Nigerian importers, Shippers’ Council condemn surcharge on cargoes by international shipping firms

Story from Damilola Aina

Tension is mounting at the nation’s seaports where importers who are groaning under huge surcharge imposed on them by the international shipping firms on cargoes imported from across the world are threatening fire and brimstone.

The surcharge, according to current realities is adding to the high cost of doing business in Nigerian ports, coupled with the challenges of infrastructure deficiency and cumbersome shipping process, and the Nigeria Shippers Council has decided to roll up its sleeves to do combat with the shippers.

The importers pointed to one of the foreign shipping firms- Hapag-Lloyd, which in the last nine months has imposed a revised Peak Season Surcharge (PSS) on Tin Can Island and Apapa ports in Lagos. Hapag-Lloyd imposed the PSS on all container types from across the world to Tin Can Island and Apapa ports.

Documents obtained by the media showed that about $1025 surcharge is slammed on 20 feet (ft) and 40ft containers on cargoes coming from the United States and US territories, China, Taiwan, Hong Kong, and Macau.

Charges from cargoes from the rest of the world are also pegged at $1025 or EUR 930 accordingly.

The charges are different from the ocean tariff rates as well as bunker-related surcharges, security-related surcharges, terminal handling charges, among others that shore up the cost of shipping in Nigeria.

Having commenced the charges from December 15, 2019, Hapag Lloyd, according to its notice is imposing the surcharge till further notice.

Critical industries in Nigeria are already groaning under the new charges, lamenting that the high prices are shocking its profits, which has already been crashed by the COVID-19 pandemic.

Executive Secretary and Chief Executive Officer, Nigerian Shippers Council, Hassan Bello, described the charges as economic sabotage, saying the Council is moving vehemently against the action of the shipping firm.

Bello said: “We are protesting against it vehemently. There was no notice to us and the shippers that the charge was imminent. From our intelligence, these charges are over $1,000. It is discriminatory. It is insensitive. Just when the Nigerian economy is recovering a little bit from the effect of COVID-19, it is insensitive for anybody to slam such charges of over $1,000 on Nigeria’s trade.

“It is discriminatory because it is not happening in Togo, Benin or Ghana, why should it be in Nigeria. “We have written a strong letter to the shipping association of Nigeria and we also wrote to their principals overseas, because this is not a local charge.

“Why should Nigeria be the recovery ground for shipping companies? We have three lines of action on the internal level; we are going to call on the Union of Africa’s Shippers’ Council; Global Shippers’ Association and Global Shippers Forum.

“On the national level, we are rallying around the organized private sector, I am already in talks with Lagos Chamber of Commerce and Industry (LCCI), I will talk to Manufacturers Association of Nigeria, as well as big-time shippers like Dangote and Nigerian Breweries among others.

“We should all come together and fight against these unnecessary charges. The charges are unilateral and arbitral and we are going to protest against it because it is economic sabotage. It goes deep into Nigeria’s economic recovery. It is against our resolve to recover from the effect of COVID-19,” he said.

Chairman, Shippers Association Lagos State, Jonathan Nichol bemoaned the shipping costs, expressing the group’s readiness to take it up with appropriate agencies.

Nichol said the surcharge could be linked to congestion at Lagos ports, but it is uncalled for, considering the negative effect of COVID-19, “we will certainly induce discussions on this with the Shippers Council”. He stressed the need to review the costs of shipping in Nigeria, noting that “importers hardly make a profit” due to excessive charges.

President, Importers Association of Nigeria, Kingsley Chikezie said the importers are not happy about the additional charges from the shipping firm, even at a time they were complaining about the high cost of shipping at the ports.

Chikezie said a lot of things are happening at the ports including the issue of transfer charges among others, appealing to the authorities to ensure urgent review of the charges.

However, some industrialists who were severely affected by the surcharge burden have urged the Federal Government to institute litigation against the erring shipping firm for operating against the rule of trade facilitation agenda of International Maritime Organisation (IMO) during the pandemic period.

The Managing Director of WellWaters Resources, Mr Ogunlade Olabisi, called on the Federal Competition and Consumer Protection Commission to intervene on the issue. “I think there is a need for the Federal Competition and Consumer Protection to take up legal action against the shipping firm.

After all, it is their responsibility to protect consumers in the country.”

A source in a major manufacturing firm, who preferred anonymity, said the agenda of the shipping firm is self-serving and profiteering, which is in contradiction of the trade facilitation rule.

Before now, CMA CGM and Maersk Shipping had earlier slammed surcharge on Nigerian bound cargoes.

Notwithstanding the negative effects of the COVID-19 pandemic, German container shipping company Hapag-Lloyd closed the first six months of this year with a profit. The group profit stood at $314 million in H1 2020, compared to $165 million seen in the corresponding period a year earlier.