Prolonged withholding of refunds, including container deposits and overcharges, remote cargo release authorisation, speculative or projected demurrage billing and local unauthorised container diversion, among other sharp practices, cost the country an estimated over N1 trillion yearly.

This is contained in a white paper released by the Sea Empowerment and Research Centre (SEREC) titled, ‘Sharp Practices, Regulatory Capture Risks and Systemic Failures in Nigeria’s Shipping and Ports Ecosystem’, prepared for national discourse and policy action and addressed to the National Assembly, Minister of Marine and Blue Economy, Executive Secretary of the Nigerian Shippers’ Council (NSC) and maritime industry stakeholders.

The document, signed by the Head of Research at SEREC, Dr Eugene Nweke, identified that prolonged withholding of refunds, often delayed for three to four months or longer, tie down tens of billions of naira yearly as interest-free financing for shipping lines, depriving freight forwarders and importers of working capital.

The white paper noted that by contrast, global benchmarks in the European Union, the United Kingdom and Singapore stipulate refund timelines of seven to 14 days, with interest penalties for delays.

Another concern in the paper is the practice of remote cargo release authorisation, whereby some shipping lines, despite maintaining full operational offices in Nigeria, trigger cargo release approvals from overseas headquarters.

SEREC said this practice artificially prolongs cargo dwell time, escalates demurrage exposure and creates extortion-prone delay windows, with each additional day of delay costing Nigerian shippers an estimate of between N3 billion and N5 billion system-wide.

The paper also criticised speculative or projected demurrage billing, where two weeks or more of demurrage is imposed upfront regardless of actual delay, thereby distorting cash flow planning and increasing import financing costs by an estimated five to 10 per cent.

Other practices highlighted include unauthorised container diversion or stemming to ports other than the contractual destination without shipper consent, imposing unplanned transfer and handling costs of N500,000 to over N1 million per container, in contrast to the Hague–Visby Rules that treat unauthorised deviation as a carrier liability.

The paper also criticised the introduction of arbitrary charges without cost justification, service benchmarks or clear regulatory approval, warning that opaque pricing enables price gouging and undermines competition, in contrast to the global benchmark in the EU Port Services Regulation that mandates transparency and stakeholder consultation.

The research centre further estimated that Nigeria’s ports process between 1.5 million and 1.8 million twenty-foot equivalent units (TEUs) yearly, with the Apapa port complex accounting for more than 60 per cent of containerised trade.

The paper’s conservative financial estimates noted that incremental and often unexplained shipping line charges of between N150,000 and N250,000 per container impose a yearly cost burden of between N225 billion and N450 billion on the economy.

According to the paper, these charges are layered on top of already high logistics-related costs, which now account for 30 to 40 per cent of landed import costs, directly contributing between 0.7 and 1.2 percentage points to Nigeria’s headline inflation.

Also, the paper highlighted that operational disruptions, delays and artificial bottlenecks are estimated to cost the economy an additional N500 billion to N700 billion yearly through inefficiencies, demurrage, storage and lost productivity.

According to SEREC, these figures demonstrate that the issue is macroeconomic and not sectoral.
The white paper goes beyond operational inefficiencies to raise governance concerns, including allegations of regulatory capture through political lobbying and boardroom influence, weak follow-through on legislative oversight outcomes, notably the absence of publicly released committee white papers following hearings of the formal petitions against Mediterranean Shipping Company (MSC) and other operators.