Face -off between terminal operators and freight forwarders: Who blinks first?

Face -off between terminal operators and freight forwarders: Who blinks first?

Chinazor Megbolu

The ding dong affairs between the warring freight forwarders and the terminal operators over the controversial issue of demurrage waivers left much to be desired.

It has left one wondering who wins this dog fight between the service providers and the service buyers.

As the freight forwarders and their principals agitate for suspension of charges on accumulative storage and demurrage, the operators on the other hand; explore every window to maximise profits.

The opposing stands of the two parties have however led to no love lost between two supposed business partners.

The Nigerian Ports Authority (NPA) had given a directive to shipping lines operating in Nigerian seaports to grant waivers on cargoes that were imported into the country during the Covid-19 lockdown

The terminal operators didn’t say or give reasons why they reneged hence the imbroglio that later took place in the port but it is pertinent to acknowledge the tenet of profit in businesses.

The operators had invested into the businesses to make profits and to break even and any policy that will mitigate that purpose will not be easily accepted except there is a cogent reasons for that or at best an alternative.

The freight forwarders last week locked up the entrance doors of one of the leading seaport terminals at Apapa over the failure of the terminal operators to comply with the NPA on demurrage waivers for goods stored there during the lockdown.

The waivers were later extended by another two weeks till April 26 following the extension of the Covid-19 lockdown by the Federal Government.

Some terminal operators had refused to comply with the NPA directive, hinging their excuses on the fact that the terms of the waiver agreement needed to be well documented and deliberated upon by the Federal Government and the operators.

Following the refusal of the terminal operators to grant the waivers, freight forwarders under the five major associations in the sector held a meeting last Thursday with the Apapa Port Manager, Ms Funmilayo Olotu and decided to stop all their members from taking delivery of cargoes.

The National Coordinator, Save Nigeria Freight Forwarders, Dr. Osita Chukwu, in a chat confirmed the position of the freight forwarders as to locking the entrance door to the terminal and preventing agents from going in to do business.

“We have stopped all terminal delivery orders. The terminal operators had complied before but they reversed the waivers, saying that they were going to debit us for all the waivers they had granted.

“They explained that their foreign head offices had queried the waivers,” he said.

Olotu had promised to call a meeting of all the agents, shipping companies and terminal operators on Monday, to try and resolve the conflict but no one knew if the meeting ever took place.

Meanwhile, in this whole brouhaha, the Seaport Terminal Operators Association of Nigeria (STOAN) had remained silent as freight forwarders and customs brokers proceeded on strike.

Then one begins to wonder if all is well with the group.

STOAN had claimed that its members were not  involved in the deliberation even as shipping lines under the umbrella of Shipping Agencies of Nigeria (SAN) have also frowned at the directive of  the NPA.

#COVID-19: Terminal Operators donate N700m to support FG

As importers and freight agents continued to lament the harsh business environment, the terminal operators were waiting for the approval of STOAN to adhere to the directive, which intends to alleviate the burden on port users.

The terminal operators’ stand on this issue is worrisome given the assurances that NPA would grant credit notes commensurate to the rental reliefs granted by the operators to consignees for the free storage period.

The attitude of terminal operators who donated hundreds of millions to the Federal Government in the wake of the lockdown as part of contributions to the fight against COVID-19 pandemic had ignored the critical government directive that would have more economic impact on Nigerians.

Observers in the port corridors describe it as a showbiz disposition on the part of terminal operators.

On his part, the General Manager of Five Star Logistics Terminal, Mr Wolfgang Schneider recently said his terminal couldn’t unilaterally implement the directive.

According to him; “we are doing what other terminals are doing”.

A top management staff at the AP Moller Terminal (APMT) Apapa explained that the terminal had begun implementing the directive.

“I can tell you authoritatively that APMT has stopped collecting storage charges.

“When we started complying shouldn’t be an issue. Anyone in doubt can approach the terminal and find out,” he said.

The question remains then why did the clearing agents decide to lock up the entrance to his terminal if his assertions were true?

However, the President of the Association of Nigerian Licensed Customs Agents (ANLCA) Hon. Iju Tony Nwabunike countered the claims of APMT as well as other port terminals on compliance.

He argued that freight forwarders have been subjected to the most hostile working environment.

“We have been pushed harder than we could cope   but every index has shown that shipping companies, terminal operators and banks aren’t helping matters.

“How would the freight forwarders carry out this essential services the way government wanted us to do?”

“Every aspect of palliative directive from the government have been ignored by terminal operators and shipping companies. Freight forwarders are more than overwhelmed with the challenges at the ports today and the situation has been further compounded by the increase in exchange rate from N326/$ to N361/$,” Nwabunike said.

Furthermore, it didn’t come as a surprise when the National Association of Government Approved Freight Forwarders (NAGAFF) mandated members not to embark on the strike called upon by other associations in the ports.

This is coming few days after some of these associations rejected the financial aid as palliatives doled out by NAGAFF, which goes a long way to show all isn’t well with their unity.

The NAGAFF leadership dissociated itself from the planned strike at the nation’s seaports, while advising its members to allow the Nigerian Ports Authority (NPA) and the Nigerian Shippers’ Council (NSC) to intervene in the issue of demurrage and storage waivers at the port.

In a statement last Sunday, the National President, Mr Uche Increase, warned that any NAGAFF member who chose to be part of any protest at the port is doing so without the mandate of the association and shall be treated as a “dissident”.

“The waivers were a sort of palliatives brokered by the NSC and NPA as a succour to shippers/consignees in order to reduce the effects of the presidential directives on the lockdowns slammed on Lagos and Ogun states as well as the Federal Capital Territory (FCT), and the attendant skeletal services provided by the various parties in the maritime supply chain, at the wake of the COVID-19 pandemic.

“NAGAFF wishes to dissociate itself from the said protest and to warn that any NAGAFF member who chooses to be part of the protest does not have the mandate of NAGAFF and shall be treated as a dissident by the association.

“We also feel and cherish the concerns of the freight forwarders who have been toiling all these period, and incurring avoidable operational risks in rendering services in obedience to the presidential directives in keeping the ports operational as essential logistics service providers,” he said.

Moreover, the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) has described the so-called warning strike carried out by freight forwarders last week as illegal and a threat to the lives of Nigerians relying on the supply chain for their essential goods amid the Covid-19 pandemic in Nigeria.

The Council in a letter addressed to the Presidents of the five registered freight forwarding associations ANLCA, NAGAFF, NCMDLCA, NAFFAC and AREFFN; had mandated the freight Forwarders to reverse the strike action, which it noted could jeopardise government’s effort in containing the Covid-19 pandemic.

According to the letter titled ‘Reversal of Strike Action at the Ports’ and signed by the Registrar, CRFFN, Mr Sam Nwakohu; “we have heard unofficially that a fraction of freight forwarders have embarked on strike action which we consider illegal and a serious threat to the life of teeming Nigerians relying on the supply chain for their essential supplies.

“We want to believe that you understand the urgency of the times we are in and the fact that the Federal Government classifies freight forwarding as essential service especially in the context of COVID-19.

“While appreciating the Federal Government for underscoring the importance of freight forwarding profession, we must not engage in anything that will jeopardise the efforts of government in containing the COVID-19 pandemic as well as sustaining the lives of people.

“Any action obstructing the flow of the essential supply chain at this time may be tantamount to sabotage of a high order. The situation we are in is similar to wartime and those entrusted with ensuring the sustainable flow of life support essentials must be professional enough and ethically responsible in the discharge of their duties.

“If this developing trend is not nipped in the bud as quickly as possible, we fear it may attract serious consequences from the Federal Government and the association’s leadership may be held responsible.

“I, therefore, urge you to act fast to arrest this development by ensuring a reversal of the strike action while we work together to address whatever challenges are confronting freight forwarding at this time. Please bear in mind that the COVID-19 maritime task team comprising all stakeholders is fully on ground to address any complaints affecting COVID -19 operations at the ports”.

The freight forwarders, however, defied this directive by embarking on the strike action to drive home their point. Recall that same thing happened when the CRFFN mandated them to pay Practitioners Operating Fee (POF) recently, when they didn’t comply even though, the leadership of these associations had supported CRFFN idea.

Till date, no sanction was meted out to the freight forwarders for flouting the directive, thus making CRFFN looks like a toothless dog that can only bark but can’t bite.

Meanwhile, of all that has been stated so far, the regulators in the maritime industry need to live up to expectations by applying the big stick on any erring terminal operators.

This seems to be a tall order because overtime, the regulators always seemed handicapped towards sanctioning of shipping lines in Nigeria.

Any hope for the freight forwarders and customs brokers in the nation’s ports?

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