Shipping companies to suspend demurrage for 3 months, says Task Force chief

Shipping companies to suspend demurrage for 3 months, says Task Force chief

Starting December 1, 2018, multinational shipping companies operating in Nigeria will suspend the collection of container deposits and demurrage from importers, says Chairman of the Presidential Taskforce on Apapa Gridlock, Commodore Okon Eyo. 

Container deposit is demanded by shipping companies from importers as a guarantee for the return of their empty containers. The deposit is expected to be refunded once the empty containers are returned.

Commodore Eyo told SHIPS & PORTS DAILY in an exclusive interview in his office in Lagos that the decision was part of resolutions reached after a meeting with the shipping companies, the Nigerian Ports Authority (NPA) and other stakeholders to find lasting solution to the perennial gridlock in Apapa. 

He said the shipping companies agreed to suspend collection of demurrage on empty containers for three months from December 1 to February 28, 2019.    “The shipping companies are not bothered. To them, the longer you remain on the road, the better for them. So the truckers are dashing to the port because they want to reclaim their money, which is understood.

“All over the world except Nigeria, when you import a container and you clear it out to go and unstuff your goods, it is not expected that the customer should take the container back to the port. Shipping agencies are expected to have holding bays scattered most times in the outskirt of the built up area to take their containers and in a reasonable society, the containers are likely going to come by rail back to the port.

“I have had uncountable number of meetings with these shipping agencies. The last meeting we held; I told them while we are pursuing government and other efforts to try to ease off (the gridlock), we will need to do something quickly to address the problem.

“I am not infringing on their commercial procedures but this is an emergency. It is only by the fact that it has not been declared but what we have at hand is an emergency and in emergency, certain decisions have to be taken. I have to tell them that it is not so much a favour from them; it is all about justice. It is about we coming together to resolve a common problem.

“All the trucks that are lying up on the road are taken technically to have arrived destination but if the shipping companies do not receive the first person, the second man cannot enter. So it is not the truckers’ fault that the shipping companies are not receiving the empties. In fact, they are supposed to be paying the truckers on the queue but we don’t want to go into that so it will not be like we are fighting.

“The truckers are dashing down to the port because of the demurrage, so I told them they will have to suspend collecting demurrage at least for three months from these people so that they do not have the disincentive of being driven to the port at the same. If we suspend the demurrage, I will call the truckers and tell them: you don’t need to worry about going to recover your money because nobody will take your money.

“I wonder what kind of business they (truckers) are doing that they will be losing all of that money on demurrage. That is not the only loss; the man that is driving the truck cannot go anywhere as long as he is bearing the container and many of them are being paid based on turnaround. Now, he is sitting in queue for weeks. How much money is he going to make in a month when he has not even done a trip? The person who owns the truck, no money; the man that has the container is paying demurrage every day. There are losses everywhere for the greed of one organization,” he said.