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Lagos importers’ case for demurrage waiver over Wharf road closure, valid—BH Analysis


Background: Relying on the report commissioned by Akintola Williams Deloitte on impacts of bad port access roads and mainly Wharf road since they became impassible over the years, importers and Nigerian shippers sent as much as N668.5 million daily on demurrage due to the bad state of the Wharf road.

Now, if demurrage upon the bad road without the partial closure of Wharf road, will amount to N243.9 billion (that is N668.5m multiplied by 365 days), it means that there will be rise in the volume of delayed cargoes which will definitely amount to jump in daily demurrage expenses by importers.

Otherwise, importers and their clearing agents are to pay more than N243.99 billion in the next 12 months (between July 2017 and July 2018) on demurrage.

In an interview with the president of Auto Spare Parts & machinery Dealers’ Association (ASPMDA), Chief Daniel Offorkansi, he said “Since last five years when the port access roads became too bad, we have been paying unprecedented amount in surcharges for delays of our containers at Lagos ports which are not our fault, but we are forced to keep paying”.

“Now, the major port access road is partially closed, what we have been paying as demurrage is being doubled. It is unfair. That is why we are calling for waivers because it is never our fault as I said earlier.

“Should we pay for official negligence of the maintenance of the nation’s gateway? I stand to be corrected in this regard. Importers of containers through Lagos ports deserve waivers at least within this period of one year the road will be partially closed. This is our prayers.

Also commenting, an official of Alaba International Traders Association (AITA), Chief Rufus Obigbo said “The federal government must consider importers for waivers because the time it takes to move a containers away from the ports have doubled and not only that, there has been a rise in container falls on the way due to bad roads”.

“Why the delays in moving cleared containers are doubled is that the time it takes a hired trailer to even access the port for loading and move away from the ports has doubled since the resumption of the partial closure.

According to him, “this means that if you have been paying N250,000 as demurrage for about nine days delay, am just using the figure, now the delay has jumped to over 15 days due to no fault of yours. Why should I pay penalty for no fault of mine?

Obigbo therefore joined in the calls for waivers over the partial closure of the Wharf Road in Apapa.

Further analysis advanced by the auditing company, Akintola Williams Deloitte showed that in a value chain analysis of a 20-foot container laden with cargo worth N44.42 million ($100,000) imported into Nigeria from China, about N6.5 million would be required to clear and transport a container out of the port.

Of the N6.5 million, the firm noted that shipping companies were responsible for 13.8 per cent of the port cost (N897,000); terminal operators 1.8 per cent (N117,000); Customs 82.1 per cent (N5.3 million); transporters 1.1 per cent (N71,500) and clearing agents (N78,000).

Business Hilights gathered in the course of this investigation that a consortium of importers, clearing agents and other port stakeholders’ negatively impacted by the closure order are currently working on presenting a letter of request for increase in the number of demurrage-free day at the Lagos ports in form of waiver as the road reconstruction lasts.

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