POTMAN Rector, Dr Babatunde Samuel Advocates Reforms in Container Deposit Practices, Better Indemnity for Freight Forwarders

By DAPO OLAWUNI

Dr. Babatunde Samuel, Rector of Port and Terminal Management Academy (POTMAN), has called for comprehensive reforms in container deposit practices within Nigeria’s maritime sector.

He also highlighted the need for better understanding and training on indemnity principles among freight forwarders.

Dr. Samuel made these remarks during an exclusive interview with DAILY TREND at a training program organized by P&H Nova Development and Procurement Limited in Lagos on Monday.

Discussing the longstanding issue of container deposits, Dr. Samuel stressed the financial burden it places on businesses within the shipping and logistics sectors. “Container deposits have been a major challenge for many players in the industry,” he said.

“These deposits are often held for extended periods, sometimes months, before they are refunded, creating a cash flow problem for many companies, especially smaller operators.”

Dr. Samuel pointed out that the current system requires companies to deposit large sums of money as security for containers, which are only refunded once the containers are returned in good condition.

“This system is cumbersome and inefficient,” he noted. “We cannot continue with a system that unnecessarily ties up so much capital. It’s about the efficiency and transparency of the process.”

When asked how this issue could be resolved, Dr. Samuel suggested that allowing insurance companies to issue bonds instead of requiring cash deposits could be a viable solution. “The Nigerian Shippers Council has been exploring the idea of using insurance bonds as an alternative to cash deposits. This would mean companies could take out an insurance policy instead of paying a large sum of money upfront, freeing up capital and making the process much more efficient,” he explained.

However, he emphasized that legislative backing is crucial to implementing such changes.

“There’s a bill in the National Assembly that, if passed, will transform the Nigerian Shippers Council into a transport commission, empowering them further,” Dr. Samuel said.

“This transformation would allow the council to enforce new regulations regarding container deposits, including the use of insurance bonds. We need the support of the National Assembly to make these changes happen.”

Dr. Samuel also addressed the topic of indemnity for practitioners in the freight forwarding industry, particularly regarding the lack of knowledge and understanding of insurance elements within the sector.

“Practitioners in the freight forwarding industry can benefit from indemnity by understanding the insurance aspects of the maritime industry,” he stated.

“Indemnity is provided by insurance companies to cover risks that freight forwarders might face, whether it involves clearing or delivering cargo to bona fide consignees.”

He identified four main areas of indemnity: the cargo itself, importers, exporters, and outreach. “For example, we often refer to JIT, which stands for ‘Just In Time’ transit insurance provided by insurance companies. One of the main challenges faced by freight forwarders is a lack of knowledge and understanding of these insurance elements,” he said.

Dr. Samuel called for the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) to organize seminars or workshops on indemnity.

“It would be beneficial for them to collaborate with institutions such as Portman, NGAV, or others to strengthen the knowledge base of freight forwarders,” he suggested.

The conversation also touched on the development of deep seaports, with Dr. Samuel emphasizing the strategic importance of such projects for Nigeria’s economic growth. “Deep seaports are vital for accommodating more vessels and facilitating trade, particularly with landlocked countries like Niger, Mali, and Chad,” he noted. “If Nigeria can develop its deep seaports, we could lower freight costs and attract more business from these countries.”

He acknowledged concerns about environmental risks associated with having multiple deep seaports in close proximity but argued that the economic benefits outweigh these risks. “The larger the vessel, the lower the freight costs, which is beneficial for shippers,” he said. “The primary purpose of deep seaports is to support trade and economic development.”

Regarding the training program organized by P&H Nova Development and Procurement Limited, which was facilittated by POTMAN, Dr. Samuel highlighted its focus on enhancing participants’ competencies, skills, and knowledge in the maritime industry. “Knowledge is power,” he remarked.

“This program is designed to instill a culture of knowledge and enable participants to contribute more effectively, ultimately increasing the profitability and productivity of their companies.”

He concluded by saying, “The maritime industry is complex, and to thrive, companies need skilled and knowledgeable personnel. Training programs like this are crucial for developing the necessary competencies to navigate the challenges of the industry.”