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Row over demurrage, costs hampers cargo services

A cargo plane at the airport.

…NAHCO, SAHCO insist on 100% payment
…We deserve waivers, say freight forwarders

The vigorous controversy is brewing between customs agents at the cargo terminal of the Murtala Muhammed International Airport (MMIA), and their handling companies over demurrage incurred during the recent lockdown.

While the ground handling companies – Nigerian Aviation Handling Company (NAHCO) Plc, and the Skyway Aviation Handling Company (SAHCO) Plc, have directed all agents to remit full payment of demurrage amassed, the freight forwarders are insisting on waivers.

The recent five weeks of lockdown in Lagos, Abuja and Ogun State stalled nearly all activities at the Lagos Airport, despite non-restriction of cargo air travel by the Federal Government.

Many agents, however, returned to the terminal last week to discover heavy demurrage bills levied on their cargoes at the point of clearance. The development has further stalled activities at the cargo session as agents protest against “the obnoxious” demands.

Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA), Lagos Airport Chapter, Emmanuel Njoku, yesterday described the insistence of the two handling companies as a violation of the Federal Government’s directives on the lockdown of Lagos, Ogun and Abuja during the period.

Njoku explained that when his colleagues resumed on May 4th, following the lift on the lockdown, NAHCO and SAHCO managements insisted that the agents must pay demurrage for shipments affected by the lockdown.

He noted that the Federal Government had given approval for clearance of essential materials and vaccines as regards to Covid-19 pandemic. Besides, he observed that their members at the seaport did not pay demurrage during the period, and wondered why they would be compelled to pay such at the airport when the order for the lockdown was not from ANLCA. He, however, decried that so far, the Federal Airport Authority of Nigeria (FAAN), had not deemed it fit to wade into the controversy to restore normalcy.

Njoku said: “We operate an open market where the same importers who use the seaport are still the same importers who use the airport cargo, and these goods arrive at the same market as their final destination. The goods from the seaport never paid demurrage, but NAHCO Aviance Plc, and SAHCO Plc want the goods from the airport cargo to pay demurrage within the same lockdown regime.”

However, SAHCO said there was no going back on the payment of demurrage by the customs agents. The Managing Director, SAHCO, Basil Agboarumi, said the ground handlers were also hard done by due to the lockdown with about 90 per cent revenue losses amid heavy overhead cost-covering over 4,000 workers.

Agboarumi added that unlike the maritime sector, where the Nigeria Ports Authority (NPA), absorbed some waivers by giving credit notes to terminal operators, Agboarumi said the reverse was the case in the aviation industry where FAAN and the Nigerian Civil Aviation Authority (NCAA), refused to do the same for ground handlers.

“The Aviation industry is bearing the brunt of Covid-19. Throughout the period of the lockdown, and as the airports and airspace were shutdowns, safe for approved flights, the ground handlers maintained operations throughout in the handling and delivery of essential cargo as released by Nigerian Customs Service in line with the laid down procedures of Government.

“We have done this irrespective of materially increased costs; including hazard allowances, Personal Protective Equipment (PPE), and others. We have also maintained all infrastructure, power generating and security required to keep all cargo in our custody safe and secure irrespective of the lockdown and mounting expenses like rent and service recovery charge due to FAAN. All these costs, whether standard or ad-hoc have been borne by the handlers,” Agboarumi said.

In agreement, Head of Corporate Communications, NAHCO, Samuel Akinrinmade, said ground handling companies were private companies just like the Port Terminal Operators in the seaports.

“Cargo agents, many of whom work in Custom Bonded Warehouses in both the seaports and airports and or belong to associations that operate in same, understand this and the fact that both maritime and aviation industries are in the same economy.

“They should, therefore, direct their grievances in the right direction away from the Ground Handling Companies to the appropriate quarters to ensure their desired result of equity in all Customs Bonded Warehouse whether in the seaport or airport”.

“We are a responsible corporate organisation, employing over 2,200 Nigerian and affecting over 100,000 people in Nigeria directly and indirectly. COVID 19 has affected the aviation industry the most.

“Today, our industry is faced with revenue loss and cash crunch. Ground Handling Companies are critical aviation service providers and greatly affected. Our cost of operations has risen materially in light of the new safety measures in our operations and all the safety equipment, systems, PPE etc that we have put in place for our staff, customers and stakeholders.”

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