As technology advances, businesses across the globe are constantly upgrading their systems to provide better services. However, these upgrades come with challenges, especially when it comes to sensitive sectors like logistics and cargo clearance. Recently, Nigeria has been witnessing a significant disruption at the Apapa and Tin Can Ports in Lagos due to banks migrating their systems, causing delays in cargo clearance and ultimately impacting the cost of goods in the country.
Cargo clearance in Nigerian ports typically follows a stringent process. Before goods can be moved, importers must complete certain documentation, such as Form M and the Pre Arrival Assessment Report (PAAR), and pay customs duties through commercial banks. However, recent network migration and system upgrades by banks have led to substantial delays in clearing goods. Many agents report that they can’t proceed with customs payments because of the banks' disrupted services. As a result, a substantial number of containers are now stuck at ports, accruing additional fees.
When goods remain in the port due to delays, they accumulate storage and demurrage charges, costs that importers are forced to absorb. According to Mr. Frank Ogunojemite, National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), the inability to process payments directly impacts cargo owners, who must then pay these extra fees.
Without clearance, containers sit in the port longer, racking up costs. The cargo owners then pass on these costs to consumers, which results in higher market prices, Ogunojemite explained.
One of the biggest obstacles is that once an agent initiates a transaction with a particular bank, they are unable to switch to another bank if issues arise. This means agents are often left waiting for the initial bank to resolve its issues, even if this takes days or weeks. This inflexibility compounds the delays and makes it challenging for agents to manage time-sensitive cargo shipments.
There are concerns that with more banks, such as First Bank, announcing upcoming system upgrades, the situation may worsen, leading to even more bottlenecks in the clearance process.
Haulage operators are also impacted. Since funds often take days to reflect in their accounts, truck operators are hesitant to pick up cargo unless they receive full payment. For first-time customers, this delay can result in days or even weeks of waiting for the funds to appear. Chief Remi Ogungbemi, Chairman of the Association of Maritime Truck Owners (AMATO), noted that in some cases, haulage operators lost clients due to these bank delays.
By the time the money arrives, another operator may have already picked up the cargo. It’s a loss for the truckers and adds more time to the cargo’s stay at the port,Ogungbemi said.
The delays are prompting stakeholders to call on the government to consider compensatory laws. Under such laws, waivers could be offered to importers for delays that are beyond their control, such as those caused by bank network issues. Mr. Ogunojemite emphasized that, although banks often apologize for their service disruptions, these apologies do not lessen the financial strain on cargo owners.
Compensatory waivers would at least acknowledge the challenges that importers are facing due to issues outside of their control, he suggested.
As containers remain in the ports longer, the associated costs increase. Ultimately, these additional charges translate into higher costs for consumers, contributing to Nigeria’s rising inflation. For a country already grappling with high living expenses, the delays and subsequent price hikes are a burden on the average citizen.
As Nigeria’s banking sector continues its migration to improved systems, collaboration between banks, the government, and the logistics industry will be essential to ensure smooth cargo clearance and prevent further disruptions. Compensatory measures, flexible transaction systems, and real time solutions for delays could help mitigate the financial and operational impact on importers, truckers, and consumers alike. For now, stakeholders in the cargo and logistics industry will continue to wait, hoping for a swift resolution to these challenges.
In the long term, resolving these issues will be vital to maintaining a robust supply chain, which is essential for stabilizing the cost of goods and ensuring Nigerian consumers are not disproportionately affected by these logistical setbacks.