Cargo business in Nigeria is presently not where it should be based on many factors ranging from poor government policies, multiple taxes, inexperienced freight handlers, poor packaging and negative attitudes of agencies personnel at airports. In this interview with SHOLA ADEKOLA, the Group Managing Director, Widescope International Group of companies, Honourable Segun Musa, speaks on the needs for the cargo to be overhauled to attract patronage from foreigners and reduce cost of cargo freight.
HOW can Nigeria increase exports to other countries and what is the role of the airport authority in providing enabling environment?
Yes, thank you very much. First and foremost, let me start with number one. There must be enthusiasm, there must be keen interest for us to embark on this journey. What do I mean by keen interest? Starting with the framework that will enhance efficiency. Because if there is no efficiency, whatever we do will just be a child’s play. Talking about efficiency, we are looking at what are the commodities we want to export. Do we have the facilities that will enhance the free flow of those commodities? For instance, we are looking at perishables. Do we have the warehouse that can effectively manage perishables, especially if the flight is canceled or is not flying that day? Because there are perishables, if it is beyond the time bound, it will spoil. Do we have facility in the export warehouse that can maintain it to the next day, the third day? That’s number one. Number two is packaging. It is conventional that some countries, especially European countries, I think I’m aware of an agreement that was signed that if your packaging does not meet requirements, they will return it or destroy it. So if you want to export and you have to invest so much in your export, and you don’t have packaging facilities, you don’t have people with the knowledge of packaging different items. Different items have different packaging. You don’t just use uniform packaging for everything. So you must be able to know what are the packaging that falls within hazardous, what are the packagings that fall within perishables, what are the packagings that fall within some other cargoes that are specialized cargo. So you don’t use uniform packaging. That’s another problem. Another thing is labeling. Are people aware of how to label their exports? So it does not get to destination and they mismanage it. Because if packages are not well labeled, when it gets to, if it’s fragile and you leave two signs of fragile there, then you just put something to compress it and it’s damaged. So all these are very, very important when it comes to exportation. And that’s why when you see us bringing cargoes from abroad, you see different labeling signs and everything. We need to train our people how to manage this. Very, very important.
Do you think Nigeria’s handling companies have the capacity for warehousing and packaging?
Yes. Coaching is another big headache at the airport. I remember at a particular time, my shipments, I almost lost most of my clients because I cater to most of the pharmaceutical companies and teaching hospitals. Each time I present my exports in the box, the next morning if it has to stay and it’s not going with the flight, the whole box is wet. And that’s to tell you the kind of warehouses they are managing. Until I decided to say, look, all my shipments must go that same day. God help me it does not stay till the next day. It will be messed up. I have to go and look for another packaging for it. So most of them don’t even know the implication. And they are not even giving priority to exports. The cost is a key factor that also encourages people to patronize that corridor. If the cost is so expensive, you have minimal people patronizing. It’s like people are even forcing themselves to use aviation for exports because the landing cost is extremely high. There’s nowhere even in the West African countries where you get exports at that kind of value. That’s why you see what we are exporting is just small items. Everything is less than 10 tons, 20 tons and the rest. Those are perishables. Nobody can afford to invest fully in perishables because the landing cost is too expensive. They’d rather go by sea. Sea is having its own frustration as well. But it has to meet with time and stuff like that. I want to go with aviation. It’s extremely high. We don’t have enough airlines that bring to destinations. We don’t have the facility in the warehouses that can sustain exportation. So that when it’s not going that same day, you’ll be reassured that the export is well secured. So if you don’t have those facilities, it’s a big challenge. It’s a big problem.
Packaging and labeling is a specialized trade. Any freight forwarder that wants to go into packaging and labeling must go and learn about it. So don’t just perforate cartons and load vegetables inside and just use marker to write something. Don’t do that. It’s a specialised trade. People should also be encouraged to venture into it.
It is a specialized trade. People should also be encouraged to venture into it. And you see, when you have a minimum standard, if the handlers, the airlines say, look, if you don’t meet up with this packaging, just like when you are carrying hazardous cargo, it’s global. You must meet that standard. No airline will carry, no handlers will handle it if it doesn’t meet the requirement. The same thing we do for other cargo like perishables and the rest of it. A lot of people that are trained to handle packaging get the right material and do the right labeling. And if you, as a freight forwarder, you want to venture into it, go and learn it. And search for the right material for the right cargo. Then people will begin to embrace our exports over there. Otherwise, if you get to that place, it might have perished or contaminated, and they will reject it. And you lose a lot of money. A lot of people, a lot of people have gotten their fingers burnt. That’s why they are not venturing into exportation again. So all these are vital and very, very important for us to drive our exports to the aviation.
Assess the present status and the volume of exports by air and other means?
I think we are not doing much on the Air. You can see a lot of crowds. The aviation sector is doing one export or the other, especially personal effect, and probably food items for the stalls. But we could do far better than that. We could do far better than that. If you are not sharpening aircraft, it will be a bit difficult for you to be able to meet up with the expectations. A lot of people do charter, and they are sure that once they are doing charter, it must leave that same day.
In order to pay more for cargo, people now bring their goods using the belly of the aircraft to come in. What is your take?
Yes, yes. That is another issue, because whether we like it or not, we are freighters for cargo, and we have aircraft that have bellies for accompanying baggages. So they are not specialized for exports. It is just for personal baggages and stuff like that. So by the time you now begin to put export goods under it, all kinds of exports, you endanger the lives of people inside the aircraft, because some of them might be contaminated. Some of them might be radioactive. Some of them might be hazardous. So most of the time, when you see our local flight, some of them carry hazardous items without even having trained about it, because they need to do local distribution. So everybody goes to MM2, drop their cargo there, and they give it to a passenger airline to take it to a different state here and there. And people that are handling it, not all of them have knowledge on hazardous cargo. Somebody has just brought a parcel. Yeah, let’s load it. So it is just like standing on a time bomb. God forbid, if it escalates one day. You can imagine the number of casualties we are going to record. God forbid. So even if you have to operate within the local airports, either as an airline or a freight forwarder, you must also be certified as a hazardous or trained expert. Because it is not all the time you open what they are carrying as a parcel. You can bring something as small as this and it is radioactive. It could be explosive. You see, we have the problem of not everybody can even understand the labeling. Not everybody can understand. They don’t even know the implication. When they see a sign of hazardous on the cargo, because they want to take it back here, they will tear the hazardous, push it inside the local flight so it can go. So if we have been escaping it over time, God forbid we don’t get to a situation where we won’t be able to escape it.
As a facilitator, a trainer and an expert in the industry, what do you think can be done to ensure personnel handling these materials are well educated to ensure that safety is essential?
You know, a lot of people don’t even know the value of training. Even if you are making training to be free for them, they won’t attend. They will tell you they prefer looking for what they will eat than for them to sit down in the classroom and start learning. Until when we make it mandatory that you must be certified before you can practice. And if you are caught, not satisfied and you are trying to practice, you can be sanctioned. If there is no deterrence in place, everybody will just do things the way they like. There must be a deterrence factor in place so that everybody will be forced. I want to do a sport. Give us the evidence. And if you have to use a third party, that third party will lose his or her license if anything goes wrong. So there must be a deterrence factor in place. And that is where you will begin to see us as serious operators within our company.
When most airplanes bring in goods from abroad, they leave empty which has been a cause for concern. What is your view?
We need registered consolidators. They will buy space in the aircraft. They will buy space in the aircraft freighters. They will now market it. Everybody that has cargo going to that destination, they will take it to them. They will now consolidate it. It will take a week or two. They consolidate everything. They now ship it at once. The higher the volume, the lower the price of freight. If you are submitting your own of 100 kilos, 500 kilos, it will be more expensive than me submitting 10 tonnes. So whatever cost we are able to get on 10 tonnes, we can use it as a discount for every individual that has consolidated their cargo through you.
They will buy space in the aircraft, freighters. They will now market it. Everybody that have cargo going to that destination, they will take it to them. They will now consolidate it. It could take a week or two. They consolidate everything. They now ship it at once. The higher the volume, the lower the price of freight. If you are submitting your own of 100 kilo, 500 kilo, it will be expensive than me submitting 10 tonnes. So whatever cost you are able to get on 10 tons, you can use it as a discount for every individual that have consolidated their cargo through you. And when you see that the price is coming down, everybody will be consolidating more. Let me give you an example. In Belgium, DHL was a small operator about 20-25 years ago. But it is a consolidator. It has a franchise in Nigeria. Those big players in Europe, they consolidate their goods. Put it in the aircraft. Collect their freight. Now consign it to DHL. DHL will bring it to Nigeria. If DHL does not have much plane debt, they will bring it to Nigeria. It will be in their name. They will clear it and deliver locally here. That was how DHL became what DHL is today. Bigger operator that does not come to Nigeria, they give it to DHL. DHL will come and do it here. All those shipments are not directly from DHL. They are from other big players that do not come to Nigeria, Ghana, or any African country. But because DHL is here, they give it to DHL. So DHL now establishes a relationship with those importers in Nigeria.
So DHL, instead of going through those consolidators, they go and meet manufacturers direct. And say, we have the mandate of the importer in Nigeria to bring the shipments on their behalf. So they now start doing their own consolidation. So those who are frustrated, so you don’t come and you don’t patronize them again, whatever they have, say they can’t get that volume again, you just say, just take care of commission, push it to DHL. DHL will do Nigeria better. And that was how DHL became a big player. The same to UPS and FedEx. So if we can start same here, that look, anybody that wants to go to London, bring your shipments. Instead of you going to airline and getting about five pounds, me I give you 1.5 pounds, I give you two pounds, you are saving about three pounds. So you can imagine the number of people that will come to me. Because they are already making more profit. If they go alone, it will be expensive. But if they pass through me as an agent and a consolidator, it will be cheaper. That’s the only way you can encourage people to start exporting. If export comes at an expensive rate, nobody will use our aviation. Because the final cost at destination, the timing if there will be more patronage or there won’t be further patronage. So if we can have well-trained consolidators that can have a good robust interaction with the airline, that look, we will be giving you 10 tons every week or twice a week, we give you 20 tons twice a week or once a week, is to encourage those airlines, we give you fees, how much are you paying for these 20 tons fees? It will come at a reasonable cost. And that’s the only time people can say, oh, the cost of freight is becoming lower. That’s one stage. Another stage is, the aviation industry is charging too much levies, charging taxes on those airlines that are exporting. The charges are extremely high. Extremely high. So if all those aviation actors, and state actors, and, NAMA, NCAA, FAAN address, are charging so exorbitant, they will add up to the freight. It will be part of the component of the freight. But they will pass it to the consumer. So if all these charges, you say, okay, we want to encourage our export. For airline that is carrying export, instead of one thing, okay, we are charging 7 Naira per kilo, we are charging 2 Naira because it is export.
Are you saying that, taxes and charges, companies should look into it?
Look into it. That component should be reviewed. So as to encourage more freight
collection by the airline. If it’s too high, you see, you want to make people to patronise aviation, you make it, you put in a lot of incentives, and make it enticing. So you can imagine the volume going through air freight. Probably they are charging about 7,000, 4,000 for 40 ft, or 2,000 for 40 ft. I say, look, yes, it is much, and it’s going to stay like 20 days on the water. But we are delivering the next day. I will make sure the difference won’t be that much. If you give us 20,000 kilos, we will be charging you like times 2, or times 1, which is about 20,000. When you look at the time you are going to save, the turnaround, because it is also a component, the turnaround time, you also put it at a cost. So if it gets to UK tomorrow, they buy it, they send me my money, I go to farm, I go to my industry, I bring another one back, I sell. You can imagine how many times to go in a week, or in a month.
Besides FAAN, NCAA and NAMA, the ground handling companies also collect charges. What about other ancillary service providers?
They also collect. So, all these are components that we must review, to ensure that whatever we charge, per freight, or per kilo of shipment, comes at a minimal cost. For as long as you continue, increasing all those components of charges, levies, taxes, the freight won’t come at a reasonable cost.
Complaints about multiple inspections by government agencies?
Yes, when you have multiple agencies, doing virtually the same thing. For instance, custom department that will check your cargo, will be like about, four, three, or five, will check it, and this one will query the same thing, this one will query, and that one will query. It’s very frustrating in business. The only person that needs to check your export, is only customs. So if there are discrepancies, they call the agency responsible, who does the script as well. That’s what is applicable all over the world.
Poor infrastructure?
Yes, the infrastructure is archaic. It’s too old. Even if you look at the warehouses, they are just like garages. Even some garages are better than the warehouses we have for exports. Nobody does that. People should go and see what is applicable in other places around the world. If you want to attract business, you too must be attractive. When you have warehouses that are like the ones they are using in the 40s in Europe, or in the 30s in Europe, nobody does that
What kind of unorganized system is that? Who does that? Who does that? At a stage we stopped custom long groom because you have to go from one seat to the other to pass document. So let’s make it paperless. Let’s use a CPC, Central Processing Center so that it will be minimal, you just submit everything online The interaction will be minimal, interface will be minimal. But what we have is Long room, we are still having today long room, it’s only the name that changed. Nothing has changed you see people referring you from warehouse to the CPC long room again. The document that has passed through the CPC you will still return it back there, so where is the trade facilitation? Where is the ease of doing business? And we said on many occasions for us to align ourselves with international best practices we could as well say let’s automate all the system, I don’t need to know a custom officer before I can go. They don’t even need to know my license every license customers want to continue using licenses which is abnormal under this dispensation, you don’t need custom license you only need your team, but even if they want to continue generating revenue through issuance of licenses they could as well say okay the license will not come in the name of the company, It will come as a code It will be difficult for you to know my code even if I give you my code number and you are looking for my cargo they might not allocate my shipment to you. So you won’t even know who they allocated the shipment to, all I need to do is to input everything online and It hits your server. You start processing it If there is a query you must send me a text message and email that there is a query so I can attend to it immediately
And once I file whatever I need to file to remedy that you continue processing. You advise me to pay my duty once you attach the report of the scanning to whatever I have declared you allow me to pay my duty and release my cargo.
I go on my own nobody lays siege on me on the road and tie me to FOU or tie me to anywhere that is clearance. How can Customs almost about 4 or 5 or 7 department of Customs release a cargo and another set of Customs will stay on the road lay siege and arrest that cargo again to another post without processing again. All over again Who does that? Where is such an applicable? Are we talking about modernization of Customs? That’s not modernization of Customs
That’s an archaic approach of Customs nobody does that again all over the world. The world has moved beyond that I was privileged to serve as a president Non-state actor In ECOWAS and in relating with most of my counterparts in other parts of the world I realize that Nigeria is still far behind. The world has gone beyond where we are thinking of things are done seamlessly because people know the value of time and for you to even cut-corner There is no room for it because their Customs did not even create room for it, no body that can cut-corner. In Nigeria Customs have created the room for them to cut -corner that’s why they cut corner, it is difficult for anybody if the Customs system is working fine, it will be difficult for anybody to cut-corner, you can’t but because Customs needs you to come around and talk, that’s why they always create that lacuna for you to come back to them and talk. But if we want to do the job accordingly, we must approach best practices globally because the world is moving and if we don’t move with the world, the world will move without us and that’s where we are now.
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