Exporters Seek Withdrawal Of New Terminal Charges

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The Head of Logistics,
Rubber Estates Nigeria Ltd., Mr Stephen Usih,  has urged terminal operators to withdraw new Terminal Handling Charges (THCs) on container -laden exportable goods which took effect June 1.
Usih, who said he had the mandate of other exporters to speak, made the plea in an interview with newsmen  in Lagos.
A breakdown of the new THCs shows: N40,000 on 20 ft. container and N60,000 on 40 ft. container.
He suggested that the THCs should be suspended to allow a stakeholders’ meeting of terminal operators, shipping lines, exporters and Nigerian Shippers’ Council.
“Everyone involved has to discuss on the issue to have realistic figures as terminal handling charges.
THCs are charges collected by terminal authorities at each port against handling equipment and maintenance.
Usih said that the shippers (exporters) were also paying the N4,123 as delivery charges which had to do with the loading of empty containers and off-loading of full containers.
According to him, N4,123 was charged at the exchange rate of N165 to a dollar, an equivalent of 25 dollars per container.
“If now, the current exchange rate is N350, at 25 dollars per container, exporters are still ready to pay N8,750 as delivery charges.
“Even if increased to 50 dollars per container, the exporters will still pay N17,500,’’ he said.
According to him, exporters will accept a reasonable increase in delivery charges based on the excuse given by the terminal operators about the prevailing exchange rate of the naira to the dollar.
“Considering the nature of services rendered by the terminal operators, which is to load empty containers and offload full containers, N40,000 additional charge on a 20 ft container is not justifiable,’’  Usih said.
He also requested that the payments “have to be made directly to the shipping lines as being done over the years, where payment is done at the time of collection of the Bill of Lading after departure of containers’’.
“Globally, the charges are paid after the departure of the vessel but now exporters have to pay 48 hours before the arrival of the vessels, thereby making the documentation processes more cumbersome,’’ Usih said.
He told our sources  that exporters were not ignorant of the situation of the country “but are saying that things should be done appropriately’’.
Usih said that it was the noble idea of the Federal Government to diversify the economy into non-oil exports with agricultural commodities accounting for 90 per cent of the non-oil exports.
“With the government’s quest to diversify the economy, the key thing is to make export business profitable in order to convince people to venture into it.
“With the new terminal handling charges, the objectives will not be achieved.
“It will scare away new entrants into exports. With government’s pronouncement, people have started exporting at least one container load on monthly basis.
“ An exporter who is exporting a container load of a commodity valued at N4 million per container, the maximum profit he could make is N100,000,’’ Usih said.
According to him, with the additional N40,000, the terminal operators have already removed 40 per cent of the gross profit and this will not make the export business lucrative any more.
He said that Rubber Estate Nigeria Ltd. (RENL) shipped 1,000 containers of processed rubber annually, “and you can imagine the effect the terminal handling charges would have on our company’’.
“With the new charges, this will translate to N40,000 multiplied by 1,000 containers which will make a total of N40 million to be paid by our company as terminal handling charges,’’ Usih said.
He told The Tide that the company might reduce its staff strength with the present situation.
In a reaction, a source close to the Seaports Terminal Operators Association of Nigeria (STOAN), confirmed the introduction of the new container handling charges for exports.
The source told The Tide that since the last 10 years of port concession, terminal operators were handling containers of exportable goods free of charge.
According to the source, the free charge cannot go on forever considering the situation in the country.
He said that the newly-introduced charges on containers to be exported were still lower than what importers were paying.