Against the backdrop of threats to boycott the CMA CGM shipping line by some groups over its planned introduction of $400 congestion surcharge, the Chartered Institute of Logistics and Transport (CILT) Nigeria has advised against the move as it will further compound the already bad situation.
The National Executive Director, CILT Nigeria, Mr. Paul Ndibe who made this position known in an interview with Primetime Reporters in Lagos yesterday said rather than boycotting the shipping line or any other one for that matter on the issues, negotiation should take the centre stage to resolve the trade en passé.
According to him,” Boycotting them means congesting the traffic going to other terminals provided you want to take in your consignment from the Nigerian ports. Take for example Apapa, if they raise this surcharge on congestion and you boycott them and then you now move your consignment to other shipping companies that operate at other terminals, you are going to increase the traffic level in those terminals and the congestion will be more because they have closed down one, so you are now transferring the burden to other shipping companies, so, the congestion will be more on the others and which company will want the dwell time to be more than what will be tolerable? Once it exceeds a particular time, there is a demurrage and that demurrage must be paid.
“The way out is negotiation, the way out is for government to tidy up issues relating to holding bays, access to the ports, synchronization of port operations in order to allow both containers and ships and unloading of ships to take place simultaneously”.
Ndibe however noted that it would amount to naivety for anyone to deny that there was no congestion at the port as it was evident that there was congestion as it affects trucks struggling to gain access into the ports on a daily basis.
He said,” Of late, we have heard situations where in the last two months, we have reported about three deaths, casualties from drivers who died while waiting for their turn to get to the wharf. It is also as a result of congestion that resulted to that long waiting.
“So, we have congestion in terms of trucks going to the ports to offload. There may not be congestion on the waterways for the ships arriving but the dwell time of ships are there because there is no space where they can evacuate and go and if they evacuate, they need to take empties away. So, even if they succeeded in evacuating, the trucks that will bring in containers into the port that they will take back may not arrive the port. So, while waiting, they will deny other ships the opportunity to come and berth. So, there is congestion both on the waterfront and on the roads”.
“The surcharge is an entirely different kettle of fish. The trucks going to deposit containers to the ports, the owners of the truck are also at liberty to charge for the dwell time of their trucks on the roads. Some stay upwards of one week, so, if they don’t want to do that for economic reasons and on the other side, the shipping companies, on account of the losses, the demurrage that they pay and they want to also offset that by these charges, we are not going to blame them otherwise who will bear the brunt of the charges. They pay for the dwell time, so who will address that? Of course, it is the shippers; they are in operation because of the need of the shippers, therefore, anything that result from that shipment will also affect the shippers.
He maintained that the congestion could be terraced to the activities of the terminal operators because they were looking at their immediate economic environment not the national economic need.
“Take for example, some of the terminals that have their plants inside the port, they are looking at how to grow their own local economy not the national economy. So, because they have this terminal and it belongs to them, they are looking at their own economic need, therefore, the available space there, either they build warehouse there to suit their need or to build companies inside the port area after all it has been concessioned to them and once it has been concessioned to them, they are going to develop it to suit their immediate need.
“And that was what I said earlier, if these things are under NPA, it would have reserved certain locations for certain operations but since it has been concessioned to the terminal operators, they are now looking at how to grow their own unit economy not the national economy. So, that is part of the congestion”, he said.
On insinuations that the shipping companies being the direct cause of the congestion as a result of their inability to provide holding bays has no moral right to slam the surcharge, he said,” These shipping companies you are mentioning now, they are essentially terminal operators. Look at the scenario under which the terminal operators were granted concessions. They were granted concessions for the terminals that they are operating. Was any holding bay assigned to those land areas that were concessioned to them? Of course not! And the land around the port is limited and it is these lands around the port that is delineated into terminal areas and they have their boundaries across those areas.
“If you go to the port, some of the terminals may have openings to accommodate trucks but their trucks may be far way behind on the queue that they may not just jump the queue in order to come. So, that is the problem. Part of the congestion, I would say was caused at the time of concession because attention was to concession and look at the outcome of the concession, nobody thought of a scenario like this otherwise, if the concession agreement has something to do with holding bays and there were lands to be located as holding bays to each of the terminal operators, they would have come together but the attention was on the port area and then the terminals and that was what was concessioned to them.
Now it is difficult for them because of absence of land in Lagos to acquire areas of land where they will designate as their holding bays for trucks. Even if those holding bays are acquired and they are outside the port areas, they need to truck those containers to their terminals, so, which path will they take? So, it is not entirely the problem of the terminal operators but the arrangement in the concession agreement is to be blamed”.
He therefore called on the federal government to step in and streamline operations as it would affect the Nigerian economy negatively.
“It will affect even the prices of goods because inflationary pressure will go up and it might discourage people from importing. So, my thought here is that government should be able to address and have an easy access to the port and then synchronize the way ships can berth at various terminals so that they give access to those containers going to the terminals that have their ships already and then they synchronize it in such a way that they can strike a balance”, he added.
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