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NSC Dispute Resolution Reduces Cost at Ports

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Nigerian Shippers Council (NSC)’s resort to alternative dispute resolution (ADR) instead of litigation has reduced the cost of doing business in Nigerian ports, the council has said. The move has also led to the saving of not less than N200 million by the council.

It said in a statement in Lagos that ADR was gaining ground among stakeholders in the maritime sector of the economy, as key players in the maritime sector of the economy have started seeing the need to embrace ADR instead of litigation.

According to the council, it has consolidated on its dispute resolution activities which yielded satisfactory dividend to beneficiaries last year when it first made the attempt.

“Within the first few months of last year, the council was able to save for disputed parties a whopping sum of N200 million which could have been extra business cost to the affected shippers, besides the cost of litigation at law court”, it added.

Since the first quarter of 2011 when the council made the first successful attempt to settle cases which arose from complaints received from either the providers or consumers of services at the nation’s ports, the council complaint centre, established in April last year, has been a beehive of activities.

Between April and December last year, the council received a total of 66 complaints, resolved 54 to save over N800 million comprising N247.7 million, $93,000 and other foreign currencies.

Investigations revealed that most complaints were filed because shipping agencies and terminal operators often abuse their stringent bargaining positions to subject importers to unfair treatment, due to accumulated demurrage and storage charges as a result of delay that is difficult to attribute to the shippers.

“In most cases the importers have paid with pain, though in protest before engaging the service providers in time-consuming and costly negotiations and follow-up, which most times do not lead to refund. This undoubtedly leads to high cost of shipping and cost of port services which ultimately is transferred to the final cost of the products in the open markets”, it said.

NSC said many of the importers rely on clearing agents in the pursuit of their grievances with service providers, oblivious of the fact that they lack adequate theoretical knowledge of shipping.

According to NSC, which has Captain Audu Adamu Biu as its Executive Secretary, as a result of this, they approach the matter with utmost hostility, which often made them not to be treated with the required respect as customers.

Another reason for the mounting complaint against providers of services at the port is that there seems not to be standard penalty charges for replacement of container deposit refund. The operators therefore charge arbitrarily and excessively, and shippers have not taken this behaviour kindly.

In more general terms the complaints that were resolved amicably between the parties by the council were more of excessive storage and demurrage charges by terminal operators and shipping lines, due to wrong calculation of chargeable days occasioned by failure to provide suitable equipment for unloading of containers during physical examination, and by the refusal by some shipping companies to receive empty containers when returned.

It explained that the excessive and illegal demurrage charges by some off-dock terminals due to long and unnecessary delay in clearing bills orchestrated some of the complaints which the council settled between the petitioners and the service providers.

“In some cases, the delay arose as a result of closure of the terminal by the Nigeria Customs Service, unauthorised transfer of cargo to an unapproved warehouse, consequent upon which the Nigeria customs service refused to carry out examination at the warehouse”, it added.

The result of the conflict resolution by the council confirmed the harsh condition under which the Nigerian business class may have been operating at the ports. It also revealed how the Federal Government has successfully used its agency, the Nigerian Shippers Council, to keep inflation under control, while keeping the helpless middle-class port operators in business.

Some stakeholders, especially importers and freight forwarders who spoke to THISDAY, also corroborated the position of the council.
A Lagos-based importer, Mr. Livinus Etabuno, said: “Many of us ought to have been sent out of business if not for the various interventions from the shippers’ council which curtailed the extortionist tendencies of some of the service providers through bogus levies and charges”.

He lauded NSC for its interventions, pointing out that its prompt intervention through ADR have helped in controlling inflation through appropriate cost of warehousing, marketing and distribution cost, as well as ensuring effective profit margin, all in a bid to ensure a realistic price of goods for the end users.

The importer said he has benefited immensely from the council ADR mechanism, pointing out adding that government had by so doing, saved many importers like him from going out of business because of the avoidable levies, loss of capital and jobs and prevent the nation from galloping inflation.

Some firms and other individuals have also benefited from conflict resolution service of NSC. These include Niger Delta Power Holding Company Limited, New Care Ventures, and Exodus Collection.

Niger Delta Power Holding Company Limited had in September 2011 petitioned NSC complaining against non enforcement of the government approved 70 per cent waiver on national independent power plants (NIPP) projects container against Sharaf Shipping Agency Limited.

This was in respect of 15 container numbers CATU 8422998, TEX U5563428, MLCU 9318362, CZHU 8912296, and INKU 2569124 covered by bills of lading QENA 3JKOO and QEENA 3L200.

Article credit: Thisday Newspaper

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Updated 6 Years ago

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