Shippers’ Council and push for efficiency at Nigerian Ports

To attract more ship and cargo traffic to Nigerian ports, which would translate into more revenue for the country, the Nigerian Shippers’ Council (NCS) has been putting processes in place to curb corruption and ensure a more efficient ports operation. In this report, ONYEDIKA AGBEDO tracks some of the Council’s recent giant strides

Although the global shipping environment is generally perceived as one fraught with fraud, the Nigerian Shippers’ Council (NSC) as the ports economic regulator is leaving no stone unturned to ensure that international best practices are maintained in the country’s ports. This is evidenced in some of the initiatives so far introduced by the current headship of the Council led by the Executive Secretary/Chief Executive Officer (CEO), Emmanuel Jime, who assumed office in July 2021.

In December 2021, five months after he mounted the saddle, Jime had after studying activities at the ports, unveiled his agenda which included full implementation of the International Cargo Tracking Note (ICTN); completion of construction and commencement of operations of at least four Inland Dry Ports (IDPs) and at least two Vehicle Transit Areas (VTAs); operation of two Border Information Centres and operation of an Empty Container Insurance Scheme or Guarantee Scheme.

He had also said that the NSC would collaborate with the Federal Competition and Consumer Protection Commission (FCCPC) and shipping companies to institute a Consumer Protection Regime in the maritime industry and sign a Memorandum of Understanding with shipping companies towards alleviating the challenges faced by consumers of shipping services.

Jime also said that the NSC under his watch had introduced new innovations that would be implemented during his tenure. The new innovations, which he unveiled, included the development of a “software application to enable shippers to obtain from their handsets, shipping and logistics information, such as shipping news, trade statistics, port charges, rotation number of vessels, local shipping charges, terminal charges and lodgment of complaints.”

On ports regulation, he stated that the NSC would “strengthen regulatory framework and the need to develop a modus operandi for regulation; strengthen enforcement mechanism; standardise processes and procedure, resuscitate the Cargo Defence Fund and make it operational within one year, upgrade the Port Service Support Portal (PSSP) to make it more robust, as well as establish Export Desk at designated loading centres for export.”

Industry observers had commended these initiatives, as they are targeted at curbing some fraudulent practices perpetrated by shipping lines and their conference liners involved in the movement of goods from one shore to another. An example of such malfeasance is the Gross Registered Tonnage (GRT) of vessels, which simply means the volume of space available for cargo, passengers, crew and stores. The GRT of vessels in many cases could be tampered with either by the ship owner or captain and his crew.

This happens when the actual tonnage of goods on board is under-declared to the port management to attract less dues. In some cases, a full shipload could be declared as half load in local terms by the captains and their crew. In doing this, they present a fake manifest that is totally different from what the real load is.  But that is at the international level.

At the local ports, the shipping service providers, including terminal operators, also have ways in which they try to cheat shippers. This could be by introducing arbitrary charges under any name or falsifying the time of arrival of the ship, which determines when the dues to be paid become effective.  On the other hand, the shippers, known as the importers or exporters, also have their own ways of circumventing the system to maximise profit. This could be through under-declaration of their imports, concealment or under-invoicing.

Most times, officers of the Nigeria Customs Service (NCS) discover such but some unscrupulous officials of the Service also ‘take their own cuts’ and pave the way for the continuation of the fraud. Thus, the main task of the council as the ports regulator is to check such fraud to protect the revenue accruable to the Federal Government.

Part of the measures that have been introduced by the Council to check these sharp practices include the introduction of the National Port Process Manual (NPPM), which gave birth to the Port Standing Task Team (PSTT).

The Council is heading the PSTT, which in a bid to ensure an efficient ports system, has been waging war against elements of corruption in the system. The PSTT has made it possible for a joint inspection of vessels arriving at the ports instead of individual inspection by different agencies of government, a practice that was prone to extortion. Before now, the scenario was that each agency boarded every vessel to inspect it.

The PSTT has also dismantled illegal checkpoints around the ports environment by some government agents, including those of the Lagos State government who in the process extort tanker and truck drivers.

In June last year, the council announced that the PSTT had saved the nation’s economy vessel demurrage of $6, 540, 000 (N3.27 billion) between 2020 and 2021 in the joint vessel boarding executed by government agencies.

Jime, who made the disclosure in Lagos, had said that about $20,000 was saved daily.
The NSC had also disclosed that it has reduced the average time for resolving complaints with regards to vessel infractions from about 10 days to between one and four hours, just as more than 85 per cent of vessels that called at the Nigerian ports in 2021 left without any incident, which was not the case in the past.

According to industry sources, in 2020, shippers lost over N47 billion to payment of demurrage to shipping companies alone, which was aside from the monies lost to payment of storage charges to terminal operators for the delay in taking delivery of consignment as and when due.

The huge yearly loss, experts say, was due to over-reliance on manual processes and procedures in cargo clearance at the ports, which the NSC has been able to address extensively through its insistence on automation of processes.

About three years ago, the council had revealed that service providers had attained between 50 to 90 per cent level of automation, with PTML BUA and Grimaldi identified as the companies leading in the innovation.

However, following the efforts by the current leadership of the council, most of the shipping companies have nearly attained 95 per cent automation level. The push for automation, according to the Council, is to check the incidence of human contact and the associated corrupt practices it breeds.

Jime has continued to insist that most of the global ports, including that of neighbouring countries, are digitalised, hence Nigeria cannot be an exception.

The NSC has also heightened its periodic equipment audit exercise to ensure improved efficiency at the ports. Thus, officials of the council regularly visit terminal operators to ensure that they deploy modern equipment in cargo handling (off-loading/uploading of containers and other cargoes) as well as positioning containers for examination by Customs officers and others.

Currently, the NSC is developing a Port Community System in the country. Former Minister of Transportation, Alhaji Muazu Sambo, had assigned this role to the council in February this year during a visit to its headquarters in Lagos.

“You are the regulator of the Nigerian Ports Authority (NPA), the Nigerian Maritime Administration and Safety Agency (NIMASA) and other agencies that have anything to do with the port.

“The responsibility is on you to ensure we have a port community system. I think it is because we have not placed the responsibility on somebody that we have not been able to achieve the PCS. We must have a PCS working for us in Nigeria before the administration comes to a close,” Sambo said.

According to the European Port Community Systems Association (EPCSA), a Port Community System is an electronic platform, which connects the multiple systems operated by a variety of organisations that make up a seaport, airport or inland port community. It is shared in the sense that it is set up, organised and used by firms in the same sector – in this case, a port community.

“A PCS provides for the electronic exchange of information between all port and logistics sectors and is acknowledged as the most advanced method for the exchange of information within a single or national port community infrastructure. A PCS has the ability to act as a National Single Window or to integrate into a National Single Window, which European Member States are developing in response to recent Directives and policy from the European Commission. A PCS is therefore pivotal in the Single Window concept and will reduce duplication of data input through efficient electronic exchange of information,” the association further explained in its online manual, How to Develop a Port Community System.

The main purpose of the PCS is to enable secure and intelligent operational data exchange and consolidation within the port network.

The council could not deliver the assignment before the tenure of the administration ended last May 29, but it was learnt that it has finished studying how the PCS works in other climes and has begun developing one for the country. Although it is not yet clear when it will accomplish the project, there is increasing optimism among stakeholders that when finally delivered, it will intermix with the other initiatives of the council to enthrone a business friendly ports system in Nigeria as obtainable in the global environment.