Shippers and freight forwarders have called for the scrapping of the container deposit refund system in Nigeria, proposing its replacement with a Goods-in-Transit (GIT) insurance-based model that would ensure greater accountability, reduce financial strain, enhance trust in the shipping process and align with international best practices.
The port users also stated that the proposed insurance model would promote ease of doing business and help reduce the persistent bottlenecks plaguing Nigerian ports.
They described the current container deposit system as exploitative, outdated and a major contributor to port inefficiencies.
While the Nigerian Shippers’ Council (NSC) had previously emphasised that container deposit refunds should be processed within four days – or, at most, one week – many freight agents still wait for months without receiving refunds, and no interest is paid on the withheld funds.
Former Acting National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, decried how some shipping lines have turned container deposits into a lucrative venture at the expense of importers and freight forwarders.
He stressed that many companies hold onto these deposits for months, using the funds for private gain while withholding the interest owed to the original payers.
Farinto explained that the existing system enables shipping companies to withhold container deposits for extended periods, often beyond a month, effectively using shippers’ funds for private gain while withholding the interest owed to the original payers and without accountability.
He said in the last four years, freight forwarders and shippers have been battling with the Nigerian Shippers’ Council on this issue, calling for the use of insurance certificates or premiums to replace container deposits.
“Goods-in-Transit (GIT) insurance can effectively replace container deposits. Shipping companies can ask freight forwarders or logistics firms to present a GIT policy that covers their operations for a year. If a container isn’t returned, the liability falls on the insurance company, which in turn deals with the operator responsible,” he explained.
The Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria (APFFLON), Tin Can Chapter, Clinton Okoro, decried the exploitative practices of some shipping companies, noting that, in some cases, excessive demurrage charges are imposed weeks in advance.
Okoro recounted a personal experience in which he had to challenge an inflated bill issued by a shipping company for 10 containers.
He revealed that some stakeholders have already initiated legal action against certain shipping lines, including the Mediterranean Shipping Company (MSC).
The House of Representatives Committee on Public Petitions had summoned the chief executive officer of Swiss-based shipping company MSC Nigeria Limited, over extortion, and unfair trade practices in Nigeria among others.
Also speaking, the Secretary General of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Festus Ukwu, emphasised that for the effective management of empty container returns, every shipping line operating in Nigeria must establish an empty container depot.
He proposed that all discharged containers be returned through a unified container deposit centre, from where they would be loaded onto vessels returning to their countries of origin.
Ukwu also revealed that stakeholders are working on a new system to end the practice of collecting refundable container deposits from importers and freight agents.
