As global shippers forge united front against illegal shipping charges…
Maritime journalist FRANCIS UGWOKE writes on the deleterious effects of illegal shipping charges on trade and explains that the global coalition against such illegalities is a step in the right direction.
Nigeria is currently facing economic crisis that has impacted negatively on trade. The crises are from different fronts. The poor returns from crude oil sales are being worsened by the Niger-Delta militancy with pipelines being destroyed on regular basis in recent time. With depleted foreign reserve, international trade is no longer what it used to be for Nigerian businessmen. The effect is that importers of trade goods under the 41-items list have to source foreign exchange from the black market or anyhow to remain in trade. Even manufacturers who enjoy government patronage and are covered by the banks in sales of foreign exchange are not left out. With the fluctuation of foreign exchange rate and calculation of import duties on the prevailing market rate, business is also no longer easy for anyone, including consumers who have to pay for goods at exorbitant prices.
Shipping Trade and GSF
Beyond the sad scenario painted above is yet a major challenge posed by international shipping agencies in the name of liner conferences who are bent on profit maximization. Members of the liner conferences who are mainly shipowners impose various surcharges on shippers. This issue is again worsened by the service providers at various local countries, including Nigeria, where other surcharges of similar nomenclature are imposed on shippers. The various challenges have been a major concern for every country involved in international trade. Worried about this trend, members of the Global Shippers Forum, GSF, recently met in Colombo, Sri-Lanka to discuss the issue and proffer solutions. GSF represents shippers’ interests drawn from respective organisations of Asia, Europe, North and South America and Africa. The main focus of the GSF is to facilitate trade by ensuring that international freight, policy decisions of governments and international organisations as they affect shippers and receivers of freight are affordable. GSF is dominated by shippers’ councils of every maritime nation, including African Shippers Forum, ASF, led by Dr. Emmanuel Kofi Mbiah, who is also the Managing Director of Ghana Shippers’ Authority, GSA. At this year’s conference in Colombo, Nigeria was represented by the Nigerian Shippers’ Council, NSC. Other African maritime nations were also represented by their shippers’ councils. Among the reasons why Nigeria and other African nations joined GSF was mainly to ensure that their shippers are saved from some shylock liner conferences who would take advantage of any situation to impose illegal surcharges on traders. Many times, the NSC had reached out to interest groups using its influence in the Forum to resolve cases affecting Nigeria’s trading interest. This has often checked the gang up against Nigeria on several claims of terrorism, piracy, armed attacks on ships or what is happening in the Gulf of Guinea, or Niger Delta, to raise high charges on shipment to Nigeria by liner conferences of different continents.
With very strong global platform, the Forum has a lot of influence in addressing issues affecting shippers economically. With strong influence in the International Maritime Organisation, IMO, liner conferences of various continents, the Forum has impacted positively in addressing issues affecting trade facilitation globally. For each country’s Shippers’ Council, the Global Forum can take up any issue affecting trade, no matter where the problem is coming from, either from the exporting country, liner conference, shipowner or the shipping company and resolve. Each country’s Shipper’s Council as a member of the Forum enjoys such privilege to resolve trade disputes which affect a group or groups of shippers of any country. For the NSC as an economic regulator, the GSF is like the International Maritime Organisation, IMO. GSF plays an important apex role that is beneficial as it is protective of shippers globally in what the Council stands for in relation to Nigerian shippers who are involved in trade all over the world. A director with the NSC, Azuka Ogo, explains that the Council has remained a member of the Forum to be able to champion international trade interests affecting individual shippers or the nation in her trade interests.
Illegal Surcharges and GSF intervention
At the GSF meeting in Colombo, Sri-Lanka, recently, it was clear that trade issues were the same in most trading countries. The concerns raised by members, including Hongkong, Nigeria, Ghana, among others, were on surcharges and terminal handling charges by both shipping lines and terminal operators. The worry was that these surcharges and terminal handling charges by shipping lines and terminal operators in various countries have impacted negatively on international trade. In Asia-Europe, the concerns of shippers were that surcharges made them to exceed contracted prices for shipments. This, they complained makes management of total shipping costs unpredictable for the owners of cargo. Other participants expressed worry that what was more annoying was that the illegal charges cannot be substantiated by the service providers. For Honk Kong, the shippers were not left out. The Hong Kong Shippers’ Council executive director, Mr Sunny Ho, described the terminal handling charge in his country as the highest in the world. Hu identified other charges as Amendment for the Manifest which he said has risen to $250. He also said documentation charge has nearly doubled in recent time. He also criticised the freight forwarders, saying that it was unfortunate that they have been left unchecked. The story was the same for shippers from the West and Central African countries who were at the conference. Nigeria, Ghana, Republic of Benin, Cameroun, among others who were represented by the Shippers’ councils had similar stories to tell. Nigeria’s Head of delegation to the Forum, Azuka Ogo, a lawyer and Director with the NSC, gave an account of the various efforts by the Council to check terminal operators and shipping lines in Nigeria from introducing unapproved charges. She told the Forum the terminal operators and shipping lines in Nigeria took the Council to court as a result of its decision to stop some of the charges introduced by them. She argued that the Shipping Line Agency Charges, SLAC which is one of the charges in contest does not relate to any service, adding that some of the illegal charges were responsible for the diversion of cargoes meant for Nigeria to neigbouring countries. Ogo also said that the service providers have also joined other top Nigerian government officials in the court action. She told the GSF that Nigeria had recently in an effort to bring about efficiency in the ports system launched the Standard Operating Standards, SOPs, involving every agency of government and all providers and consumers of shipping services. Ogo also disclosed that Nigeria equally launched the Port Service Support Portal (PSSP) to check corruption and other unwholesome practices by service providers at the nations’ ports, explaining that the PSSP is portal where any agency or shipper/individual can send their complaints to be addressed by the Nigerian Shippers Council. President, Shippers Association Lago State, Rev. Jonathan Nicol who also attended the meeting said the activities of the providers of shipping services have impacted negatively on trade. He said that while the big multinational agencies observe trade laws in other countries, they have deliberately remained different in Nigeria.
Nicol said Nigeria has as a result of high cost of doing business in its ports and illegal charges traced to the service providers lost about 70 percent of her cargo to neigbouring countries. He accused the service providers of deliberately frustrating the NSC as a regulator in the system to render the Council impotent.
Nicol urged the GSF to continue with its campaign to end sharp practices affecting trade all over the world , particularly in West and Central African sub-region. He called on the GSF to invite some of the affected companies to a roundtable where they can be told to be fair and transparent in their trade.
Chairman, Union of African Shippers’ Council, Dr Emmanuel Kofi Mbiah in his contribution identified port congestion surcharge and terminal handling charge in his country as unjustifiable. Mbiah said the terminal handing charge was between $140 and $155, adding that the terminal handling charges do not apply in any of the charges being imposed by the service providers. He disclosed that charges were simply being introduced as a response to slump in shipping trade.
Resolution on Surcharges
At the last Annual General Meeting, AGM, the GSF took far-reaching decisions as part of the efforts to check conference liners and terminal operators from introducing illegal surcharges. Some of the decisions remained confidential among members. But part of the decisions was to seek the intervention of the World Trade Organisation, WTO and United Nations Conference on Trade and Development, UNCTAD. The GSF strongly believes that both UNCTAD which is a principal organ of the United Nations General Assembly dealing with trade, investment, and development issues and WTO have a diplomatic way in which they can compel international shipping lines and terminal operators to put an end to illegal charges in various countries. In China, it was reported during the GSF meeting that shipping lines have cancelled some of the charges as a result government intervention. GSF used the opportunity of this development to appeal to governments of member states to join in making strong moves to stamp out illegal surcharges because of the negative effect on world trade and consumers.
The Secretary General of GSF, Mr Chris Welsh, had described the various illegal charges as causing a sense of frustration and anger among members. He said it was the determination of the GSF to end the imposition of such surcharges on shippers by 2020 through a series of actions which will expose the scale and injustice of the practice to world trade bodies. Welsh said, “our campaign will expose the extent of surcharging and make it an issue in future trading agreements. We are determined to end these practices and restore visibility to shipping rates and confidence to shippers.”
Benefits to Nigerian Shippers
President of the Rivers/Bayelsa Shippers’ Association, Mr. Udofia Ofon, who spoke on the benefit of the meeting said it will help Nigeria to maintain international best practices in the shipping industry. Udofia added that being a part of GSF will help Nigeria to know what is happening in other countries. He added: “It will help us to encourage healthy competition and ensure that our shippers are not been side-lined in international environment. It is good that we are part of it and am even happy that Nigerian Shippers’ Council is a signatory to all their laws”.
Ogo told this writer that by attending the meeting said the Council wants to strengthen the bargaining power of Nigerian shippers at all times with shipping lines. She added, “It means that the consumer will be protected because shippers will pay for services actually delivered not just padded b headings. The shippers have a right to say, fine, if am going to pay XYZ amount, what is it for?”. She added, “Also, charges have to be reasonable. You pay for actual services and it must be commensurate with the service delivered not just anything released by the shipping lines”.
She said by bringing Nigeria’s case to the GSF, the Forum can use its platform to expose what multinational shipping lines in their outrageous illegal charges. These shipping lines, she said, do not like being exposed because they know they were not doing the right thing. “We are here so that the GSF can begin to tell the whole world what a particular shipping line is doing in our country and a region of the world and they don’t like that exposure.
“So becoming part of GSF will expose a lot of things that are not proper. So it lends weight to the voice of Nigerian Shippers Council in the fight against illegal shipping charges. She expressed optimism that since the GSF and the shipping lines have a platform for discussion and interactions, the issues raised during the Colombo meeting as they affect shippers in Nigeria and other places would be addressed.
She said: “I think that coming here has opened our eyes to all the issues which will be beneficial to operators in Nigeria especially for shippers’ enlightenment and awareness.”