FG TO ABOLISH DEMURRAGE IN CARGO CLEARING AT PORTS

There are indications that the Federal Government is planning a legislation to abolish demurrage charged on goods in the country’s clearing system to pave way for smooth operations in the ports.
This is based on the suggested policy framework by the Nigerian Customs Service (NCS) to the Presidential Committee on Port Reform headed by Professor Sylvester Monye when the body visited the Lagos sea ports.
Demurrage is the levy imposed on goods by the owner of a facility where they are accommodated for overstaying the statutory period required. In the port industry, it is usually charged by terminal operators and shipping companies that make a lot of fortunes from it.
For example, under the Nigerian Ports Authority (NPA), the first six days of demurrage attract N95.00 per day for a 20ft container, which now goes for N900.00, giving a difference of N805.00 or 47 per cent increase. When the same cargo enters the second phase of demurrage, that is after additional six days, under NPA, the importer would pay N250.00, an amount that has now shot up to N4,200, a hike of N1,580 per cent or N3,950.00 difference. For the third phase, which is the cargo staying beyond 12 days, the consignee has to cough out N6,000 per day, up from the N1,300 NPA used to charge, giving a difference of N4,700 or 361 per cent increase.
A source in Customs, who does not want his name in print, told Daily Newswatch that the suggestion came because shipping companies and terminal operators are the major obstacles to smooth clearing operations at ports.
The source explained that the Customs Service made the suggestion when Professor Monye, who is also the Presidential Adviser on Performance Monitoring and Evaluation (PME), demanded to know what should be done to engender smooth cargo clearing in the ports.
The source disclosed that these bodies usually put in artificial hurdles in the way that usually caused goods not to be delivered at stipulated time, thereby attracting avoidable demurrage which proceeds make them always smiling to the bank.
“I have been in this system for awhile. I can tell you that if you remove payment of demurrage in clearing, things will change for the better in the ports. It is because of this money the bodies make, that is the problem,” the source maintained.
It was also discovered that as artificial hurdles are created, personnel of the concerned organisations, especially terminal operators, collect between N30,000 and N50,000 gratification on each container from the consignee to get his goods positioned for upfront examination to escape the levy.
Another senior Customs officer in the Tin Can Island Port also said not less than 600 to 700 containers could be physically examined daily if the terminal operators were not more concerned with demurrage.
The officer debunked the claim by the concessionaires that if demurrage was abolished from the system, it would make some consignees to turn the ports to their warehouse, saying that is false and a guise created by the exploiters in the system.
The Customs Service’s position tallies with the recent accusation levelled against some shipping companies and terminal operators by the Comptroller General of Customs, Alhaji Abdullahi Dikko Inde, at the “Stakeholders’ Sensitisation Forum” on Customs new trade portal, the Nigerian Trade Hub (NTH), held in Apapa, Lagos.
“Shipping companies and terminal operators are the greatest problem of cargo clearing in Nigeria. I will go to the highest authority to get approval to fight them. If they are Nigerian companies, we penalise them while the foreign ones among them will be deported,” the Customs boss had said.
Source: Daily Newswatch