University don faults Shippers Council’s ‘new port order’

A lecturer at Lagos Business School (LBS), Pan-Atlantic University, Lagos, Dr. Frank Ojadi, has faulted the new port order announced by the Nigerian Shippers Council (NSC).

NSC’s Executive Secretary, Hassan Bello had stated that the nation’s  seaports should have a template and standard tariff system that will reduce cost of doing business in the ports by 30 to 40 per cent.

NSC argued that with a unified tariff system for all service providers, it is envisaged that Nigerian ports would be attractive, noting that the new order includes a platform for which every stakeholder would integrate.

However, Ojadi questioned if the NSC planned to fix tariffs that would be uniform in all the nation’s seaports, international land borders and airports.

He wondered whether this ‘new port order’ would not remove one of the principal factors in intra-port competition among local ports.

“How would the neighbouring ports we compete against react given that this action of fixing tariff will negate the spirit of market economy the Economic Community of West Africa States (ECOWAS) sub-region is keen to introduce?

“How would a uniform tariff system work given that the port operators made different levels of investment? For example, the APMT recently-commissioned inspection facility as part of this investment, the cost of which may have to be paid from the revenue generated from their core activity. What was the input, if any, of the terminal operators into the determination of this new tariff? How would one describe this form of economic regulation – rate of return, price cap, revenue cap, yardstick or some locally developed model?”

As part of the so-called new port order, NSC had said every container arriving the nation’s ports would be scanned at the point of discharge from the ship before being moved away for stacking.

“Are the scanners correctly positioned or do they have to be moved to the shipside? Will there be a cost to this scanning exercise and if so who will bear it? Pre-discharge-from-vessel scanning requires investment in scanners such that no vessel waits for scanner before the discharge of cargo commences. Any delays in vessel discharge due to unavailability of scanners will attract additional cost to importers. This is certainly a long term activity not one envisaged in the near future.

How does this form part of economic regulation?” Ojadi queried.

On the belief that the new port order will also assist importers in early clearance of their goods as the delay in scanning often suffered by the importers is eliminated at the early stage, the lecturer said NSC seemed to have forgotten what will be the effect of 100 per cent scanning on the physical examination regime.

The don argued that if the current scanning regime (which only targets a sizable fraction of the total) is fraught with delay, what is going to prevent the same sort of delay when all containers are to be scanned?

He noted that the policy of scanning containers as they are being discharged did not put into consideration the fact that in the ports where it is already operational, there is no 100 per cent scanning of cargoes or 100 per cent physical examination by Customs.

According to him, “Do ports like the ones in Rotterdam, The Netherlands; Shanghai, Peoples Republic of China and elsewhere in the developed world carry out 100 per cent scanning? I am aware of Saudi Arabian port that scans a sizable portion of imports ostensibly to check against the importation of alcoholic beverages and also, the ports at Trinidad and Tobago.

“Others do not scan up to 50 per cent of cargo. Why do we need a risk management system for Customs if almost all the containers are scanned and presumably the scan results are given to the Nigeria Customs Service (NCS)?

“Does the NCS have available the manpower to examine the scan records before the containers leave the ports?”

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