Stakeholders in the maritime sector have expressed concerns over the newly-introduced Nigerian Insurance Industry Reform Act (NIIRA) 2025 – the container insurance regime, warning that the abolition of container deposits may create loopholes for abuse and trigger operational challenges unless backed by strict regulatory enforcement
Recall that the NIIRA Act 2025 that was signed by President Bola Ahmed Tinubu officially abolishes the long-standing practice of collecting container deposits. Under Section 203 of the Act, the deposit regime will now be replaced with a mandatory Container Insurance policy, an overhaul that has sparked both optimism and fear within the industry.
At a recent stakeholders’ engagement, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) called on maritime stakeholders to champion the implementation of the new Container Insurance law, describing it as a landmark reform that will eliminate the controversial container deposit fee and strengthen Nigeria’s business 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 had also revealed that more than 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.
However, speaking exclusively with Shipping Position Daily on the implications of the new law last week, President of the Shippers Association of Lagos State (SALS), Rev. Nicodemus Odolo, said that while the removal of container deposits appears favourable to shippers, the transition to insurance-based coverage may introduce fresh challenges, if not properly regulated.
Odolo noted that although shippers may find insurance premiums “reasonable,” the reform could inadvertently create opportunities for abuse. He warned that without strong checks and accountability, the new model might encourage negligence among importers and transporters, as some could choose to pay insurance premiums while failing to return empty containers.
Despite these concerns, Odolo emphasized that shippers never should have been paying container deposits in the first place. He argued that the trade community must now take responsibility by ensuring timely return of containers to designated depots to prevent being blacklisted. Odolo recommended industry-wide collaboration and stricter enforcement mechanisms.
The Shippers’ President also pointed fingers at transporters as the most common point of container loss or diversion, noting that some trucks divert containers with import or export goods, while others disappear with empties after discharge. He stressed the need for clear accountability.
“They are giving the insurance industry another ‘chop-chop’. What I’m seeing ahead is still going to be crisis. Many people, because the container was insured, may dispose of the container carelessly. We have seen situations where people take delivery of non-returnable containers and simply abandon or divert them because what is payable by insurance is less.
“Shippers must encourage their members to return containers promptly. Any shipper who refuses to return a container should face sanctions. If he has exports, no shipping company should pick it. There must be a union-type arrangement on this. If a transporter takes a container and fails to return it, he must be blacklisted and made to pay for the container. Everyone must own up to their responsibility under the new system.” he stated.
A former National Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA), Babatunde Mukaila, said the shift from deposits to insurance makes little difference, unless Nigeria addresses deeper systemic challenges undermining port efficiency.
Mukaila noted that the recurrent delays, infrastructure gaps and procedural inefficiencies in Nigerian ports often contribute to container retention and associated costs, making the debate about deposit or insurance secondary to the need for comprehensive operational reform.
According to him, unless ports function optimally, even a well-intended policy such as the container insurance regime may not fully eliminate the financial burdens and disputes shippers have historically faced under the old deposit model.
“Six and half a dozen is still the same thing,” Mukaila said, describing both systems as fundamentally similar in outcome if operational bottlenecks persist. “Container deposit is an aberration and shouldn’t be. Nonetheless, we need an efficient and effective port operations to make good case against deposit on container in Nigeria.” he noted.
On his part, Secretary General of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr Festus Ukwu 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
