Manufacturers who bring in raw materials for production and export their finished goods through the seaports as well as farmers who export their produce to other countries would be paying higher freight cost following the new surcharges imposed on cargoes by major international shipping liners.
These surcharges come in the form of Bunker Adjustment Factor, Currency Adjustment Factor, War Risk Surcharge, Congestion Surcharge, Peak Season Surcharge, Extra Risk Insurance Surcharge, Freight Rates Surcharge, Port Operations Recovery Surcharge, among others.
CMA CGM, the French shipping giant and one of the major liners that call Nigerian ports, recently announced that effective from February 23, 2020, farmers exporting containerised sesame cargo from Tin-Can Island and Apapa Ports to seaports in Asia, India, Middle East Gulf, Red Sea, Oceania and sub-Saharan Africa would pay Peak Season Surcharge (PSS) of $50 per 20-foot and $100 per 40-foot container.
Farmers wanting to export containerised sesame exports from Onne to the above-mentioned destinations would also pay same PSS of $50 per 20-foot and $100 per 40-foot container starting from February 24, 2020.
In terms of imports, CMA CGM announced that starting from February 10, 2020, Nigerian cargo that originates from ports in the United States and is bound to arrive at Apapa and Tin-Can ports would pay PSS of $1,500 per container of dry cargo, reefer (refrigerated), Out of Gauge (OOG) cargo and break bulk cargo.
The French shipping liners said it would from February 17, 2020 apply General Rate Restoration (GRR) of $500 per 20-foot and $1,000 per 40-foot container of dry, reefer, OOG and break bulk cargoes from Asia including China, South Korea and Taiwan to all West African ports including Nigeria.
Surcharges are supposed to be temporary measures by shipping lines involved in the shipment of goods worldwide to address peculiar challenges of shipping at destination and are subject to removal when the situation normalises, according to the United Nations Conference on Trade and Development (UNCTAD). However, some of these charges have assumed permanence without justification or basis for negotiation.
Industry operators say these surcharges will take a toll on shippers in the country as well as consumers who will eventually bear the cost in form of increased prices of goods.
Nigeria’s economy is estimated to lose an average of N150 billion annually to arbitrary surcharges slammed on Nigerian-bound imports from Europe, America, Asia and ports in sub-Saharan Africa as well as exports originating from Nigeria to these countries, according to Nigerian Shippers’ Council.
“Shipping companies are milking Nigerians by imposing unnecessary surcharges and demurrage charges. Unfortunately, monies generated by these foreign shipping firms are not retained in our economy because these funds are repatriated to their home countries,” said Tony Anakebe, managing director, Gold-Link Investment Ltd.
Following the implementation of the International Maritime Organisation (IMO) 2020 sulphur cap, Maersk, the Danish shipping operator, also imposed bunker surcharges on freight to cushion the effect of high cost of fuel with very low sulphur fuel oil (VLSFO).
Maersk notified customers, in an advisory note, that it would raise bunker prices as its operational costs have significantly increased.
The shipping giant said the tariff increase would be seen across all trades with an increase range of $50-$200 per 40-foot equivalent unit of container, reflecting the increased fuel cost.
There is need for a serious regulatory body to regulate the activities of shipping companies and all other service providers in the ports, Anakebe said.
Nigerian importers paid a whopping $166.9 million on Peak Season Surcharge and $267.1 million on congestion surcharge in 2017 alone, according to statistics from the Nigerian Shippers’ Council.
The Council also estimated that more than N2 billion is repatriated by international shipping firms in a quarter of every year, confirming that the surcharges amount to huge sums of capital flight from Nigeria.
Hassan Bello, executive secretary, Nigerian Shippers Council, said recently that cargo owners must be consulted before new charges are imposed on them by shipping lines.
“If foreign ship owners insist that we cannot be part of the negotiation, we use legislation. We need to consider the negative effect of the surcharges on our individual economies and fight against them,” Bello said at a forum held in Abuja on arbitrary increase in charges by shipping firms.
According to him, these charges are affecting African economies through inflation because all the charges are passed to the final consumers by way of rise in prices of commodities. Such extra charges and subsequent rise in inflation result in poor standard of living because rise in market prices of goods would make them unaffordable to many, he said.
AMAKA ANAGOR-EWUZIE
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