Chief Increase Uche, NAGAFF President.
Story by Dili Utomi.
TERMINAL OPERATORS ARE WITHIN THEIR RIGHT TO ASK FOR RATE REVIEW- Uche.
Chief Increase Uche is a freight forwarder of repute, he has vast experience within the sector spanning several decades and he is currently the President of the National Association of Government Approved Freight Forwarders (NAGAFF). In this interview he gave a frank assessment of the situation within the Maritime sector of the economy and he did not pretend that all is well for the various professionals operating in the system.
Question: Good afternoon sir, could you introduce yourself please?
Answer: My name is Chief Increase Uche, the national president of NAGAFF.
Question: The recent increase in terminal charges by the operators is generating so much reactions everywhere, we would like to have your own reaction as an operator within the maritime space and as one who leads an Association within the industry.
Answer: Well, to me I am actually aware that none of the terminal operators has increased there charges, what was sent were proposals from two different terminal operators. One from Five Star Logistics and the other from the Port Terminal Multiservices Limited (PTML), these were sent to the Nigerian Shippers Council (NSC) who are still looking at the proposals.
Question: If eventually the proposals scale through, what would be your reaction Sir?
Answer: Well, they are entitled to review their charges either upward or downward, then again, it has been long now since the last increase and considering the economic reality at the moment where every other price is going up because of inflation, the exchange rate and the general high cost of living too, the added cost of insecurity and the need again to further modernise the ports and terminals which calls for more investment in infrastructures, the deployment of technology in various areas, then if these are their reasons to want to increase their rates, it is incumbent on the NSC to look at the proposal and and either approve or disapprove them. So, no freight forwarder or shipper has any right to intervene, but if the shippers council sees their request as meriting review, it is solely their responsibility.
Question: Sir, opponents of the proposed increase point to the exploitative tendencies of the terminal operators and the shipping companies where they make various charges and deductions as reason enough not allow any increase at the moment as this will ultimately hurt the consumers, what do you think about this fear sir?
Answer: I do not see their move as inappropriate. The terminal operators approach the NSC and the NSC will now carry out a thorough review of their request using the criteria already set, then from their findings they will also look at the possibility of asking the shipping public to gather the bill and so also the relevant stakeholders. To me, it is not unusual and I do not think that there should be any interruption in their demands. What is needed is that shippers, that is importers and exporters should get value from the payment that they are making. What we should look at is improved services, reduction in delays in cargo dwell time at the ports, generally a user friendly environment in terms of Port operation. So right now even as the port industry authorities were looking at lower cost of doing business there is a new normal brought about by the effects of covid-19 and the lock down associated with the extra shipping charges. Looking at these, the increase or review of terminal charges may not be out of place. The only area we should be looking at is which terminal deserves the upward review? To my own experience in terms of the investigation I carried out while doing my business at the ports, I discovered that it is only Grimaldi that is the PTML that would seem to merit any kind of review when you consider the level of efficiency which can be called moderately ok in terms of Port operation. They have been able to deploy end to end technology in the clearance of goods process. Most of their operations in the area are automated.
Now, the major area where I see a problem in the entire flow is the Customs operation where we need to ensure that there is a smooth interface with the terminal operators in terms of connectivity so as to reduce delay and to ensure real time cargo delivery. Whatever the shippers council finds relevant to grant an increase in charges to the PTML, we will support, but I don’t think that others deserve any upward review because their operations need to be reviewed.
Question: Sir, from what you have just said, it looks like the concessioning of the ports has not really achieved its aim in terms of the value added, in terms of the cost and the efficiency within the system as you have given the thumbs up only to one out of many terminal operators?
Answer: Yes, I want to believe that that is what I have said. The major reason why the Federal Government concessioned the ports was to bring down the cost of doing business within the ports, make the ports user friendly, create operational efficiency, open up the ports for business and then of course increase the government’s revenue.
The activities at the ports have continued all these years, but we have not seen most of these objectives playing out, so there is need for the government to carry out a review of all the activities at the ports. I understand that before now there was no thorough monitoring of what the ports operators where doing which was against the concessioning agreement. The government has to find out if these people are really doing what the agreement says, they should call the freight forwarders as the people who are on ground and have us work with them to do a thorough job of looking into these activities. To me, from all indications we not have achieved the aims for which the concessioning was carried out, all we are seeing is mere propaganda from government agencies about an imagined fact that the waiting time has improved, that the cargo true put has gone up and that the ports are now efficiently run, but we know that the ports have been more congested than ever before and that cargo due time is not less than 14 days on the average and the local shipping charges are going up rather than down and so many other contending issues. The good thing is that as soon as the NSC came as the ports economic regulator, the shipping companies and the terminal operators became tamed because before the year 2011, they were making arbitrary rate increase. You will observe that in the past six to seven years no shipping company or terminal operator increased rate because of the NSC and that was one good thing that happened and so every right thinking human being should understand when they ask for a rate increase, but again it should be approved for only the meriting terminal.
Question: What would be your advise to the Federal Government as the problems in the entire gamut of Port operation seems to have somehow become intractable?
Answer: Well, one area that the government needs to work on is the deployment of technology in the entire chain of Port operation, they should do it like Ghana over there is doing, now once technology is deployed, it will help efficiency and human interface will be reduced so that the documentation and the clearance process will be enhanced, then you look at the other areas like the logistics, I think that the truckers are making too much noise as they are not supposed to be overheating the system. They want to be involved in the electronic call up system and they want to control traffic, if you go to some of these other West African countries, you will see that a trucker does not have much say, you are simply hired to move cargoes and then move.
Again, the government needs to separate the areas for wet cargo from that of the dry cargoes as is done elsewhere and then look at the laws that set up the agencies of government within and around the Ports and whether they are operating optimally or whether they are just there as government entities, the laws should he strengthened to give the necessary impetus for the agencies to carry out their responsibilities. How do we make the ports more efficient and attract more investment and how do we make those diverting their cargoes to start patronizing our ports, the proper things should be put in place and the government should also review their policies. The government’s fiscal and monetary policies as they concern the maritime sector should be looked into like the CBN policy on the 41 banned items, it has really affected business, it has not achieved the aims for which the CBN restricted them, it has now thrown up issued where you can never get the clearance process right. Importers an their agents will always use some other items to deceive the banks and then open form M and at the end of the day these forms M that were fraudulently opened are used in obtaining the PAAR for cargo clearance and this will later become evident, the Customs are not helping matters. The government agencies, service providers as well as other stakeholders are all doing things on their own so the laws that are supposed to guide the general public in terms of service are not being observed and every one is watching the other person without a clear direction.
Question: Sir, would you then support the clamour for a maritime affairs ministry since you opined that there is no proper coordination and again to grow the industry much bigger than it presently is?
Answer: The Ministry of Maritime Affairs, hmmm, NAGAFF was the first to suggest a maritime commission and also a Customs commission and the advocacy for all that, but the issue is that the ports remain under the Minisrty of Transportation posses no problem, but then which agency do we see as the lead agency, we need to know which is the lead agency at the ports as all the agencies are justling as each wants to outwit the other and no one wants to work with the other. I think that the Shippers Council should be the rallying point as they have shown to be able to handle their responsibility as was the case during the covid-19 pandemic lock down and I think that this is an area that the government should look at.
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