Operators Holds Divergent Views On CTN Regime At Ports

Stakeholders Back Tracking For National Security
The introduction of Cargo Tracking (Note), which is expected to provide accurate statistics on inward and outward items in the country, has attracted divergent views among stakeholders. The introduction has made shipping companies to drop war risk charges, Ebola and congestion charges on Nigerian bound cargoes.

The Nigerian Shippers Council, the promoter of the scheme, said on every 20 and 40 foot containers coming into the country, the carrier will pay $25, and $10 on every unit of vehicles, while every ton of crude being shipped out of the country will attract a charge of $0.1 just as all conventional and groupage goods shipped into the country will attract a charge of $1 per freight.

The shipping companies have made fortune from Nigeria due to the non-existence of indigenous shipping companies; to the extent they have been collecting administrative charges as a component of freight charges on goods, without offering any service, besides the congestion, ebola and war risk charges they have been collecting.

The Nigeria Shippers Council had said the marginal charges should be paid by shipping companies from the administrative charges they have been collecting from shippers for doing nothing. It assures shippers that the cost would be borne by the carriers, which have collected several billions of Naira from Nigerians for many years.

Industry stakeholders said they are in support of the introduction of the CTN, because it will enable the government have a single window of statistical data collection for accuracy of quantity and volumes of inward and outward cargoes, including oil and gas cargoes in the country.

According to them, there is a high degree of under-declaration of wet and dry cargoes by shipping companies and shippers, which had hitherto made it impossible for government agencies to collect actual tariff on inward and outward goods, even when shipping firms have been smiling to the banks with their actual freight collection.

The stakeholders, however, believe that except the government puts its feet down on the matter, the highly coordinated beneficiaries of the current regime, particularly, the service providers, are likely to advance strong arguments, backed by intimidation to frustrate the CTN dream.

The Chairman of Ports Consultative Forum, Otunba Kunle Folarin, said CTN is the best innovation at the ports in recent times, adding that it would enhance revenue collection capacity of the government without any negative impact on shippers.

I am not making a case for cargo or load tracking; but,we are just analysing the issue. Let us start by looking at the antecedents: you must recall that there was a time there was massive over-declaration of cargo, just to have access to foreign exchange. But later, things changed, and, there is presently massive under-declaration of cargo so that the importers can pay lower customs duty. The under-declaration, you must appreciate, is in terms of quantity and value

Government brought in Pre-shipment agents and Pre Arrival Assessment Report (PAAR) to tackle over-declaration and under declaration of cargo. The question now is: has the problem disappeared? No. The next question is, who are the losers, when cargo is under-declared? The first person is the Nigerian Ports Authority, which must collect less royalty for its harbour due and cargo handling dues.
“But now that you have concessioned the ports, the concessionaires would not allow anyone to get away with it, since they do their own tally by themselves and definitely know how much goods you are bringing in. But then, the terminal operators can however, under-declare the cargo because they pay royalty to NPA; from whatever they declare as discharged. So, there is always an issue of over-declaration and under-declaration.
“So, what those promoting Cargo Tracking Note are saying, and which must be noted is this: there is a problem of under declaration of cargo, both in terms of volume and value. By value, Customs loses.  And by volume, NPA loses. But cargo tracking will show the actual quantity carried.”

Continuing, he said , “If under-declaration of cargo is checked, government revenue would rise because customs duty would rise.  If under-declaration is checked, the NPA royalty would increase because the whole cargo would be paid for, even if the shipping companies do not declare it.”

Reviewing the CTN scheme, he said, cargo tracking could check under-declaration because the information on cargoes would be a true state of reality, which can be checked against the background of cargo manifest from the shipping companies.
“ Once we know the history of our background, then we must understand we only need to do this, so that history do not repeat itself.
And to me, it does not matter whoever is anchoring it; be it the NPA, NIMASA or Shippers’ Council. What matters is that Nigeria must have it in place. These are the most important issues to consider. There is a problem; and we cannot continue to ignore it or sweep it under the table. If we keep sweeping it under the table, government would also continue to lose revenue.”
Folarin therefore urged the Government to flag it off, without further delay, because of its benefits, especially as the promoter has reaffirmed repeatedly that the cost will be borne by shipping companies, as part of freight component already paid for by shippers.

The founder of National Association of Government Approved Freight Forwarders (NAGAF), Dr. Boniface Aniebonam, however took it from a broader perspective, noting that the ultimate gainers of CTN would be the common man.
“In actual fact, there is not going to be real additional cost. On the contrary, it is going to save Nigeria a lot of money,” he said. He said if shippers pay peanut to ensure a successful implementation of the CTN, Nigeria, particularly, the masses would be the overall gainers.

There is a racket, a fraud going on presently. The cargoes coming into Nigeria are being over-billed by way of freight rates.
You know, sometimes stories are concocted. For instance, they may say there is Ebola in Nigeria; and the next thing is they put Ebola Rate; or there is Boko Haram in Nigeria and the next thing they put War Risk rate. They may cite the example of Niger Delta; and then, the next thing is they will increase their rates on goods coming into Nigeria.

But experts are coming in now, to say no, there is no war in Nigeria. Boko Haram is only in the North East and has nothing to do with the cargo in Lagos. And so, all these charges you are raising, we are not going to accept that. Of course, there is a global body that is expected to look after these issues of shipping operations, involving the conference liners and all that; there is a body that oversees them-to ensure that they do not actually act outside the laws. So, when you find something like that against them, you can actually report them.

So, in actual fact, there is no additional cost. On the contrary, the CTN is expected to ensure that cargo coming into Nigeria are within the appropriate rate of duty or freights; other than the fraudulent aspects of the freights by their carriers.”
Continuing, he said, “As for the common man you are talking about, let us look at it this way: if you have been paying $10 for instance, for a 20ft container from Hamburg to Nigeria, and if, with this cargo tracking device, managed by experts, it becomes possible for you to now pay $7; If by so doing, they save us 3x or $3000 and from which the experts takes 25% or $600, would the remaining $2000 plus not revert back into the system. So, that way, it cumulatively adds so much to Nigeria. The prices of goods would fall, if not initially; but overtime, as a result of competition.

Secondly, it enables the Government to directly reduce the cost of doing business in Nigeria; because you have successfully reduced the ex-warehouse cost. The price would reduce because the Ex-wharf cost has reduced.  You are in competition with others; and that is where the instrument of market forces come in”
The frontline freight forwarder said the CTN regime would also help the government in its security arrangement at the port, as it will check the importation of dangerous goods, including arms

The need for security of the port was the first major reason for load tracking. It is in the overall interest of the ships and port environment. You know what all that means. So cargo-tracking note is still a process of its own in the course of profiling cargo entering into a country. It is to know what is actually coming into a country. The advanced countries use it to identify and ward off enemy goods at a distance. On that note, some call it offshore tracking.  The philosophy is to ensure that ‘before they hit you, you know where they are’. So, cargo-tracking note is still a part of that process.

But the National President of Council of Managing Director of Customs Licensed Agentts, Lucky Amiwero, said, in his recent open letter to President Muhammed Buhari, that CTN is unnecessary because the Advanned Cargo Tracking Information of the World Customs Organisation and the Pre- Arrival Assessment Report introduced two years ago by the Nigeria Customs Service are already performing the same function intended by CTN. He also argued that it would compound the multiplicity of charges at ports.
Other stakeholders, who spoke on the matter, said although the Nigeria Customs Service introduced PAAR, the scheme is not effective, as shipping companies and shippers continued to either under-declare or over-declare goods to evade tariff payment