NAGAFF: How NPA’s directive on suspension of demurrage payment is causing confusion at ports


The National Association of Government Approved Freight Forwarders (NAGAFF) has traced the origin of the confusion in the port industry in the ongoing lockdown of Lagos, Ogun and FCT by the federal government to the notice issued by the Nigerian Ports Authority (NPA) announcing the suspension of demurrage payment for a period of 21 days.

It will be recalled that the General Manager Corporate and Strategic Communications, NPA, Jatto Adams had on the 27th March, 2020 issued a statement announcing the suspension of storage fees popularly known as demurrage on all consignments for an initial 21 days period with effect from 23rd March, 2020.

The statement further said, “This gesture is in recognition of the pressure that the COVID-19 pandemic imposes on businesses, the responsibility imposed on the Authority to relief this burden on its customers as well as attaining the objective of the Federal Government’s Ease of Doing Business Policy at this trying period.

“The Authority recognises the financial implications of these policies on the terminal operators and will consider a shift in our operational charges to ameliorate the situation of stakeholders.”

However, the terminal operators have come out to say that the directive by the NPA was a mere directive as they had not been communicated to by the NPA on the matter hence their continuing charging of all the applicable fees.

Speaking on this development in a telephone interview with our correspondent on Wednesday, the National President of NAGAFF, Chief Increase Uche noted that the freight forwarders saw the publication by NPA as a welcomed development as they were going to enjoy 21 days free storage charges before the presidential directive also came that mandated that the port should be operational under order 42.

Uche observed that the presidential order making the ports in Lagos to remain operational now made it compulsory that freight forwarders must be on duty to ensure that cargo were not allowed to remain at the port.

He said, “So, as that order was given on the 29th of March, the relevant agencies of the government started trying to find out where and where the Presidential order affected them. They have now accepted their own operation because the issue has to do with remaining at home which means that there is a total lockdown, that people should not move. But on a second thought, industry experts discovered that if the port would remain operational, it then means that freight forwarders in particular and then truckers need to be at the port.

“Customs also issued their own statement that they are not locking down, that they will still be on duty, meaning that those who have businesses to do with customs should come forward and follow up their transaction. So, the situation became so dicey. While the terminal operators still beckon on the port users to come that their terminals are open, NPA too told us that the ports are open. So, if NPA has to issue a circular removing 21 days waiver on storage, at the same time the port is still operational, how do you manage the two conflicting statements?

“NPA issuing that notice mandating the terminal operators to give waiver when the terminals themselves are now saying that they have not seen any circular and they are at work. If they are still operating, claiming to leave their gates open for customers to come and pick their cargo and at the same time, you are forcing them to give 21 day free storage, how do you then justify that order?”

The NAGAFF President recalled that there had been a methodology of negotiating waiver or concessions if there was a lockout arguing that “right now, we don’t have any lockout, what we have now is lockdown on movement of persons, the port is still operational, there is no lockout, the terminals are open for customers to come in and pick their cargo and transact their business.”

“In the normal sense, under port operation, if there is a strike or a lockout whereby the owners of cargoes could not get access to the cargo, there could be discussions on how to go about waiving accumulated storage charges but the shipping companies where demurrage accrues, there is always a clause in the bill of lading rule that provides a level playing field that demurrage should not be charged within that period when there is a lockout. So, the conflicting issue here now is terminal operators are now saying that they did not lock anybody out to come and pick cargo, but technically, the government has locked down the movement of people, meaning that you cannot come out of your house to access the port.

“Now, the real issue that keeps raising dust is the waiver on these 21 days demurrage. The problem there now being the fact the NPA refused to recognize that once an order is given and it is not obeyed, it turns to ridicule, it can even compound issues that are already on ground because the freight forwarders will now misconstrue this very 21 days waiver to mean that they shouldn’t come to work, that within the period that they were not able to attend to their jobs at the ports, there will be a waiver. But contrary to that, the ports are working, terminal operators are there, shipping companies are also meeting up but the banks have been the problem.

“What the ES of Shippers’ Council was trying to do is to manage the situation created by NPA because you cannot issue order to terminal operators that they should waive certain days for freight forwarders when you have not negotiated with them. So, Shippers’ Council came up to say that yes, it is possible for these people to waive but we have a procedure being the Economic Regulator of the industry. So, what that is trying to open up is the gap between the two agencies of the government that there is need for them to synergize instead of working at cross purposes. But I am aware that even Shippers’ Council is always ready for any dialogue for the maritime industry to move smoothly unhindered”, he said.

Uche who is also a member of Governing Council of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) pointed out that as a freight forwarder, he would want to enjoy the waiver on his cargoes but regretted that the issue was that the ports were still operational contending that “if the ports are still operational and every other organs of the ports are functioning, there is no need for you dwelling on the waiver by NPA as it will amount to speculation when you say you want to leave your cargo because waiver has been granted.”

Asked if he is of the opinion that NPA should counter its earlier statement on demurrage suspension, he said, “They shouldn’t counter, what they should do is to go out and have negotiations so that the terminal operators will see reasons for them to grant waiver because the terminal operators are not keying in. But since the government wants them to waive and then in waiving those days, the NPA has already mapped out a strategy to also reconcile that through the charges paid by the terminal operators.

“Now, the SGF issued a letter in response to the letter by the National Council of Managing Directors of License Customs Agents to his office clarifying the fact that they cannot give incentives to clearing agents, that they should abide by the notice the NPA had issued. So, what is that that NPA issued which is not enforceable unless negotiation is initiated in order to make that enforceable?”

Meanwhile, attempts by this reporter to get a reaction from the Nigerian Ports Authority (NPA) was unsuccessful as calls put forward to the General Manager, Corporate and Strategic Communications, NPA, Engr. Jatto Adams was not answered nor was it returnedas at the time of filling this report.

Photo: National President, NAGAFF, Chief Increase Uche.

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