There is increasing optimism among shipping stakeholders that the Cargo Tracking Scheme to be managed by the Nigerian Shippers’ Council (NSC) will further improve efficiency at the ports and cut cost borne by shippers as part of the efforts of the federal government to facilitate trade, writes Francis Ugwoke.

The nation’s shipping industry is a revenue spinner at all times as far as Nigeria remains a keen participant in global trade. With rising cargo volume which as at last year stood at 86,603,903 metric tons (mt) as against 76,886,997 (mt) in the previous year, the shipping sector will continue to contribute so much to the national economy at this time of low returns from oil trade. It is already being estimated that the sector can comfortably contribute as much as N7 trillion annually to the national economy if the potential is developed.

It is perhaps in realisation of this that every effort is being made by the federal government to reposition the sector to be more efficient in every aspect of operations. In what is seen as part of this move is the federal government’s recent decision to reintroduce the cargo tracking system or cargo tracking note (CTN) under the management of the Nigerian Shippers’ Council (NSC). Industry stakeholders see this as part of government’s commitment to improve on trade facilitation. As a regulator, the Council has been making efforts to achieve efficiency at the ports as essential part of trade facilitation. According to the Executive Secretary, Shippers’ Council, Mr. Hassan Bello, the CTN will be important in the efforts to facilitate trade. Among others, is the data that will be made available in the process.

Ports Regulator and CTN

The cargo tracking system is a global initiative to monitor and verify cargo on transit. It has the blessings of the International Maritime Organisation (IMO) and World Customs Organisation (WCO) which Nigeria is a member. It has a lot of security and safety value for shippers and indeed agencies of government. The idea came up in 2007 but introduced in 2009 in Nigeria, but had to be dropped following protest by shipping industry stakeholders as a result of the high charges imposed on shippers. It was then under the management of the Nigerian Ports Authority (NPA). However, under the current dispensation, the cargo tracking regime will now be managed by the Shippers’ Council as the ports regulator. When fully in force, every shipper, including importers and exporters will have to follow the laid down procedures to be announced by the ports regulator. Sources close to the Council said penalties may be imposed on those who fail to follow the rule. Part of the policy, a source close to the Shippers’ Council said is for the shipping companies to make available every cargo information on both export or import goods in advance to the Ports Regulator. Its adoption will attract a minimal fee on all imports and exports as against what was introduced when it was under the NPA. This is a departure from what was charged before it was suspended. Then, the sum of $55 was collected as administrative fee, including USD$205.00 for shipments from other continents and USD$8.50 on conventional shipments. The costs were then built into the bill of lading.

Benefits

One good thing about cargo tracking system is that it will check fraudulent practices by importers and their accomplices. It will check under-declaration or outright concealment which are common issues in the ports. The federal government loses a lot of revenue as a result of these trade crimes. Even when the Customs Service tries to check the problem, its officers are compromised as they issue Debit Notes (DNs) that are far below what the shipper should pay. This is done when settlement has exchanged hands. The other benefits include safety of cargo and security of every cargo coming into the country. With a lot of focus on goods on transit that will carry certificate of origin to destination, nature, freight and weight, unscrupulous importers may be weary of involvement in any trade crime. When introduced, it is expected to reduce delay in cargo shipment. It is also envisaged that it will reduce cost as importers will no longer suffer payment of extra cost for freight after the initial payment of the “professional cost under Cost, Insurance and Freight (CIF) obligation to shipping lines”. This is one issue that the ports regulator has been bitter about. Shippers’ Council boss, Bello, had cried out against such payment, saying it was only in Nigeria that shippers pay more after the obligation of CIF payment to bring cargo into the country.

How CTN Will Facilitate Trade

On how the cargo tracking system will facilitate trade, Bello described it as a very important source of information. He said, “International trade thrives on information- credible data. And that is what the cargo tracking system does. We will know at the point of loading of the ship which cargo is coming to Nigeria. The advantage is that we will know the trade pattern and there are also security issues involved, which we will be able to determine. This is data that will be shared with very important institutions like the Central Bank of Nigeria, NPA, Customs and NNPC. Even more important, if we have advance knowledge of information, Shippers Council will have to share this information with terminal operators, the shipping companies and customs as well as other relevant institutions. This will cut drastically delays in vessel resumption and also cargo clearing procedure because if you have information even before the ship sails- that certain ship is carrying a particular tonnage, certain type of goods is arriving this time, customs will be ready to receive it, port concessionaires are ready, the shipping companies must have prepared. So, all the delays will be minimised, if I may call it, and it is what the stakeholders have been calling for when we had our meetings and this is what we are delivering.

He added, “If we have this, it is extremely important for regulation. Information about the cargo, information about international trade, security issues and it will also stop pilferages, leakages and hemorrhages going on in port operations because if we have to have the revenue from the port operations, we have to stop all this. Advanced Cargo Information System will be able to curb these malpractices that we see. It is transparent, it is going to be shared with everybody so you cannot even cut corners with this information.

It is very important for clarity, it is very important for internationalisation of cargo clearance procedure. Nigeria will be at par with many countries, you cannot under-declare even for the shippers, sometimes when they are not compliant, they will import tyres and say it’s something else. But with this we have clarity, everything is clear and things will be processed with procedures and we will not have delays in Nigerian ports. This will add to the competitive edge over other ports; we should not forget that we are in competition with other ports”. On the cost that will be charged under the regime, he said, this will be minimal to cover administrative cost. Bello said, “it will not cost much; it will just be barely administrative cost”.

Stakeholders’ Views on CTN

Shipping industry stakeholders apparently aware of the remodeled cargo tracking system to be managed by the ports regulator said it is a good development. Nigerian shippers are particularly happy that the new policy will cut cost of shipping instead of having to pay more as was the case before. But perhaps, more important to them is the fact that the ports regulator is the one managing the scheme. Maritime lawyer, Mr Emmanuel Ofomata, who opined that it was wrong to subject importers to high cost of importation in the country, adding that the involvement of the NSC has rekindled the optimism of many shippers on the project. He said it was a cheering news that the return of CTN will this time lead to cost reduction in import and export business instead of shippers having to pay more. He urged the ports regulator to keep to its promise and ensure that Nigerian importers do not have to pay more under the new trade scheme because of the implication on the national economy.