CONFORMITY TO INTERNATIONAL STANDARDS IN THE DELIVERY OF SHIPPING SERVICES IN NIGERIA A CRITICAL REVIEW

1. CONFORMITY TO INTERNATIONAL STANDARDS IN THE DELIVERY OF SHIPPING SERVICES IN NIGERIA – A CRITICAL REVIEW By Captain ADAMU A. BIUExecutive Secretary/CEONigerian Shippers’ Council 1

2. This a brief presentation on the practical experiences of the Nigerian Shippers’ Council on the quality and level of services provided cargo owners in Nigeria by services providers. 2 INTRODUCTION

3. Since shipping is an international undertaking international standard in shipping services are best practices that define the relationship and interactions between the various actors in the industry. 3 INTERNATIONAL BEST PRACTICES IN SHIPPING SERVICES

4. To start with, I would like to define international standards in shipping service provision as practices that foster equity, integrity and fair trade. 4 INTERNATIONAL BEST PRACTICES IN SHIPPING SERVICES

5. The global standards in shipping practice include the following: Standard of quality - - quality of information flows accompanying the physical movement of goods - e-Trade and e-shipping - competition in related services 5 GLOBAL STANDARDS IN SHIPPPING PRACTICE

6. For Shipping Lines Standards include: - online information on sailing schedules - transmitting booking request and booking confirmation - producing bills of lading - authorizing payments 6 GLOBAL STANDARDS IN SHIPPPING PRACTICE

7. For shipping agents standards include: - high standard of business ethics and professional conducts - discharging duties with integrity - honesty, conscientiousness diligence and efficiency - due diligence to guard against fraudulent practices - observance of national laws and regulations relevant to their business 7 GLOBAL STANDARDS IN SHIPPPING PRACTICE

8. For ports Standards include : - on line notification of port tariff schedules - efficient control of shipping traffic/management of the traffic - express information on incoming and outgoing ships -information on cargo and cargo characteristics 8 GLOBAL STANDARDS IN SHIPPPING PRACTICE

9. International standards are put in place by international organizations like the IMO, UNCTAD, UNCITRAL ,ICC, ILO, WTO etc to establish best practices and ensure that the industry is beneficial to all parties. These standards are expressed as Laws, Conventions, Treaties, Codes etc. which govern the various aspects of the shipping industry. Apart from the documentation of international standards, they can be recognized in practice by some elements in the activities of services providers. 9 INTERNATIONAL BEST PRACTICES IN SHIPPING SERVICES

10. Efficiency- quick vessels turn around, prompt delivery of goods to consignee, prompt cargo discharge at the terminal, doo-to-door service, multimodal service Availability of Service – service adequacy, tonnage, trucks, axle loads and capacity Reliability – reliability of shipping service, modern and adequate port facilities, timeliness of cargo delivery, safety of goods at the terminals, adequate guarantees, adequate insurance and bonds coverage Cost effectiveness : pricing and charges 10 ELEMENTS OF BEST PRACTICES IN SHIPPING SERVICES

11. The services rendered by services providers call for application of these highlighted international standards in other for the services consumers to derive optimal benefits from them. We have however observed from practical experience that this is not the case in Nigeria. The Nigerian cargo owner is subjected to all manners of unwholesome practices that are at variance with international standards by services providers 11 INTERNATIONAL STANDARDS IN SHIPPING SERVICES 

12. EFFICIENCY OF SERVICES In terms of efficiency cargo owners have been having unpleasant experiences due to: Delays in the delivery of cargo by carriers Cumbersome documentation procedures on the part of shipping line/agents, some terminal operators Cumbersome and unnecessarily long inspection processes by inspection agents/duplication of cargo inspection by the customs Sometimes disagreement between inspection agents and the Customs lead to delays These occurrences make it difficult for shippers to properly plan their business and they often as a result incur heavy financial losses and even the collapse of their businesses. 12 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

13. EFFICIENCY AND E-SHIPPING It is quite difficult to talk of efficiency in rendering shipping services in the 21st Century without the mention of ICT and e-shipping which has become a global standard. The low level of embrace of e-shipping is one major factor militating against efficiency on the part of service providers. There is a lack of industry-wide application Information and Communication Technology (ICT) in our shipping trade as it obtains in Ghana (GCNet) and Singapore (Port Net). Electronic filing and processing of shipping documents is the global standard. This has even progressed to the level of filling entries through the mobile phone. We however have the handicap of a lack of legal provision for handling electronic shipping disputes yet. But we have to put this in place urgently in order to operate at global standards. We also have the problem of near absence of electricity and adequate telecommunication facilities. 13 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

14. AVAILABILITY OF SERVICES In most instances the services desired by shippers are not available and even when they are, this is not provided in the desired quality or quantum. This is especially in the case of vessels for our exporters to the sub-region whose businesses have been in jeopardy because lack of coastal vessels. The absence of deep sea ports also means that we can not take in large ships that will bring our freight costs down through economies of scale and also promote feeder ship services that will help develop our coastal shipping trade There is equally a dearth of haulage services that will render desired services for inland movement of goods. Instead what we have are mostly unorganized operators with low level of operational standards e.g treucks that unroad-worthy, lack of G.I.T Insurance 14 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

15. RELIABILITY OF SERVICES Even when and where services are available, they are neither reliable nor predictable. Shipping companies have often given shippers wrong ETAs only for such consignees to realize that their consignments had landed for over three weeks earlier and have already incurred demurrage/rent Labour unrests and disputes lead to disruption of the schedule of chartered vessels that cause shipper/charterers to incur unnecessary costs on the chartered vessels Sometimes the activities of some regulatory agencies at the terminals cause unexpected delays for shipper and make them incur avoidable costs Unreliability of services also makes it very difficult for shippers to plan their businesses 15 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

16. PREDICTABILITY OF SERVICES Often there is no means in the charges of services providers as their charges are very wide and diverse There is also the issue of arbitrary increase in charges. New charges are often introduced in the trade arbitrarily Charges that have been approved by authorities to be introduced progressively are also applied retroactively by some of the operators In other words, shippers do not know what to expect in terms of charges from services providers, especially shipping agents. In the area of charges, it is also noted that freight forwarders are equally guilty of imposition of spurious charges on he shippers they claim to represent 16 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

17. COST EFFECTIVENESS In many cases there is no relationship between the services rendered and the charges imposed on cargo owners by operators in that: Shippers are made to pay strange and unjustifiable charges like shipping agency fees, commission on turnover, container deposit administration fees and a host of other spurious charges imposed by shipping agents. Wrong Billings periods – charging rent on cargo when the vessel had not even berthed Charging a shipper transfer charge when he did not request for his consignment to be transferred to an off-dock terminal Applying increase in charges retroactively on consignments that landed prior to the new charges/rates. 17 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

18. TRANSPARENCY Many of services providers are not transparent in dealing with the cargo owners. This is shown through: Non-publishing of tariffs Hidden charges Introduction of charges at the whims and caprices of services providers without consultation with the consumers or their representatives Lack of notice on the introduction of new charges/or increase in existing charges. 18 STANDARDS IN SHIPPING SERVICES - THE NIGERIAN EXPERIENCE

19. If we are to be among the top twenty economies in the world by the year 2020 we need to embrace international standards in the supply of shipping services in the country. These are some of the hallmarks of the global economic giants we seek to emulate. Operating best practices will give Nigeria a competitive edge in international trade and make us investor friendly. 19 CONCLUSION

20. Thank you for listening.!!!     20