…To collaborate with NAICOM on insurance cover, risk management, cost reduction***

Nigerian Shippers’ Council (NSC) on Tuesday threatened to take action against shipping companies, agencies, seaport terminal operators and off-dock terminals over arbitrary charges.

The NSC Executive Secretary, Mr Hassan Bello highlighted this in a statement issued by Mrs Rakiya Zubairu, the Council’s Head of Public Relations, warning that the Council may be forced to ‘bite’, following unending stakeholders complaints, against shipping companies/agencies, seaport terminal operators and off-dock terminals, especially over the arbitrary levy of container demurrage, storage and transfer charges on innocent consignees.

The Council’s management was particularly stirred by the fact that the charges were often, for transportation of cargoes to off-dock terminals, unilaterally initiated by terminals, without the consignees’ consent.

“It should be noted that based on international standard and recognised practice, freight paid at origin covers the movement of cargo to the final port of delivery at destination.

“It follows, therefore, that cargoes earmarked for transfer to off-dock terminals at the request of the shipping company, seaport terminal operator or off-dock terminal, without the consent of the consignees or their authorized representatives, should not attract charge(s) against the consignees,” Bello pointed out, stressing that NSC has resolved henceforth, that all service providers must be guided that import cargo should be delivered to the nominated port of destination as stated in the Bill of Lading.

Apapa port

And, where the operational convenience of the seaport terminals or some other prevailing circumstances necessitate the transfer of cargoes from the seaport terminals to off-dock terminals, the concerned consignees or their authorized agents must be notified in good time.

Accordingly, therefore, they must not be charged the cost associated with such transfer, including barging costs.

“Storage and demurrage charges on cargoes earmarked for transfer from seaport terminals to off-dock terminals, without the consent of the consignee, should take effect only after arriving at the designated off-dock terminals.

“NSC considers this act as unethical and unwholesome.

“Consequently, all transfer charges collected from consignees of cargoes transferred from seaport terminals to off-dock terminals, from June 1 to date, must be refunded to the consignees immediately.

“Those changes were at the instance of the shipping companies/agencies, seaport terminal operators or off-dock terminal operators, and without the consignees requesting for such transfer.

“Failure to refund such charges will lead to the council invoking its regulatory powers to enforce compliance,” she said.

Consequently, and in furtherance of the same objective, the Council, according to Hassan Bello, would also fully collaborate with the National Insurance Commission (NAICOM) for the same purposes of achieving a significant reduction, in the cost of doing business at the ports, particularly through the introduction of insurance cover on containers regime.

speaking in Abuja also on Tuesday when he led the Council’s delegation to visit the management of NAICOM, Bello emphasized that the two agencies would equally look into risk management at the various Ports to ease business.

He said that insurance should be looked at in the area of policies involving goods on transit, accidents, loss, damages in order to move away from religious sentiments that everything happened for a reason.

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He said that the container deposit at the ports is about N150,000 to N200,000 on each container which runs into billions of Naira thereby making supply costly.

He said this was because most of the containers could not be returned within the expected date due to the nature of the roads.

“As our functions as ports regulator, we have our eyes on the cost of doing business in Nigeria, so in the ease of doing business and the cost of doing business, we want to make our ports competitive, we have to moderate the cost.

“One of the costs is Insurance deposits that shippers pay for taking the containers out of the port.

“The containers are the assets of the shipping companies, they must be returned in perfect condition and so they don’t get that because as at the time the containers are not returned, the deposit is not refunded.

“When you return the containers in good time, you collect your deposit back.

“However, that is not as simple as that, access to the port may be difficult and if a container is not returned within a certain time limit, they could be a problem, one loses his deposit or part of the deposit and so the shippers has to forgo the deposit.

“Sometimes the shipping company, even when the containers are returned they don’t pay the deposit in good time and that is money lost.

“So what we are saying is, there are lot of issues like that, that we could have the insurance company come to take care of,” Bello said.

He said that the insurance company could come in to make sure the containers are covered at a lesser cost, to reduce some of the challenges faced by the shippers.

Bello said: “We want a policy on the participation of insurance in container regime, there is a policy on goods in transit of course, we want the policies to cover most of the risk that shippers, freight forwarders incurred including demurrage and rent.

“If this could be covered, that will make shipping extremely cheaper and also Door-to-Door delivery of cargoes, which will be covered by insurance.”

Bello, however, said that in spite of the pandemic the council was working with all other maritime agencies to look into digitalisation of ports to limit the access of physical contact.

He also said that the Kano state government had voted about N2 billion for the structures around Zawachiki Inland Dry Port which had been a concession to Dala Dry Port Nigeria Ltd.

Responding, Mr Olorundare Thomas, Commissioner for Insurance (NAICOM), expressed willingness to collaborate with NSC to make insurance significant in the maritime sector.

Thomas commended the NSC for bringing up creative ideas that would deepen the market of the commission in the maritime industry.

“As far as I can remember this will mark one of the few times that any of our stakeholders will come with developmental ideas that will enhance the thought of the commission on how to deepen the market and make insurance relevant to our daily living.

“When it comes to trading, marine is in the frontline and insurance itself move with trading, insurance started with marine insurance largely before the fire, but marine is quite critical in the history of insurance development.

“With what we have gone through in the country and globally, we need to take insurance more seriously than ever, than what we have done in the past.

“I have listened to you and I have taken note, these are things we must collaborate and work together as agencies of government.

“It is important for us, what we are getting from marine business is not consistent with transaction in the marine sector in terms of contribution to insurance penetration.

“It is almost insignificant but as an economy, we know that is not the true reflection of what is happening in the Marine Sector and I am happy for your creative ideas,” he said.

Thomas, however, said that the commission would look into establishing a committee with both agencies to factor out the modalities on how insurance can be factored in at the Ports to reduce cost of business.