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.

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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.”

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