20 shipping firms leave Nigeria over low business
• Dockworkers groan under threats of $7b cash call, deficient import policies
• 300 workers sacked, Maersk reduces crew by 400
Groaning under intense hardship imposed by poor government policies and global economic crunch, over 20 shipping firms have exited the nation’s shores.
This is coming as Dockworkers Union of Nigeria (DUN) lamented that over 3,000 workers have already been laid off by various shipping companies, terminal operators and logistic companies, owing to lack of financing and poor import policies of the Federal Government.
The workers also blamed the massive retrenchment on the inability of the Federal Government to meet its joint venture obligation with the international oil companies which are major partners with the marine logistic companies.
Some of the companies that have already made an exit include Mitsui O.S.K Line, Nippon Yusen Kasha, Taiwan’s Evergreen Line, Messina Line, Hapag-Lloyd and Gold Star Line (GSL), among others which were forced to withdraw from the West Africa route due to growing losses as a result of declining volumes.
The President, Dockworkers Union of Nigeria (DUN), Anthony Emmanuel Nted, yesterday bemoaned the poor state of the ports, terminal and work environment in the maritime industry.
Nted revealed that about 20 shipping firms have left the shore of the country because of low traffic occasioned by government importation policy.
According to him, Nigeria as an import-dependent country cannot suddenly ban the importation of the principal goods being generally consumed in the country.
“Hence, the current government policy on importation though with the best intention seems to be wreaking more havoc on the economy and ought to be reviewed urgently,” he said.
He, therefore, urged the Federal Government to review the ban on the importation of rice, wheat, vehicle spare parts and industrial machinery until the nation is able to produce for local consumption. He added that the failure to do this would encourage smuggling, diversion of ships to neighbouring countries, idle ports, retrenchment of workers, unemployment and general loss of revenue to government.
According to him, some of the employers of Intels and other logistic companies, which render services to the IOCs are being faced with financial challenges and therefore forced to retrench workers.
He said: “The non-payment of cash calls by government to these oil companies as per their joint venture agreements has been a major setback to the funding of the service of our employers (the logistic companies) and consequently responsible for the massive retrenchment of our members.”
But Nted decried the alleged moves by the Nigerian Ports Authority (NPA) to sack a section of dockworkers, tally clerks and onboard security men.
He lamented that the volume of vehicles imported into the country through ports has collapsed to an all-time-low, with the consequent loss of thousands of jobs in the industry.
This was attributed to the duty regime introduced since 2014 and the implication of the new exchange rate for duty calculation, which has made the importation of cars and trucks too expensive.
“In the last two years the number of vehicles in Nigeria has shrunk by almost two-thirds, while the volume of cars smuggled through Cotonou continued unabated,” he said.
Also, the Maersk Supply Service, a part of Danish shipping and offshore energy conglomerate Maersk Group, is apparently adopting austerity measures as it moves to reduce its Offshore Supply Ship Vessel (OSV) fleet by 20 in the next 18 months, even as it plans to reduce its crew pool by 400 offshore positions.
The company said that the divestment plan was a response to vessels in lay-up, limited trading opportunities and the global over-supply of offshore supply vessels in the industry.
The Chief Executive Officer of Maersk Supply Service, Jorn Madsen, said: “We are facing unprecedented market conditions, and regrettably we have to further adjust our crew pool. It is an unfortunate, but necessary step to safeguard the future of our company”.
He said: “One of Maersk Supply Service’s prime objectives is to attempt to restore the supply demand balance in the offshore supply market. This is why the vast majority of the divested vessels will be recycled or modified by their new owners to compete outside their present segments.”
Madsen said as a consequence of the fleet reduction and the flagging of existing project vessels to the Isle of Man registry, around 400 crew members would be made redundant as a “necessary step to safeguard the future” of Maersk Supply Service.
“The decision was taken in an attempt to improve the efficiency of the company and to stabilise the liquidity and cash flows. The redundancy process is expected to be completed by the end of September 2016,” he stated.