90% of port transactions will be done online by March 2021, says Bello
The Executive Secretary, Nigerian Shippers’ Council (NSC), Hassan Bello, in this interview with SULAIMON SALAU and ADAKU ONYENUCHEYA, highlights the lessons from COVID-19 and how seaports are positioned for better efficiency in post pandemic era.
How much has coronavirus pandemic affected Nigerian port operations and what lessons have we learnt?
We are still gathering the data, but there would be deep reduction in throughput because of disruption in international supply chain. The government revenue will suffer. Of course, the issue of the pandemic compounded the traffic situation going by the poor access roads to the ports. These have brought distortions to the system. If you are to send a 20 feet (ft) container from Apapa to Ikeja, it costs about N800, 000. This is not the reality; it was caused by the disruption; the reason being the time wasted on the road.
Before now, a truck driver could make at least two trips in a day, now he does it in a month and that has brought disruption. This is not usual, it is abnormal and that is worrisome.
Because of the traffic chaos, the efficiency of the port is affected. Before now, we used to have good turn around time for ships, but now ships spend up to 50 days before they come. The reason being that the port is clogged, the yard occupancy is up to average of 80 percent. That means there are limited spaces to stack cargoes because we don’t have the road to get them out.
These, in the last three months, have been our problems and we have been discussing with so many people to see how we can make the ports more efficient than they are now. However, this is a temporary thing.
The COVID-19 had brought a lot of things for us to look at and we have learnt lessons right from day one.
At Nigerian Shippers’ Council we kept the ports open and we filled the gaps and restored normalcy. We try as much as we can to do the twin job of keeping the port open and containing the pandemic, which is no easy task.
However, the ports were open, but not optimally, things are turning round now and I hope these dark days of distortions will go away, the reason being that the infrastructure is being looked into. Now we have finished two important roads: Creek road and Liverpool road. We are looking at Mile 2 – TinCan Island roads. If that is done it will give us some respite.
Secondly, we are experimenting with multimodal approach for evacuation and delivery of cargoes from the port. We are experimenting with the train, the Shippers’ Council is working with Nigerian Ports Authority (NPA) to ensure that these things are done and we think we will have about four trips delivering and removing empty containers and also taking out laden containers from the port by rail.
For every trip, the rail line will remove about 38 trucks from the road. Then we have the barge operations, although it is currently there, it is not moderated and then NPA and shippers’ council are working to see that we have regulations as far as barge operation is concerned.
You will see that we are getting and delivering cargoes from ports, not only by road, which account for about 90 per cent. Now, we want to do the percentage and see the train taking maybe some percentage, then inland waterway also taking some percentage.
The effect of this is that we will have more efficient ways of delivering cargoes. The more important thing is that price will come down because there would be competition.
It is a combination of many things – the infrastructure, modern road traffic management, which will include electronic call up, that NPA is currently working very hard to install and Lagos State government is very important and proactive on this.
So we hope we will see a lot of things coming up soon.
Talking about cargo evacuation by rail, how is the Kaduna inland dry port doing in terms of operations?
It is also the same. The Kaduna dry port is supposed to be serviced by rail, but the rail capacity has not been optimal and we are having discussions with the Nigerian Railway Corporation (NRC), we have about 40 wagons, which will serve the dry port of Kaduna, but we have seen rise in exports through Kaduna.
Export of commodities, like ginger and other agricultural products have increased. We are calling on Nigerians and we have talked with the Export Promotion Council to make the dry port the centre for export. When we mean export, we mean processed products, we don’t export just anything, it has to be processed goods so that we create a chain of employment and infrastructure. The whole issue of export is another question all together because Nigeria must export, otherwise we will be in trouble.
Ports users are lamenting high cost of doing business at the port. What are you doing to address this?
The Nigerian Shippers’ Council has tried to keep the cost of doing business low. There has never been an increase as far as we are concerned at the terminals or shipping companies. We have tried to reduce these costs at all times, because we meet regularly. But in a distorted economy informal things will usually crop up as they said. For example, how will you imagine spending almost a million naira to take cargo from Apapa to Ikeja. This must be a distortion occasioned by bad infrastructure and bad traffic management.
I know they are groaning now, but we are looking effects of these things. The moment we fix that, you will see things coming to normal and I am happy the Federal Government is aware of this and even the traffic would disappear once we have rail and electronic system in place.
Everybody comes to ports now, but once electronic system is introduced, it will make sure that you are only invited to Apapa when you have either cargo to deliver or pick up at the ports.
About 5, 000 trucks are always on the road, we don’t need to have all these 5, 000 trucks clogging the roads, we need only 2,400, including the tankers.
That is the essence of these reforms because people are just coming to Apapa unnecessarily. It shouldn’t be so, and it has to be restricted at a time.
So, the issue is that we have to give priority to export. Those trying to export sometimes stay two months without getting access to the port and Shippers’ council has intervened and it’s a bit faster now. We could do a little bit more because some of the exports are perishable, some are weather and temperature sensitive and we need to look at all these things.
But we are working and coming together with the agencies every month to assess the situation. It is helpful because we meet to harmonise, we have to synchronize our positions to see how we can help this economy.
How are you preparing for the post-pandemic period, going by the lessons learnt so far?
We are not looking at the problems but solutions and one of the things was coming together of the Shippers’ Council and other organisations to form the maritime task team during the lockdown.
One lesson is that we could come together and this is what is happening now, where the maritime agencies are now collaborating to resolve issues. There must be harmony and then you have to synchronise and come together, there should be a lot of that.
The second lesson is that we now know we can operate 24 hours, because at that time, the NSC reached to the Nigeria Customs Service (NCS) and the banks and make them to open their branches especially in Apapa.
The Shippers’ Council reached out to everybody, including the Army, Navy among others. The task team of Navy and Customs ensured there were evacuation of cargo on Saturdays on Sundays. This is what Shippers’ Council was able to do. So, it means we can have 24 hours operations.
However, there are lots of challenges. We have found out that we have only about 60 per cent digitisation of the ports, which means many people go to the ports to transact business physically. Now, we are going to work with others to eliminate that. We have already carried out some research since that time to see what are those things involved. Some transactions are done manually, some are done electronically, and some are both. We are now working to see that we change that, for example, going to collect invoice at the ports. Why will you go to the ports to collect invoice when this transaction could be done electronically?
Another is going to the ports to look for rotation numbers or even the expected date of arrival of vessels. These are minor things that you sit down in your office and do. So we are going to eliminate that and we hope, I am talking about all the other agencies that we are working together with the banks and Customs to see that by March next year (2021), 90 per cent of transactions are done online.
We have to work with the agents of the Shippers Council, the freight forwarders and the shippers themselves. Once we do that, we take off the pressure of physical presence and then we remove corruption because corruption is another major problem at the ports.
Look at the truck drivers, they have always been harassed, intimidated and extorted, so this should not be done.
Like I have said, technology is that light that will throw away the darkness. So once we shed the light of technology at the ports, you will see the rats and insects will run away and we have good system and we are determined at the Shippers’ Council, especially now that we have the respect of the shipping companies, terminal operators and our sister agencies.
It is good that heads of maritime agencies are now collaborating, but efforts at achieving single window has been dragging. How far have you gone with the single window idea and when is it likely to come alive?
Single window is also the ultimate digitisation of all the processes, one-stop shop, where you have all the transactions in one place. It will make the ports efficient. For example, reduction in the number of forms you fill. The efficiency of the port determines when a shipper brings his goods through a ports. We want shippers in all of Central Africa and West Africa to make Nigeria the hub, but how will the hub be without efficiency?
It is an economic decision of the shipper, the shipper nominates in the Bill of Laden or any transport document what port he wants his goods to be discharged or loaded. Some people will say they want to go to Cotonou or Lome, but it is an economic decision.
So, we look at dwell time and it’s not comparable, when other ports are doing seven days, we are doing 21 days average. But we are pushing. So all the indices are not lost on us, we want a situation where we have five days waiting time, but then it does not alone even on the efficiency of the terminals, it depends on the road and the infrastructure.
At the Eastern ports, you will see what the NPA is doing and this is splendid to have patronage of the eastern ports. NPA has cut down that cost, it incentivises shippers and that is what to do.
The other issue is security and the ministry of transportation is working with NIMASA on the project of security. It is ongoing. In fact, a lot of assets, aircraft and some gadgets have been received now. I think there is a very bright future when many of these impediments we have talked about will disappear.
You have won the Peak Season Surcharge (PSS) challenge that the shipping companies introduced, so where are we going from here?
Let me first correct the impression because I can see some headlines that it is the Shippers’ Council that did it. It is not the Shippers’ Council alone. That is the product of synergy. That is what we have learnt from COVID-19. The private sector was at the Shippers’ Council, freight forwarders, NPA and everybody was here and said we can’t afford to pay this PSS.
Besides, it is not democratic, it is unfair trade practice, it violates international norms because even in the restaurant, you are given a menu before you order and there is a cost. So, if you eat, you do so according to your pocket. But here we are, oblivious of anything that is happening, we were not contacted and we have the power of the cargo, after all, what are the ships and ports without cargo?
Cargo is the primary thing in international shipping, yet it is the interest of these cargoes that is unrepresented.
We cannot go on like that and that is why we called all the people together and said, we have to challenge this, it is an international thing, you cannot impose unilaterally and arbitrarily these charges.
We have been able to get two or three of them being very reasonable and we have just got a letter from the headquarters of one of them.
The next thing is to talk about other surcharges, because this is what is making shipping costly, like what you call war risk clause that is imposed on Nigerian cargo whether there was incidence of robbery or not and we pay a lot.
About four or five years ago, the Shippers’ Council became the ports economic regulator by executive fiat without legislative backing. How easy has it been dealing with matters concerning litigation, especially in areas of enforcement of policies on defiant stakeholders regarding tariff and others.
I don’t agree with you that it needs legislative backing. Regulations are always made as by-laws and I would have agreed with you if you had said they might have more force, but a regulation was made pursuant to the Act.
Section 3 of the Nigerian Shippers Council Act 1978 says it allows NSC to act on matters relating to structure of freight trade, that is tariff, availability and adequacy of shipping space, we have to look at the ships and see what space they have in and out.
We will also look at the frequency of sailings, terms of shipments. I am talking about the contracts of freight or the Bill of Laden and other documents.
It also talked about class and quality of vessels; so we had to look at the vessels coming, are they in class? Are they insured? What is the quality? Can we just bring any ship to Nigeria? No! But we can’t have rust buckets come into Nigeria, we have to look at the qualities.
And then port charges and the facilities, so these are regulatory powers given to Shippers’ Council as far back as 1978, so it is not new that we have regulations to look at that, but I agree with you that the work of Shippers’ Council is not a popularity contest that you win because of your beauty.
You can see how busy we have been. I tease the bosses of my agencies, telling them that they are local, one is restricted to the ports, the other is to see how many kilometres, meanwhile you are just in the rivers.
But, we are in the ship and in every mode. From the time cargo is put on a ship, at the port of loading, we have to track what happens to the cargo until it is delivered to the final consumer.
And in-between this, there are interest here and there, as well as conflicts, so it is not been easy. I know we have distortions, people will say we didn’t go and arrest people, we can’t be arresting or shutting and sealing places because this is a commercial atmosphere, we have investors who came to Nigeria to invest. They could have gone to other climes to invest.
We have Nigerians who own terminals, we have to support them, we have our freight forwarders and truckers, but we have been very agile, we know what we want, it is not a romantic thing. We will make sure that maritime contributes significantly to the Gross Domestic Product (GDP).
We are aware you are already dealing with the issue of container deposits and you are looking at adopting an indemnity system. Have you found the indemnity system viable in that regards?
Collaboration is important because we have been talking with the Nigerian Insurance Commission, the regulators of the insurance industry and all we are saying is in 2017, about N17 billion was taken as deposit for containers, it was N15 billion in the previous year and it is going to rise higher. Why don’t you release this money for more productive venture, other than deposit?
The deposit is default revenue for everybody because what it means is that when you don’t return your container in four days you lose your deposit or part of it.
But how will you return your container when the road is blocked? It is really no fault of yours, so this is discriminatory; it is against equity and justice.
It is not an economic thing and it is only happening in Nigeria and some other two countries. We have to change that, instead of depositing N200,000 for container deposit, you better give insurance N200 and the insurance will make sure he delivers those containers by any means necessary.
This is economic fatigue, we are going through a tedious over things when we could have a simple way of doing things and that is not applicable only to shippers, even the shipping companies who have the assets, (the containers), they would love to do that.
They employ so much labour in looking at these things, their finance and administrative departments and the conflicts, that’s is what we are solving.
About 20 per cent of the complaints we are solving are on container deposit. I can’t return the container and it is not my fault. The condition must be conducive for me to be able to… You have frustrated the contract, so I cannot perform my obligations, so why will I be charged for that and so on? We are working on it, but we have to come to the shipping companies, the terminals, the Customs, that is what the committee is doing now.
The committee has two weeks to submit its report, they have already met with specific economic sectors, they will also meet with the organised private sector and so I hope we would have meaningful determination of this soon.
Many years ago, the Council started campaign for a change in terms of trade between Nigeria and other countries. Few days ago, NIMASA took up that campaign. Are you in synergy with NIMASA, and as a country what are the gains from such change of terms of trade?
There has always been synergy even before now. I remember attending a meeting with Dakuku Peterside, the former NIMASA Director General and we talked about Free On Board (FOB) contract, which means it is the buyer oversees who will dominate his vessels, all we do is to have the production and handover to them. We discuss that with NNPC. Also because of what we have been discussing, now NNPC has opened a small window, which we hope will be better.
For the FOB contract, Nigeria, I think among the OPEC countries, is only one selling right products.
FOB means the seller will use the buyer oversees who will come with his ship and take the crude away.
You can imagine what we miss. We pay about N700 billion in freight over this, imagine that amount coming into the country. Imagine Nigerian ship owners operating such vessels and somebody is saying they have no capacity. It is not true, it is just that they don’t have that opportunity.
Over the years, the NNPC or the oil sector has been saying that it is risky and that they don’t want the risk because budget has already been done. But you have to venture. Nothing ventured, nothing gained.
Why wouldn’t we carry our own? Saudi Arabia, Angola, Iraq and many of this have their own vessels, they carry cargoes and that is what we should have. If we do that it would have tremendous impact on our economy, our insurance companies will be involved, our banks will be involved and so many other things. I am happy that the DG of NIMASA is hurrying up to see that this thing is done.
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