Shippers, Maritime Lawyer Support Replacement of Container Deposit with Insurance Cover
By Francis Ugwoke
*It will end decades of endless frustrations by shippers
*Container deposit is a fraud, says maritime lawyer
By Francis Ugwoke
Shippers associations in Rivers and Bayelsa have expressed their support for the planned introduction of insurance cover to replace payment of deposits for empty containers by importers.
Importers are required to pay between N150,000.00 and N200,000.00 as container deposit on every empty container used in conveying goods into the country by multinational shipping agencies.
With complaints trailing the container deposit policy over the years, the Nigerian Shippers Council (NSC) has been planning to introduce insurance cover as an alternative.
Reacting to the plan,the Chairman, Bayelsa and Rivers Shippers Association, Mr Offon Udofia told SHIPPING DAY in a phone chat that such arrangement was a welcome development and good for the shipping industry.
Udofia said it will not only save the billions of Naira being lost by shippers but also save them the stress of getting their container deposits when the empty containers are returned.
Udofia who is also the Executive Secretary, Institute of Export Operations and Management (IEOM) assured shippers all over the country that he would be ready to join the NSC and insurance companies for the actualization of the arrangement.
Commending the NSC for the idea, he urged the ports economic regulator to expedite action on the take off of the policy to end years of frustrations by shippers on the policy of container deposits by shipping companies.
He said the introduction of insurance as a replacement of container deposits will strengthen the bond between the shippers and the ports economic regulator which he said would be a big boost for the shipping industry.
Udofia said that with the current move, he will go all out to try to convince shippers associations all over the country to buy into the idea.
He said his association was already discussing the issue of Cargo Defence Fund (CDF) which he described as a kind of insurance with some insurance companies.
Similarly, a maritime lawyer, Mr Kasa Opara who welcomed the idea of insurance said it was better for importers than paying deposits that are hardly refunded.
According to Opara, insurance is much more advantageous for Nigerian importers than deposit.
He described as a fraud the payment of container deposit because of the fact that in most cases the shipping companies do not refund the deposit with flimsy excuses.
“Insurane is a lot better than container deposit which has not been in any way advantageous to importers. You find out that after paying that deposit because of the nature of business in Apapa, you end up not getting tht refund and even when you get the refund iy id noy sd muvh sd ehsy you paid. And I see that container deposit as a fraud because even when you pay deposit even when you return the container that deposit can be kept as much as six months. So it is not working in our favour”.
Opara while commending the NSC for the move urged the Council to work hard to ensure that it becomes effective in the country.
According to him, shipping companies have over the years been ripping off importers in many ways including the issue of container deposit.
It would be recalled that the League of Maritime Editors and Publishers had also thrown its weight behind the efforts of the NSC to introduce insurance cover on empty containers used in bringing imports into the country as a replacement for the deposits being paid by importers.
The agreement with the shipping companies is that the shippers are refunded the deposits once the empty containers are returned.
But shippers have continued to lament that many shipping companies do not keep to the terms of agreement when the empty containers are returned.
In a State of the Nation Press Statement, the League said such insurance cover would address the cries of shippers whose refund is denied by shipping companies when the empty containers are returned.
The statement which was signed by the President, Mr Kingsley Anaroke and the Secretary General, Mr Francis Ugwoke, said such insurance cover will not just end the nightmares faced by shippers on the issue but will save them and the nation billions of Naira being pocketed by the shipping companies through some bottlenecks.
Noting that importers pay as much as N200,000.00 on one empty container, the group said it was better for both the shipping companies and the shippers to consider collaboration on the payment of the insurance sum.
For instance, the Group said the shipping companies can decide to insure its empty containers by asking for contributions from the shippers who will pay specific amount as part of the insurance cover.
The group added that the introduction of insurance cover as a replacement for payment of container deposit was also a boost to the nation’s insurance industry and the economy.
This will also create employment for many Nigerians in the insurance industry.
The statement commended the Nigerian Shippers Council (NSC) as the ports economic regulator for such novel initiative, adding that it will save the shippers huge sums of money being lost to the shipping companies who use all sorts of tricks to deny the shippers the refund when the empty container is returned.
Shippers and freight forwarders were advised to support the move by the Council as it will end payment of container deposits and the nightmare experienced in getting refund.
The group urged the Council to continue with the initiative by negotiating with insurance companies on the possible insurance cover for such empty containers.
According to the statement, the Council should do more by compelling the shipping companies and shippers to key into the idea as the best for the industry and national economy.
Urging the two parties (shipping companies/shippers) to accept the arrangement, the group said it remains a transparent policy in which no one will be cheated.
“Any of the parties, either shipping companies or shippers that do not accept the policy if introduced will not be seen as honest. It will save Nigerian importers billions of Naira that are being taken away by shipping companies who on return of the empty containers come up with stories around the refund. Besides, it will boost the nation’s economy with a lot job opportunities”, the statement said.
The group reminded shipping companies that it was only in Nigeria that container deposit is being demanded from shippers, adding it was not in practice in other maritime nations.
Noting that some shippers could be in the habit of not returning empty containers which is the reason for collecting deposits by shipping companies, the group said the insurance remains the best option to settle the problem.
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