Overtime Cargo: Need for concessionary release to avoid Port Congestion

Overtime cargos as well as those out rightly abandoned by their owners have increasingly posed challenges to both the terminal operators and government at the ports.

Added to this category of cargoes are those seized from their owners by the Nigeria Customs Service for infractions on import and clearing procedures.

All over the ports in the country, especially at the Lagos ports, this type of goods are seen littering the terminals, choking up the spaces for free cargo.

The Act which established the Nigeria Customs Service has prescribed appropriate guidelines for disposal of such goods which is mainly through the auction process.

In the case of seized items which are mainly contraband or fake items, they are mostly destroyed if they are edible products like poultry products while those that are regulated products such as drugs, electrical appliances, etc., are usually handed over to the appropriate authorities such as NAFDAC, SON, and NDLEA for necessary action.

This action was prescribed to decongest the ports of these goods and free more spaces in the terminals.

However, we realised that this effort is increasingly becoming inadequate to address the menace posed by overtime and abandoned cargoes at our ports.

This platform notes that, of recent, the terminals and government warehouses across the country are bursting with overtime, abandoned and seized cargoes.

More worrisome is the fact that some of these categories of goods stay at the ports for as long as 10 years or more.

Of particular reference was the 655 containers belonging to Transmission Company of Nigeria(TCN) that were said to have been at the port for 15 years but which were recently discovered and evacuated.

These however exclude an estimated 2000 containers said to be abandoned at the Lagos ports alone while several others in that category litter other terminals around the country.

The Ikorodu lighter terminal specifically created to suck these categories of cargoes from the Lagos ports are said to be overfilled.

The government warehouse at Zone A of the Nigeria Customs Service, Lagos which holds seized goods are also threatening to burst with such cargo.

The situation is not different at other government warehouses across the country.

This is a sad commentary on the situation over overtime and abandoned cargo at the ports.

Nigeriamaritime360.com is worried that if urgent steps are not taken to address this problem, it may soon snowball into avoidable port congestion.

How did we get to this point? We dare to ask.

The most acceptable and statutory means of disposing these categories of cargoes is through auction. Unfortunately however, that option is temporarily stalled.

The Customs authority which has this statutory power to drive this option has suspended its e-auction platform due to perceived compromise by its users.

Without any gainsaying, this has exacerbated the worsening menace of abandoned cargo at the port.

We are worried by the decision of the Customs authority to suspend the only means known to the law of disposing this category of goods.

In as much as we appreciate the concerns raised by the Customs over the abuse of the e-platform, its perpetual suspension without any other viable alternative to dispose these goods, to us, is a recipe for congestion.

We laud the automation process of the auction exercise but the Customs needs to quickly rectify the identified lapses and commence its operation to starve off unpleasant circumstance that is now glaring us in the face.

We also believe that other measures other than auction exercise should be deployed to contain the rising incident of abandoned cargo at the ports.

Due to the humongous numbers of overtime and abandoned cargoes at the port, we believe that a multi-dimensional approach should be deployed to tackle the menace.

It stands to reason that no sane business owner would expend millions of naira on importation of goods only to abandon them at the ports.

Most importers, especially the genuine ones, may run into financial difficulty while in the process of goods clearance and at such, the cargo accumulates demurrage which will eventually lead to abandonment for lack of money.

Others may not have commenced clearance procedures at all due to some challenges that will eventually push the duration of the cargo into the threshold of overtime.

We also believe that due to some minor infractions in the clearance procedures, an importer may experience delay in the process which may spiral into accumulation of demurrages that he may not have capacity to pay.

We recommend however that this category of overtime cargo be released to their owners on concessionary rates.

By this, we mean such goods should be identified and the owners make to pay the Customs duties while the terminal operators waive a mutually agreed percentage off the accumulated demurrage to make it easier for the owners to pay.

This arrangement, to us, is a win- win situation.

The government will not lose its revenue; the terminal operators will also not lose their charges while the importers, especially the genuine and sincere ones, would not want to lose their multi-million naira goods.

When goods are auctioned, government gets peanuts from the accruable sales, the terminal operators get nothing as no charge is paid while the importers lose everything.

So we believe this arrangement will not only benefit the three parties involved in the transaction, government, terminal operators and importers, it will also lead to decongestion of the ports.

We also urge the government to look into the seizure policy of the Nigeria Customs Service with a view to making it more germane with the trade facilitation role of the service.

Apart from contraband goods which, to us, should unarguably attract outright seizure as it is the case presently, we believe that other category of goods, especially trade goods, should also enjoy concessionary release.

Goods that are caught infringing any of the clearance guidelines such as under declaration or concealment should not be outrightly seized but be released with stringent penalties payable by the owners.

This action will serve three purposes.

It will serve as a deterrent to future infringement. Also, government will get more money through the full payment of the accruable duties and the imposed penalties while it will also decongest the ports or government warehouses where such seizures would have been kept.

The last benefit is that it will enhance the trade facilitation role of the Customs.

Just like the concessionary release of a category of overtime cargo we earlier recommended, this method will also lead to a win -win situation.

To further decapacitate the rising incident of cargo abandonment, Nigeria Customs Service should moderate its propensity for causing delays in its cargo release method.

In as much as we acknowledge that substantial aspect of cargo release procedures have been automated, we however discovered that there are still few instances of hiccups in the process which cause delays and avoidable friction between the importers, their agents and the Customs.

One of these areas of friction is the alert system which Customs brokers have ceaselessly complained about.

This platform is conscious of the reason for the alert system which is to curb sharp practices among some unscrupulous Customs brokers who may wish to compromise the clearance procedures, but what we frown at is the excessive and indiscriminate use which arguably has resulted to friction and delays that may push cargo into the threshold of overtime trap.

We want to also appeal to importers and their agents to play the game of importation and cargo clearance by its rules and shun any action that may want to compromise the system, which to our mind, often results to delay in the process.

Terminal operators, in as much as we appreciate the fact that they are in business to make profit, should do so within the confine of decency and international best practices that will ease good clearance.

What we mean is that the operators should shun punitive and exploitative charges that often encumber quick evacuation of cargo from their facilities.

The shipping companies, in our own estimation, have a role to play in restoring sanity to our ports.

Just like the terminal operators, we want to admonish them to allow themselves to be bound by international rules and norms governing shipping trade.

Excessive, exploitative and indiscriminate charges which they are often accused of frustrate quick clearance of goods.

This platform believes that if all the parties involved in the import and cargo clearance business play the game by the rules and adhere to the extant guidelines, the incidence of cargo abandonment at the ports will be reduced to a reasonable extent.