The Politics of Overtime Cargoes at Nigerian Ports

…80% Overtime Cargoes Belong to Government

In recent time, the efficiency of port operations in Nigeria has been threatened by overtime cargoes abandoned inside the the various port terminals. 
This has so much affected operations of terminal operators to the extent that many of them no longer open their gates to empty containers.

This is because spaces that are supposed to be used for the stacking of laden containers or exports are currently being occupied by overtime cargoes.

Sources at the ports have however confirmed to DAILY TREND NEWS that about 80% of overtime cargoes at Nigerian ports belong to the Federal Government. 

Some of these cargoes were meant for major projects, especially power plant equipment, equipment meant for projects in Aviation Sector, Rail Sector among others.

Recall that the Transmission Company of Nigeria (TCN) alone abandoned about 800 containers scattered around various terminals for fifteen years.

Normally, cargoes are classified as overtime when they have stayed in the ports between 28 and 30 days without clearing and delivery.

The issue of overtime cargoes at the port has oftentimes resurfaced in most of the discourse at maritime events, but the government and the concerned authorities have kept quiet as if it was not a problem.

There is hardly any forum that the issue has not been raised on the need to decongest the port of overtime cargoes.

After the concessioning of the Nigerian ports in 2006, congestion first started in 2010 and President Goodluck Jonathan had to set up a committee under Prof Sylvester Monye to evacuate congestion and to decongest the gridlock on the Apapa Oshodi express way.

It is disturbing to note that about nine years after, government is still setting up committees to decongest the port. The latest that was set up was Presidential Task Team to Decongest Apapa Gridlock, headed by Vice President Yemi Osinbajo himself and assisted by Kayode Opeifa.

This committee suggested to the Nigerian Ports Authority (NPA) recently that overtime cargoes should be gathered and auctioned on the spot, inside the various port terminals, but this has not been complied with.

Speaking recently at the third Maritime Stakeholder’s Interactive Session held in Lagos, Hadiza Bala Usman, Managing Director of NPA called on the minister of transportation to intervene in calling the attention of Nigeria Customs to facilitate the auctioning of these overtime cargoes.

She said “We have huge overtime cargoes in our ports and the last time an auction was done was in 2015.

We have written severally to Customs but they suggested we move the consignments out of the port terminals to Ikorodu Lighter Terminal,” she said.

According to her, Customs needs to understand that there is a provision for on-the-spot auctioning of these cargoes.

“This means that they can auction the cargoes within the ports. We need to facilitate that because our terminals are filled with overtime goods. There is no space and this has become a big challenge to us,” Usman said

Normally, before the port concession, government had warehouses in all the port terminals, and once there is need to remove overtime cargoes under the Uncleared Cargo List (UCL) which provision is clearly stated in the CEMA law, the cargoes would be assembled and proper action is usually taken on them.

But right now that all the spaces and warehouses in the port have been concessioned out by the Federal Government to concessionaires in the port reforms of 2016, overtime cargoes have become an issue.

Where we noticed the problem was coming was the fact that terminal operators under the port concession agreement pays four different dues on the cargo which includes; Throughput charges, Lease fees, Rent and Royalties, all on the same cargo.

Because of all these, they were not easily coming forth to declare that they are having overtime cargoes in their terminal because they wanted to keep the cargoes for the owners to come forth and pay before taking them away.

Unfortunately, because of the accumulated cost on these cargoes, some of the owners were not coming forward to pick them, so the cargoes kept occupying space. Meanwhile, in every port setting, space is always a scarce resource, nobody gambles with space because when a terminal do not have space to carry out its logistics of operations, it would affect the inflow or outflow of cargo.

Again, if the terminal operators had deployed modern and proper terminal management, they wouldn’t have allowed the cargoes to overstay inside the ports, thereby leading to congestion.

NPA under the concession agreement forced the terminal operators to agree to Guaranteed Minimum Tonnage (GMT) which means there is a volume of cargoes they must handle within a certain period.

Meanwhile, government did not consider the availability of space inside these terminals.What the government was looking at was the economic benefits and the revenue to be generated. 

If the terminal operators do not meet up that GMT, it then means that the revenue target of the government would be shortchanged, so the terminals kept receiving cargoes.

As terminals kept receiving cargoes, they kept overstretching capacity of the terminal and at the end of the day, to manage it has now become a problem.

By design, the Lagos Ports are not supposed to warehouse cargoes at the terminal, it was meant to be a transit port before moving to the hinterland. But right now, the terminals are getting more than they can hold.

Sources at one of the terminals confirmed that the amount of cargoes going to the hinterland is less than the amount of cargoes they received. He said this has equally made it difficult so to even take back empty containers.

Speaking with DAILY TREND NEWS, National President of National Association of Government Approved Freight Forwarders (NAGAFF) Mr Increase Uche said there are situations where it takes two weeks for a terminal operator to drop a container for examination.

He confirmed that this happens in almost all the terminals.

He said “Once you request for cargo examination, they will give you two days, if you are lucky they will drop it, if you are not, especially if you have multiple containers they may choose to be dropping it two containers per day”

“This means that there is space constraints, I have witnessed it personally in Apapa, when I had over 20 containers, it took us almost two weeks to examine them”
While responding to the need for government to take action, he said

“Our own take is that the government should do the needful, the port is not meant for piling up inventory, they should expedite action on how to remove overtime cargoes, the ones that belong to the government should be taken to a safe  place, the ones belonging to ordinary shippers, if the owners are still interested, they should slam a penalty and vacate the demurrage and accumulated storage charges on them and allow the owners to pay duty and pick them so that terminal operators can keep making revenue, compensation should go to the terminal operators and shipping companies”

“Government should go ahead and carry out on the spot auction of cargoes if this is the only available solution, what they normally do is take those cargoes to Ikorodu, but of recent, the Managing Director of Nigerian Ports Authority said there are no more space at Ikorodu terminal”

“What government needs to do is to set up a committee consisting of stakeholders including the freight forwarders, to look at the cargoes, value them and know those that are still worthwhile, place value on them and carry out the auction”

“After the auction, we would expect that the lack of holding bays by shipping companies, we would then know where to take it up from” he said
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