Our dead shipping companies

Ships & Ports Daily newspaper carried a stunning report last week that no fewer than 80 per cent of shipping companies owned by Nigerians have either completely shut down their operations or were barely struggling to survive.
According to a survey carried out by the leading national maritime publication, out of 12 indigenous shipping companies surveyed, only two can be said to be operating viable businesses while the 10 others, representing 83 per cent of the companies surveyed, are either completely dead or are in comatose condition.
The companies sampled in the survey conducted recently include Equitorial Energy, Oceanic Energy, Morlap Shipping, Peacegate, Pokat Nigeria Limited, Al-Dawood Shipping, Potram Nigeria Limited, Joseph Sammy, Genesis Worldwide Shipping and Multi-trade Group all in Lagos; Niger-Delta Shipping in Warri, Delta State; and Starzs Investment Group in Port-Harcourt, Rivers State.

Ironically, all the shipping companies surveyed in Lagos are either dead or struggling to survive while the ones in Warri and Port-Harcourt are thriving.
A visit to the business premises of the 10 shipping companies, according to the report, revealed that the once thriving ventures have completely lost their glamour, with most of them owing staff salaries of up to one year.
The companies, which the General Secretary of the Indigenous Shipowners Association of Nigeria (ISAN), Capt. Niyi Labinjo, described as “struggling heavily”, have mostly downsized and are operating with less than 20 per cent of the workers they had about two years ago. All the companies are also heavily indebted to banks and are mostly unable to service the loans they took to buy ships.
Labinjo, who is also the President of Al Dawood Shipping, said that most of the ship owners have resorted to selling their landed properties to enable them service their bank loans, while others have lost prime properties to the banks.
The companies also owe their crew arrears of salaries ranging from six to 14 months, while some have sold off their vessels.

Genesis Worldwide Shipping, which was once seen as a thriving indigenous shipping company just four years ago, has completely gone under with not a single ship to operate.
The company, at its peak less than five years ago, had six ships.
The same fate, according to the report, has befallen Joseph Sammy Nigeria Limited with one of its staff describing it as “almost dead”. The only vessel left in the company’s fleet, MT Kemepade, was stolen recently. The ship was taken to a ship breaking yard in Ghana and the breakers were about to commence work on it before the owners found out. The case is in court in Ghana.
Borrowing Labinjo’s words, I must say that the situation is indeed pathetic. The report, published on Monday last week, should worry every right thinking Nigerian; especially those Nigerians saddled with the responsibility of developing and encouraging indigenous participation in the shipping sector.
Chairman of the Indigenous Shipowners Association of Nigeria (ISAN), Chief Isaac Jolapamo, was the first to raise the alarm over the hardship confronting Nigerian ship owners.

Chief Isaac Jolampamo, sometimes in February this year, had said that many Of the shipping companies owned by Nigerians were suffering untold hardship as a result of illegal activities on the nation’s coastal waters and the domination of the Cabotage trade by foreigners despite the Cabotage law.
Jolapamo noted that these foreign companies, most of which are operating illegally have gradually succeeded in driving their local counterparts out of business. He said the local shipping fleet was being systematically depleted as a result of lack of jobs for the vessels. Jolapamo said that his own company, Morlap Shipping, which had six vessels 10 years ago had only one left by February 2013.
Since the story broke last week, I haven’t heard of any response from the Nigerian Maritime Administration and Safety Agency (NIMASA), the agency saddled with the responsibility of developing indigenous tonnage and of implementing the Cabotage Act.

Some industry experts have claimed that the dire straits in which the indigenous shipping companies found themselves are traceable to the non-availability of jobs for their ships to execute.
The situation, according to industry analysts, is compounded by the trio of poor implementation of the Cabotage Act, non-disbursement of the Cabotage Vessel Financing Fund (CVFF), and lack of implementation of the fleet maintenance and repair subsidy by the Nigerian Maritime Administration and Safety Agency (NIMASA).
The question therefore is, what is NIMASA doing about this development?
Does anyone know or should we just wait until all the shipping companies collapse before we start asking questions?

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