-General, Nigeria Customs Service (NCS), Col Hameed Ali (rtd) to auction the goods and free up the Lagos ports. Findings revealed that there are over 1,800 overtime cargoes and more than 2,000 containers at APM Terminal in Apapa that must be moved out of the port to free up the space. The situation is almost the same in most of the terminals visited by the paper. Stakeholders, who spoke with The Nation at the weekend, appealed to President Muhammadu Buhari and FEC to join hands with the NPA in directing the NSC to auction the overtime cargoes as provided in the Customs and Excise Management Act (CEMA) and the terminal shipping firms to return the empty containers to their base.
An exporter Mr Gbolahan Ajetunmobi, said: “The Customs Service is empowered by law to auction overtime cargoes to free up the space in the port and recover government revenue. Not auctioning those cargoes that have been in the port for more than a year does not serve the best interest of the people, government and of the operator. ‘’I appeal to President Buhari to direct the Nigeria Customs Service to free up the space in the port by auctioning those overtime cargoes to bring efficiency to our port. Over N30 billion goods are rotting away at the port and the Federal Government is not doing anything about it.”
The National Vice President, Association of Nigerian Licensed Overtime Agents (ANLCA), Dr Kayode Farinto, confirmed that over 2000 cargo-laden containers worth billions of naira have been abandoned by some importers. Findings revealed that overtime cargoes occupy over 30 per cent of the terminals in Lagos.
“Containers with very valuable items are not claimed for almost two years. This, to say the least, is very disappointing. This, to some extent, is irresponsibility on the part of those who are supposed to do the needful. “The Federal Executive Council (FEC) must ensure that the Act that established the Nigeria Customs Service (NCS), which has also prescribed a procedure for disposal of overtime goods and seized cargoes, is complied with. The only way to dispose the overtime cargoes is captured in the Act.
“Whatever that is defined in the Act is what should be done. It is the responsibility of the government to ensure that our ports are free of overtime cargoes and empty containers. We are talking of how to boost the economy and multi-billion naira goods are rotting.’’
Overtime cargoes
Before the ports were concessioned about 15 years ago, the issue of overtime cargo was rife. The NCS has the power to auction any cargo, which spends over 90 days at the ports without being cleared.
Before the concession, such cargoes could be found at any port and they stayed until the owners were ready to clear them. The demurrage was small then, and the owners could afford to play with time. Some importers falsified the date the goods arrived at the ports to reduce the demurrage.
But this changed when the terminal operators took over the ports. Any importer who delays in clearing his goods pays heavy demurrage. In some cases, some terminals have been accused bof causing delays to create more room for the cargoes to stay at the ports and attract demurrage. But agencies- owned containers could be granted waiver on the intervention of the government.
A senior Customs officer, who craved anonymity, said the failure to clear them after a year might be as a result of bureaucratic bottlenecks in government departments. ‘’Some importers may have lost interest in clearing them because of the cost involved.
‘’Sometimes, an importer may decide to forget some goods if the clearance will lead to more losses. This is when some trade goods enter overtime and accumulate more demurrage that clearing them will be expensive. The worth of overtime cargoes in the ports within and outside the Lagos ports is over N30billion.
“There is no doubt that the importers, particularly those who own the goods that are under prohibition list, may no longer be interested in the goods apparently because there is no way they can move them out of the port because of the eagle eyes of security officials at the ports.
“Also, there are some goods that have lost their value as a result of time. Although it is the duty of Customs to auction goods, the experience has been that only items that are valuable were sold off as quickly as possible to some highly placed Nigerians in the past.
“This does not appear to have been the same trend since the tenure of Col. Hameed Ali (rtd) as a Customs boss. And the reasons are obvious. A highly placed source said Ali cannot carry out auction sales because he would need the approval of the Minister of Finance and that is why the president and the FEC must give an instruction to the ministers of Transport and Finance to ensure that the overtime cargoes are auction in no time.’
Why importers abandoned cargoes
Investigation shows that many importers abandon their containers for various reasons. An importer, for example, may run out of funds to clear his goods. This often leads to more demurrage. Some cheat the government on any consignment.
In the process, they lose the goods as they are not able to settle the issue within the time allowed to clear the goods. Paying the amount on the Debit Note and the demurrage on the goods could be difficult. Some importers resort to bribing to buy the same goods at auction from the Customs.
It does not appear that such arrangement exists under the change mantra of the leadership of the Customs. Some importers even bring in prohibited goods, which are seized and left to rot at the ports.
NPA sources said there is hardly any port where there is no overtime cargo because of the unwholesome attitudes of importers.
Way out
Worried by the huge overtime cargoes, stakeholders said it was time for the Ministry of Finance to act.
A clearing agent, Mr Segun Ogunsanu, said the government should take stock of such items and empower the Service to auction them. Ogunsanu said this would help decongest the areas where the goods were kept.
Another freight forwarder, Mr Sunday Albert, advised importers to shun any fraudulent practice that is responsible for seizure of goods at the ports. He added that importers should be on top of any situation when their goods arrive to ensure that they are cleared on time before entering demurrage and overtime status.
The Chairman, Seaport Terminal Operators Association of Nigeria, (STOAN), Princess Vicky Haastrup, called on the government to intervene on the matter, saying if the issue was not tackled on time, terminal operators would be running their business at a loss.
Haastrup said because there were many laden containers at the terminals, the space for empty containers had be taken over. He explained that terminal operators make more money when they have more space for containers.
She stated: “Let the Nigeria Customs Service auction these overtime cargoes because they occupy commercial spaces at our terminals. ‘’If that is taken care of, we can dedicate a large space for empty containers. Right now, because our members have so many laden containers, there is a limit to the number of empty containers they can take.”
Also the President, National Council of Managing Director of Licenced Customs Agents (NCMDLCA), Lucky Amiwero, said there was the need to ensure that overtime cargoes were transferred from the ports to government warehouses to decongest the terminals and bring efficiency to the port.
Provision of scanners
An importer, Mr Yekinni Ibraheem said scanners should be deployed to the ports because it takes between five and six minutes to examine containers using scanners but physical examination takes over five hours at our port.
“When you enter the port, you will see that there is a slow process. These are what we want the Federal Government and its agencies to look at. What happens at the terminals has effect on the congestion we see at the ports and the gridlock on the roads leading to the port,” he said.
