Apparently enraged by the age-long exploitation by shipping companies through the controversial collection of container deposit from importers, maritime industry stakeholders are calling for a shift from the current opaque refund system, to an insurance-based alternative, describing the existing practice as outdated, exploitative, and a major contributor to port inefficiencies.
They argue that adopting insurance-backed models would enhance transparency, reduce financial burdens on freight forwarders, and improve ease of doing business at the nation’s seaports.
Shipping companies demand container deposits primarily as a security measure to ensure that containers are returned in good condition and within the agreed time frame. However, critics of the container deposit system argue that it has become a tool for exploitation rather than a genuine logistics safeguard.
One of the major concerns raised by sources who spoke with Shipping Position Daily is that refunds often take excessively long time, sometimes stretching into several months leaving freight forwarders and importers helpless. In many cases, shipping companies are believed to use these deposits for private gain, earning interest on funds that rightfully belong to their clients.
Furthermore, industry stakeholders have described the practice as outdated and no longer in line with global best practices. As a result, many stakeholders are now pushing for the adoption of insurance-backed alternatives, such as Goods in Transit (GIT) insurance models to promote ease of doing business and reduce the persistent bottlenecks plaguing Nigerian ports.
Shipping Position Daily recalls that global shipping giant CMA CGM, had announced the removal of the requirement for container deposits for all new bookings, effective from May 21, 2025. This decision was made after considering feedback from customers and aims to streamline operations and reduce financial strain on shippers.
This removal of container deposits is expected to make shipping more transparent and cost-effective for shippers. The Nigerian Shippers’ Council (NSC) has however acknowledged the decision and lauded it as a positive step towards a more efficient shipping environment.
Amid growing outrage over alleged fraud in container deposit practices, the Head of Research for Sea Empowerment and Research Center (SEREC), Dr Eugene Nweke has revealed that over 100,000 empty containers now lie abandoned at Nigerian seaports, compounding fears of environmental, health, and economic risks.
According to SEREC’s comparative study, the average cost of shipping empty containers from Nigeria to China currently ranges from $2,000 to $4,000 for 20ft containers and $3,500 to $6,000 for 40ft containers. The cost for Less than Container Load (LCL) is estimated between $150 and $500 per cubic meter. The study also found that a vessel with a capacity of 4,500 Twenty-foot Equivalent Units (TEUs) would require an estimated $9 million to repatriate the empty containers — a significant burden for shipping companies.
In an exclusive chat with our correspondent last week, the immediate past acting National President of the Association of Nigeria Licensed Customs Agents (ANLCA), Dr Kayode Farinto noted that for over four years, stakeholders have been at loggerheads with the Nigerian Shippers’ Council over the controversial container deposit system, which he described as exploitative and unjust.
Farinto decried how shipping lines have turned container deposits into a lucrative venture at the expense of Nigerian importers and freight forwarders, stressing that many companies hold on to these deposits for months, using the funds for private gains, withholding interests accruable to the original payers.
Addressing the argument that container deposits are the only incentive for freight forwarders to return empty containers, Farinto disagreed strongly. He argued that a more effective and globally accepted system, Goods in Transit (GIT) insurance can take its place.
“No shipping company refunds your container deposit under one month. That means they are trading with your money. A freight forwarding company can be asked to provide a GIT insurance that covers a year. If a container is not returned, the insurance company is held responsible. They will know how to get their money back from the forwarder,” Farinto explained.
Also speaking, Secretary General of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr Festus Ukwu emphasized that for effective management of empty container returns, every shipping line operating in Nigeria, must establish an empty container depot. He proposed that all discharged containers be returned through a unified container deposit centre, from where they would be loaded onto vessels heading back to their country of origin.
Ukwu also revealed ongoing stakeholder efforts to end the practice of collecting refundable container deposits from importers and freight agents. According to him, a new system involving Insurance is under consideration. This system according to him would replace cash deposits with an insurance-backed guarantee to ensure containers are returned without financial exploitation.
He however called on other shipping lines in Nigeria to follow the example of CMA CGM, urging regulators, especially the Nigerian Shippers’ Council, to fast-track the implementation of a new legal framework that bans the imposition of container deposits on Nigerian shippers
“If it is insured and the container goes back and gets to them, there’s no need to collect container deposits. The truth is, most times, these shipping companies don’t return the money. They find one trick or another to exhaust the entire deposit,” Ukwu said.
On his part, the Tin Can Chapter Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria (APFFLON), Clinton Okoro lamented the exploitative practices of some shipping companies, noting that in some cases, excessive demurrage is charged weeks in advance.
Okoro recounted a personal experience where he had to challenge an inflated bill involving 10 containers by a shipping company. He disclosed that some stakeholders have already taken legal action against certain shipping lines, including Mediterrian Shipping Company.
According to him, the Nigerian Shippers’ Council has previously emphasized that container deposit refunds should not exceed four days, or at worst, one week. However, many freight agents still wait for months without refund, with no interest paid on withheld funds.
