A huge industry has been built around freight forwarding with unlicensed agents and other unscrupulous elements not just gaining the upper hand over genuine operators but fleecing unsuspecting members of the public of cash and valuables running into hundreds of billions as well as creating serious credibility crisis in the import sub-sector, reports Ibrahim Apekhade Yusuf
That Nigeria is an import-dependent country is not in doubt. With a huge population size and a lax policy on importation, Nigeria remains a major attraction as an emerging market for virtually anything from consumables, electronics, automobiles, among other merchandise.
But it is rather disheartening to note that the nation’s huge economic potentials within the West African sub-region as well as sub-Saharan Africa and across the globe is being greatly undermined by the nefarious activities of unscrupulous elements masquerading as freight forwarders.
Who is a freight forwarder?
Wikipedia defines a freight forwarder, forwarder, or forwarding agent, as a person or company that organises shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. Forwarders contract with a carrier to move the goods.
It further states that freight can be booked on a variety of shipping providers, including ships, airplanes, trucks, and railroads. It is not unusual for a single shipment to move on multiple carrier types. ‘International freight forwarders” typically handle international shipments. International freight forwarders have additional expertise in preparing and processing customs and other documentation and performing activities pertaining to international shipments.
Menace of fake freight forwarders
The activities of touts, fake and unregistered freight forwarders at the sea ports, land border stations, cargo airports to mention just a few, have reached an alarming proportion such that current cost analysis of the extent of losses shows that the nation loses a huge amount of money running into billions of Naira per annum, through unearned revenue that would have been accrued to the Federal Government and other stakeholders, no thanks to the activities of these economic saboteurs.
One man who should know better is the Registrar/Chief Executive Officer of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), Sir Mike Jukwe.
Jukwe, whose organisation is saddled with the responsibility of regulating the activities of freight forwarders operating in the country, literally blew the whistle on those he described as bad eggs giving the industry a bad name.
He said that much during an interview recently. According to him, “In monetary terms, the amount of money the nation loses as a result of the dubious activities of touts and fake freight forwarders at the airports, seaports and land border stations runs into hundreds of billions of Naira per annum, through unearned revenue that would have been accrued to the Federal Government and other stakeholders.”
Modus operandi of fake freight forwarders
Giving fresh insight on the activities of fake freight forwarders, Chief Cyprian Arinze, Managing Director/Chief Executive, Eagle Haulage Nigeria Limited, said the activities of these so-called freight forwarders has had a telling effect on the sector.
According to him, the industry is saturated with fraudsters who are literally taking the shine off real operators in the sector.
“Over 75 per cent freight forwarders operating in the country are fake. Most of these dubious characters don’t have any known offices. What they have are merely portfolio companies, as such, they can do anything and vanish into thin air once they make their kill,” he said.
Expatiating, the Eagle Haulage boss, whose company is also a registered clearing agent said: “These fake agents have a very systematic way they operate. Most times they hoodwink even registered agents by obtaining stamps and other documentation in order to give a semblance of authenticity to their work. But then, it is a gimmick to trick and swindle unsuspecting members of the public.
“What they do most times is to under-price jobs knowing full well they cannot deliver on the job, just to be able to attract a huge clientele but then they are usually not able to follow through with the process and the result is that they cost the victims more pains than gains. They flout the rules of engagement and pay scant regard to due process. At the end, the client’s consignment would attract huge demurrage,” he stated.
On the way forward, Chief Arinze said: “Before you engage any freight forwarder, you must demand for a known address and office location where you can easily trace such a person should anything go wrong,” adding, “You must know the pedigree of the person you are engaging in the first place.”
One way to also rein in the activities of these dubious characters, he stressed, “ Is to agree payment on delivery. Obviously, it is only those licensed ones who know they have something at stake that will be able to fulfil such condition. Most times they can’t even clear cheques but ask you for cash. When you come across somebody pressurising you to give cash in place of cheques this is a danger sign.”
Laxity of law enforcement agents
At the centre of the credibility crisis affecting the industry is the issue of complicity of the law enforcement agents.
In the view of analysts, the law enforcement agents are responsible in part for the wave of crime being experienced in the import-export sub-sector.
This is the view of Dr. John Isemede, Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).
Isemede, who was unsparing of his criticism of the law enforcement agents, lamented that they are guilty as charged.
As far as he is concerned, the law enforcement agents should take the blame for the preponderance of crime in the freight forward and allied sector.
Raising some posers, he queried: “What is the role of the government agents and others? Have you travelled by road to Seme do you see the uniformed men there? How many touts do you see on the road? Is it the job of the private sector to ensure sanity at the seaports, airports, and land borders? Can NACCIMA arrest any erring member of the public? The answer is an emphatic no!”
On what his association is doing to stem the tide of fraudsters in the sector, the NACCIMA boss said: “Just last week, we began compiling the list of importers and exporters because in a society where things are not put in the right perspective, things are bound to go wrong. In the sense that you talk of faking, you talk of sub-standard products, do you know them/ are they members of the private sector? Can you just open a store today and start to administer treatment as a medical doctor? You won’t dare because NMAS will first of all descend on you.”
Notwithstanding the efforts at mitigating the incidence of fraud in the system, Isemede argued matter-of-factly that: “Faking and others will continue if things are not put in the right perspective. It is not the duty of NACCIMA or any other. What is the job of the police, customs, immigration, NPA, and other law enforcement agents at the seaports, land borders and airports?”
Regulatory framework
While giving insight on the oversight functions of his agency over the last 12 months, the CRFFN boss said: “First, we had to produce the relevant Regulations made pursuant to the Act to guide us in our regulatory function in 2010. We started the process of registration and accreditation respectively and by 2012 we produced the maiden Register of freight forwarders, accredited associations of freight forwarders, accredited training programmes and training institutions. The Register is reviewed monthly and published twice a year, as of 31st December and 31st June respectively. The next step is to enforce the relevant provisions of the Act and Regulations made pursuant thereto, which allows only registered forwarders to operate in the freight forwarding industry. To enforce, we had to recruit the enforcement team and train them, sensitise all stakeholders and partner with the law enforcement agencies, particularly the Nigeria Police to help us in the enforcement exercise. Why now? It is because we have done the needful and got to the stage of enforcement. The process is step by step, taken one after another. The stage of enforcement is now, it is set.
“Our areas of coverage or operation, being the seaports, cargo airports and land border stations in the country have been zoned. Eastern Zone has a Zonal office in Port Harcourt, Northern Zone has a Zonal office in Kano and Western Zone has a Zonal office in Lagos. We also have a Liaison Office in the Federal Capital Territory, Abuja. We have been to all those areas in addition to Seme Land border station, Calabar, Warri and Kaduna. We will soon go to some land border stations too. We were welcomed and encouraged to carry on with the enforcement, the response was the same everywhere we went. We are encouraged particularly by the Nigeria Police who are ready and willing to partner with us.”
Register of certified freight forwarders
A cursory view of the Register of Freight Forwarders as at 31st June, 2013, shows that there are over 1, 976 registered individuals, 567 corporate practitioners and five Associations of Freight Forwarders (ANLCA, NAGAFF, Nigerian Association of Air Freight Forwarders and Consolidators ((NAFFAC), National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) and Association of Registered Freight Forwarders, Nigeria (AREFFN) who are qualified and allowed to practice freight forwarding in Nigeria.
The Nation learnt that over 5,000 applications were received but only those who went through physical verification and met the set criteria were registered. The inducted freight forwarders took the oath of allegiance and the code of professional conduct and ethics, and they were subsequently issued Identity cards with certificates.
Synergy of cooperation
The Nigerian Institute of Freight Forwarders has thrown it full weight behind the Council for the Regulation of Freight Forwarding in Nigeria CRFFN over its proposed clampdown on quack freight forwarders as part of the commencement of enforcement of the provisions of the enabling Act.
The council had last week hinted that it is concluding plans to clamp down on illegal and unregistered freight forwarders practicing in Nigeria’s sea, airports and border stations. This is sequel to the recruitment and inauguration of enforcement officers, which also marked a flag-off of its enforcement activities in line with the council’s statutory powers under the CRFFN Act, 2007, designed to rid the nation’s maritime industry of quack and unregistered freight forwarders.
Acting Executive Secretary of the institute, Valentino Buoro, who spoke in Lagos, described the move as the dawn of a new era in Nigeria’s international trade transactions. According to him, this milestone will also mark the end of the road for fake forwarders who have in the past tarnished the image of this globally recognised profession.
“For far too long a time, honest and hardworking freight forwarders have suffered humiliation and bad publicity as a result of the activities of fraudsters who masquerade as clearing and forwarding agents to dupe innocent importers,” he noted.
Buoro, who is also a maritime lawyer, noted that the institute congratulates the management of the CRFFN for a good take off in this respect, and also urged all registered freight forwarders to seize this opportunity to sign up for the 2013 Mandatory Continuing Professional Development Programme of the Nigerian Institute of Freight Forwarders which kicks off this month.
The institute therefore appealed to registered freight forwarders who have not regularised their membership of the institute to do so by picking up their membership registration forms and taking advantage of its Members Support Desk which will assist them in finding solutions to a wide range of business challenges.
Echoing similar sentiments, Sir Jukwe, confirmed the proposed clampdown, which he also said would commence in Lagos, Port Harcourt and Kano and later extend to other seaport, airports and land borders.
According to him, the inauguration of the enforcement officers, which also flagged off the enforcement of the relevant aspects of the enabling Act is aimed at flushing out quacks and unregistered freight forwarding practitioners from the system in line with the letters and intentions of the CRFFN Act.
He disclosed that affected freight forwarders have been given between two –three weeks to regularise their registration with the council or face the full wrath of the law.
“What this implies in practical terms is that at the expiration of this notice in the next two or three weeks, all unregistered freight forwarding practitioners will not be allowed to operate at any sea, airports and land borders in Nigeria,” Jukwe insisted.
“The recruitment of these enforcement officers, about 30 of them is to enforce provisions of relevant sections of the CRFFN Act, 2007, especially the areas that concern complying with the standard regulations of practice,”he said further.
The clampdown is in line with section 30 of the CRFFN Act 16 of 2007, which defines a freight forwarder as any person or company who arranges the carriage or movement of goods and associated formalities on behalf of an importer or exporter along the international boundaries of sea ports, cargo airports or land border stations and also empowers the council to enforce compliance.
