INTERVIEW
Since the introduction of the National Automotive Policy in 2013, vehicle importation into Nigeria has been terribly affected. The policy has also affected players in the system, one of whom is Lagos-based Clarion Shipping West Africa Limited; an off dock terminal operator specializing in vehicles. In this chat with Roland Ekama, the General Manager of the company; Chief Frank Okocha spoke about how the bonded terminal has been able to weather the storm in the last two years, and the general implication of the policy.
What is the company's view about the auto policy; we have not heard anything from your company about how the policy has affected your operations?
That policy has destroyed automobile business in Nigeria. Government said the essence of introducing the policy is to boost local manufacturing, but I have not seen any viable assembly plant anywhere. I remember we were invited to one workshop at Lekki under the guise that the place is for assembly of cars, but when we got there it was just an automated computerized mechanic workshop and they were telling us that Nissan is almost rolling out some brands, but up till now we have not seen anything of such. I think that policy itself was meant to favour a particular group of persons thus it needs to be seriously looked into. Although I support and agree that there is need for local production and manufacturing of vehicles in Nigeria, but we need to know if really they are on ground to assemble vehicles, but I believe that it will be better for the federal government to phase-out this policy; it doesn't have to be automatic. The government can say this is where we want to get to in the next five years and between now and the next five years, this is what the duty on imported vehicles will look like and by the following year, they will come out to tell us what the duty payable on vehicles will be. However within the period the local assembly plant might be able to set up plants and they will be functioning to full capacity. It is when they do that, then they can now begin to implement the so-called policy because it’s a known fact that Cotonou port is where they are making the real money from.
I didn’t expect your terminal to be filled with vehicles at this point in time, what would you say is responsible for this?
Let say it’s an act of God because you know for last year 2014 this terminal was virtually a football pitch up to early this year. Before now we used to transfer 1000 cars; at time 500 units but the highest we have transferred this year has been 100 units, but the ones you are seeing and talking about is that we were extremely lucky to get this simply because we encourage the importer and the agent. And we promised to give them some incentives so, that was what actually kept us in business.
Is the company's relationship with Five Star Logistics terminal cordial at the moment?
Our relationship is still there, but the truth of the matter is that they too also have some problems because when you go to Five Star Logistics Terminal today is almost empty as well; the business is no longer what it used to be, but above all the relationship is still there, all our arrangement is still there but you know that you cannot give what you don't have. Our relationship came in at the peak of port concession and the essence of it is to aid them as regard berthing more vessels but now that the volume is extremely low; business has been dull but despite all odds the relationship is still cordial with Five Star Logistics terminal.
Transfer of vehicles from Tin Can Island Port to the off-dock terminal encounter numerous challenges; kindly tell us about it?
Of course you know all the challenges affecting our business from day one- firstly is the state of the road. The situation of the road is getting more difficult to access by the day. Two is that the documentation processes is also a very big problem to our business; especially with our transaction, which is not peculiar to Clarion alone but all bonded terminals. The processes are just too long and I thought by now customs would have streamlined some of the processes. For example you push in a transaction to the CAC collection point, move to bond from there it move to APM to TS and the process moves backwards again. To me, this is a very long process; and I expected that the customs would have been to streamline it and make the process a one stop shop.
We gathered that some of the drivers in the process of transferring vehicles from the port to the off-dock terminal divert the vehicles; how true is it?
No. It’s a mere rumour. It is not possible. If the drivers go away with the vehicles, it simply means that such vehicles did not enter here and if the vehicles did not enter our terminal then customs would have sealed up this place because they have records of all vehicles leaving the port to our terminal; more so, when we do transfer, people like us do get constant contact with our officers at the port. If they say for instance they transferred 100 units to this place, if the 100 units did not get here we don't go, but what I am saying is that it’s an unfounded rumour. No such a thing does exist here. Apart from the fact that sometimes we are given 100 vehicles to transfer and at the end of the day out of that 130, maybe step down which means we cannot transfer again. Even out of that 70 some others like fifteen or thirteen may not make it to the terminal because of their nature as a result stay in the port.
PTML uses barges to transfer vehicles to its off dock why can’t you emulate such innovation in order to ease transfer of vehicles to your facilities?
PTML can be able to do that because their off dock terminal is within the water line and with that they can easily use barges to convey vehicles to mile 2, but from the port to our terminal there is no water line and there is no way we can achieve such at the moment. Even if there are jetties around Alakija, Satellite area we will also put into consideration the nature of road because the roads from the water line to this place is not too good for that kind of business. For instance we transferred a large number of luxury buses from the port to this place and there is no way we make use of the water line. I am not even aware if we have jetties around here.
How true is it that your company embarked on downsize of its workers due to the auto policy?
Off course, there was a time we had no option than to reduce our staff strength because we cannot continue to keep over bloated staff and expenses in business. When things improve, of course those staff we sent on compulsory leave will be the first set of people we will ask to come back
The off dock terminals in Lagos are not viable at the moment considering the huge capital sank into such projects, what do you think is the way out?
Firstly, there must be a federal government policy compelling all shipping companies and terminal operators to stem at least 20% to 25% of cargoes to off dock terminals. If they do that, all the bonded terminals will bounce back and that will make the ports freer in so many ways which include ports congestion, it will encourage more berthing of vessels, there will be free space and it will also decongest the port access road. From here to Tin Can Island is up to three hours because of the bad road except you want to take bike. Man hours is lost which in turn has a negative effect on our operations and economy, therefore it is important to note that there must be a legal framework compelling both the shipping companies and terminal operators to stem such percentage I mentioned to off docks.
The terminal operators are saying that they don't have much at their disposal not to talk of stemming to off dock?
If that is the case, why is there congestion at the ports if they don't have much?
I choose to disagree with you on that because cargo dwell time has reduced?
Of course we know it has reduced but I can tell you that when you go to APMT to transact business, they tell you that they will book you one week ahead. What then will you say is the cause of that if not congestion and that one week ahead you must pay. In other ports it’s similar; if you go to Ports and Cargo there are containers there. It’s only their off dock that they give out containers; TICT is the same; there are plenty of containers that can be given out. We know that the ports are not supposed to be storage centre so they should do well by stemming some cargoes off dock, because it has a lot of advantages in the area of employment. If all the off docks are working then there will be jobs for our teeming youths , there will be other ancillary or indirect service as well for people to do, thus it has a multiplier effort.
Is it possible to give us a breakdown of vessels handled by the terminal in 2015?
I don't really have that figure off hand, but we have handled not less than 20 vessels. But the truth of the matter is that how many units of vehicles have been transferred to our terminal. The units are very negligible. At a time there was a vessel that came in with about 20 units of vehicles and at the end we were unable to get a single unit from that ship because the number itself was too small. The issue is not the number of vessels we handled but the volume of what we handled. As we speak some lines are merging and with that they have a halt somewhere.
What will be your advice to the new administration as regards your operations?
Government should take a critical look at the Customs and the way they operate with a view to making our Customs a modern one, where trade facilitation will be the key word and not necessarily revenue generation or duty collection. The emphasis must be trade facilitation but because they lay emphasis on duty collection, that is why things are not going the way it should be, which at the end brings corruption. Customs should de-emphasise physical contact with agents and importer which I believe will element corruption from the system. They should try to connect ASYCUDA with the agents so that from the comfort of their office they can pay duty conveniently because banks are online, they can access and then submit and customs can easily release from there. The shipping companies on their part have their own angle, because there is need for them to submit their manifest to customs on time. The importers and agents need to be honest in their declaration; they should play according to rules and regulations. The role of all the government agencies should also be spelt out for them because I see no reason NPA official should be at the port gates.
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