PORTS OPERATIONS- FG draws stakeholders’ ire over knee-jerk approach

A recent move by the Federal Ministry of Transport to compel private terminal operators at the ports to transfer cargoes to off-dock facilities after three days of arrival has pitched the Ministry against critical maritime industry stakeholders, who have roundly condemned the Ministry for adopting simplistic, knee-jerk approach to the serious issue of ports operations.
The Ministry’s position announced by the Minister of Transport, Senator Idris Umar, during a meeting with stakeholders in Lagos penultimate week was purportedly aimed at stemming off a non-existing port congestion.
A shipping agent, Mr. Jide Ajibola, stated: “Some people are obviously misleading the Minister. What port congestion are they talking about? There is no port congestion anywhere. How can people sit in the coziness of their offices in Abuja and, without bothering to make any research, jump to the conclusion that there is port congestion?”
Ajibola, who is also a clearing and forwarding agent, fingered the Presidential Committee on Port Reform led by Special Adviser to President Goodluck Jonathan on Performance Evaluation and Monitoring, Prof. Sylvester Monye, as allegedly being behind the ill-advised recommendation.

Ajibola said: “Monye is not a maritime industry person. He doesn’t even understand the industry; neither does he understand what port operation is all about. He doesn’t even understand that there is no port congestion. All I see is desperation on his part to do the bidding of bonded terminal operators.”
SHIPS & PORTS DAILY investigation, however, revealed that the Presidential Committee has not met for over six months, indicating that Monye’s recommendation is not the recommendation of the Committee which has eminent maritime industry operators as members.
The National President of a leading freight forwarding association, who did not want to be identified, described the Minister’s order as “ill-timed, ill-advised and unworkable.”
The leading freight forwarder said that there is no congestion at the ports, due to, according to him, low volumes and a lull in importation since last year.

On his part, National President of the National Association of Government Approved Freight (NAGAFF), Mr. Eugene Nweke, said that the Minister’s order may sound idealistic, but is certainly “not friendly”.
Nweke said: “Taking a critical look at the present concession agreement, what Monye is directing is rather a breach.”
Apart from these concerns, there is also the issue of who bears the cost of transfer to the off-dock terminals and the real reasons behind the order to transfer since there is ample space at the ports.
“Transfer to terminals outside the ports will simply add to the cost borne by the consignee and by extension, the cost of clearing,”Ajibola stated.
SHIPS & PORTS DAILY recalls that bonded terminals, also called off-dock terminals, gained ground in Nigeria, especially in the Lagos area, in the 1990s.

Inefficiency at the ports pre-concession spawned these facilities.
They were set up to take pressure off the main ports and reduce congestion caused by the inefficiency of the Nigerian Ports Authority (NPA) in cargo handling operations.
In the effort, cargo and Customs related activities were shifted from the main ports to the off-dock facilities.
At the height of port congestion in the 1990s up till 2006 when terminal handling operations were passed on to private companies; government – through the Nigeria Customs Service (NCS) – licensed the bonded terminals to serve as palliative.

Like many initiatives in Nigeria, their operations were abused.
Serving Customs officers used their privileged positions to secure licenses using some clearing agents as fronts.
The facilities became enclaves of corruption.
There was no standard for licensing them neither were standards set for their operations, creating a free-for-all situation.
Containers that were supposedly under Customs escort grew wings while transiting from the main ports to the bonded terminals.
Government was short-changed of huge revenue as Customs officers colluded with agents to perpetrate all manners of fraud.
However, the story took a different turn in April 2006 as private firms emerged as port terminals operators, as the circumstances that gave rise to bonded terminals no longer exist.
Private terminal operators came along with efficiency, thus eliminating the need to send boxes to facilities outside the ports.
Most off-dock terminals have not invested in modern container handling facilities and processes, relying largely on the same old and dilapidated equipment to run their operations.