We want consolidation in freight forwarding business — Shippers Council boss

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In this second part of our interview with the Executive Secretary/ Chief Executive Officer, Nigerian Shippers Council, Hassan Bello, addresses the issues around POF, Port efficiency, trucking, cost and ease of doing business in the ports amongst others.
Excerpts

WE notice that the controversy surrounding the practitioners' operating fee, POF, for freight forwarders is still persisting. What is Shippers Council's position? Yes, there is a controversy because it should not be laid on cargo.

It is the practitioners who should pay out of their pockets and if it is laid on cargo we are going to resist it. So you don't support it I support it as long as it is the practitioners that will pay.

Any attempt that will make it to be laid on cargo or put it on the shippers then that will not be nice. And we are working to see that this is not done. There is nothing wrong with the freight forwarders; I have very soft spot for them because they are the agents of the shippers and sometimes even the shippers abroad.

Let me say they are the link and they perform very important work in the shipment logistics chain, but they have to grow to be professionals. In fact I would rather they have trucks, they have warehouses, and so on and so forth. But it is also the function of the economy; if the economy is slow then they become mere local agents clearing goods from the ports.

If the economy grows, then they become the actual freight forwarders, but they are doing a lot. But we can't have 1000 freight forwarders, we cannot have that. There must be consolidation; I would like to specify share capital for their operations because they have to be big.

It's just like trucking companies, we cannot have every truck owner coming to port, there must be structured trucking companies; that is why when reforms come it will sweep many of them away. The truckers have to be a fleet. About six maximum and these are easy to deal with by regulators.

But in Nigeria, somebody will just come and say he wants to go and carry goods from the port. Now you have talked about the truckers, and you people are working on the fleet renewal. Yes, we wanted to have a fleet renewal policy, but at that time, that was two or three years back, the truckers said which road are we going to ply, which I think because more than anybody the Shippers Council is a stakeholder organisation.

There is nothing we can do without the blessing of the stakeholders. I believe in stakeholders' engagement and when you have it, you won't be wrong; and they said okay, we have a new truck but which road. At what interest rate on the loans which is a genuine question that have to be taken into consideration.

And so we had to wait and see, but now these roads are being done. And then we told them, you have to compete with the rail. Look at the rail revolution going on in Nigeria and Nigeria will never be the same when we complete this rail in Lagos, Kano, Port Harcourt, Aba.

Can you tell us more about what Dangote said concerning cost of doing business in Apapa where he spends N23billion every year. What does Apapa cost? If Dangote said so, he is talking about the conducive atmosphere for private sector and Dangote, the Flour Mills and Nigeria Ports Authority have even been through some efforts to ease the congestion.

But how is Apapa impacting cost of doing business? Well Apapa is what we have seen, we have made a lot of changes, and you know we have a lot of dispute with the shipping companies and the terminal operators. And even last week we had a case, we are looking at the cost.

Cost is also an element of competitiveness because a shipper will determine where to take his cargo. It's an economic decision, he would look at how many documents he is going to sign to get his cargo, how many days before he gets his cargo and most importantly what is he going to pay. So we want to keep the cost reasonable.

We have had almost one and a half year negotiating with shipping companies to reduce the cost of shipping to about 30 per cent and we were almost there until the head of the lead, that is Maersk Line, you know, had this incident where his family was attacked, his wife killed, but I think he's been rehabilitated now and immediately he comes, we are going to go to the terminals and also ask them. What we are trying to do is that we are also with the government, government created us but we have to talk to them, government you have to do these roads, you have to provide rail link to every port, you have to make National Inland Waterways, NIWA, supervise evacuation of cargo from the port through the inland water ways. We will talk with NNPC; it is time these pipelines were repaired so that we pump petroleum products out of the ports for trucks to take them without coming to Apapa.

We are interested in the masterplan of the Apapa ports just like we are interested in what is going on in Lekki Port and we have talked about it. Now Lekki is going to be connected with the railway even though there was no much earlier plan for that and also we are talking about Lekki, Dangote Refinery, some fertilizer companies and you cannot use the existing infrastructure because that will even be more chaotic than what we have in Apapa. I love your visions, but there are problems.

You talked about NNPC building pipelines, and other intrusions into the port environment. What do you think should be the right port environment? We have to use technology; technology is the answer to, otherwise, hopeless situation.

If we had technology deployed to the port, a lot of things would be easy. The human contact, the interaction is a source of corruption. What we want to make the port and we have a plan where we could see the port from here.

Look at the banking halls now; nobody is in the banking hall, no queue or congestion because technology has been applied.
Because it is an essential private sector. Yes it's a private sector but the banking hall is because the banks have deployed appropriate technology. You can do your transactions without going to the bank.

So that is what we want the port to be. But the private sector must take lead in the maritime industry; you know we have no problems with that. But the private sector must be a responsible private sector.

But am happy you are talking about the private sector, you are talking about technology, you are talking about key stakeholders, but in your sector the Customs is still an issue. But you could see the Customs striving to make amends.
But we see this at night, a truck leaves the port having been cleared, but it is flagged down and delayed at Mile-2 by some Customs officers.
I have intervened and the situation was improved. I am talking about a particular route and the Federal Operations Unit, FOU, were pulled out.

Customs is the head of the revenue generation at the ports. NPA, they are the landlords, Customs they are the owners of the port and Shippers Council, NDLEA and others all have something to do at the ports. We have to start speaking to one another.

There is no synergy yet. But it is being cultivated now. The Customs is progressing, we have e-Customs now; so it's not only the institutions, NPA and the rest even the infrastructure must speak with one another; there must be integration and linkages so even the dry port, it must speak with the Tincan Island or the River Port in Onitsha.

So there must be deliberate connectivity, an inland connectivity. Of what use is efficiency of the terminal when they cannot evacuate cargo and government must be told that the provision of infrastructure, the provision of conducive atmosphere for private sector to thrive is their responsibility. We notice that most of the issues we brought here they are all work-in-progress.

You want to intervene in POF, work-in-progress; scanner work-in-progress, cargo tracking notes, that one cannot be seen when it is going to end. The only question somebody will ask is on inland container depot. Only one that is functional is also controversial, Kaduna.

We know that Jos is even worse. Where do we go from here? So sir all these things that are in the pipleline, you move, stop and all that, at the end of this year what are we expecting?

In 2020, we are going to concentrate on efficiency of the port, we are going to concentrate on lowering the cost of business, and we are going to concentrate on the ease of doing business. We want to make our ports competitive so we have found a strategy where we can audit the terminals. We also want to be part the concession agreement that is being unveiled now because we are regulators.

We have to have economic regulations that are properly instituted. We want to see two truck transits in Enugu and in Lokoja start operating. We want to see the Inland Container Depot, ICD, in Funtua.

There was a selection of concessionaires which was done many times, but what you don't know is the dry ports are the guinea pigs of Public Private Partnerships, PPP, operations. They were created when we did not have the Infrastructure Concession and Regulatory Commission, ICRC; so they are operating without any legal framework and we have to navigate through that.
So when we have 40 per cent or 50 per cent in Jos; we have 50 per cent in Funtua because this is the agricultural belt. What we are trying to say is give them chance to arrange even the agreement.

With the ICRC we have done the agreement again so that if you are not able to complete your ICD within time limit, it will be cancelled. But what we are saying is this, a private sector initiative and we are having over-sights on the completion of this and already we are doing that because the completion of dry ports will solve a lot of problems in Nigeria especially export. We want to make them an export centre, like now if you go to Kaduna, ginger is being exported from Kaduna to Bolivia and Mexico.

Cow horn is also being exported and so many other things but the rail capacity is hindering us. Every now and then we have meetings with Nigeria Railway Corporation; the track which is the narrow gauge is not really rehabilitated. The speed is 30 kilometres per hour and we want it to be 80 kilometres and we want the frequency.

And then we need to have true bill of lading by the shipping companies so that the goods for Kaduna are not examined at the sea port at all. Rail capacity They are just escorted or tracked by Customs so that it is at that port that it will be opened.

Now this means less congestion in the ports; we don't have to have trucks coming from Aba to take goods from Lagos; it will be done mostly by rail but even if now by trucks, people are using the Kaduna ICD. Despite all the limitations we have seen increase in cargo there. We have had boost in the local economy in Kaduna; people are being employed and you have some factories trying to come and set up.

Many of them have serious interest in just the rail capacity. We are talking with the Nigerian Railway; the success of dry port does not depend on Nigeria Shippers Council. Just like the transportation it depends on other factors.

What of the truck transit in Yobe? Yes, they have budgeted money to do the truck transit. The one in Kaduna has opened.

You know we gave the state government because it's not on the exclusive list to do truck transit. We always encourage truck transit to do it while we have oversight function, we will just provide them the templates. Now what this truck transit will do, will also have impact on the national economy because parking of trucks indiscriminately degrades the environment and slow delivery of cargo will be monitored.

Even the roads will be safe because there is truck to see, weigh bridges all these will be in store. We have restaurants, we have hostels and hotels. We make our infrastructure modern.

What is the budget for that other project?
It's N4 billion.

The employment content of this project is also important.

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