Handling Companies Explain Position on Demurrage Payment

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Chinedu Eze

Recently, the Association of Nigerian Licensed Customs Agents (ANLCA), Murtala Muhammed Airport (MMIA), Lagos Chapter protested against the request by aviation cargo handling companies’ insistence on the payment of demurrage for delays in clearance of goods imported during the Coronavirus lockdown.

The Customs agents insisted they would not honour the mandatory payment of demurrage on cargoes imposed by managements of the Nigerian Aviation Handling Company (NAHCO) Plc and the Skyway Aviation Handling Company (SAHCO) Plc during the lockdown.

They described the insistence of the two handling companies to collect demurrage as a violation of the federal government’s directives on the lockdown of Lagos, Ogun and Abuja during the period.

The Association, in a press statement signed by its Secretary, Mr. Emmanuel Njoku, explained that when its members returned to work on May 4, 2020, following the lift on the lockdown, NAHCO and SAHCO managements insisted that the agents must pay demurrage for shipments affected by the lockdown.

He defended the agents’ position by saying that its members at the seaport did not pay for 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.

But the handling companies said that they are not the right bodies the clearing agents should protest against because they abide by their obligations to the Federal Airports Authority (FAAN) that manages the airports.

NAHCO in a statement signed by its Head of Corporate Communication, Samuel Akinrinmade said the company and other ground handling companies have had to provide critical handling services in support the management of and fight against COVID 19 at extra costs and in the challenging circumstances in the last six weeks of lockdown and closure of airports and airspace (except for approved essential and emergency flights).

The company noted that in addition, warehousing services especially ensuring shipments in the custody of the ground handling companies were kept safe, and in good condition at a huge cost during the period.

“Cargo agents are asking for 100 per cent waiver on storage, their demand is based on the premise that an agency of government, Nigerian Ports Authority (NPA) is taking on the financial burden of the 100 per cent waiver at the seaports and issuing credit notes to Port Terminal Operators.

“This is not the case in aviation, as ground handling companies have not been informed by Nigerian Civil Aviation Authority (NCAA) or Federal Airports Authority (FAAN) that government is giving any financial exchange for storage waiver in the aviation sector. We have shared this fact with the cargo agents and asked them to direct their protest appropriately.

“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,” the company said.

NAHCO expressed appreciation to the efforts of the Minister of Aviation, NCAA and FAAN, even as the aviation industry continues to face the effects of COVID 19, noting, “We are challenged and meeting our obligations to staff and paying all that is due to FAAN, charges such as five per cent of our revenue as concession fee, rent and service recovery charge etc. Going forward is an insurmountable task.”

NAHCO also said, “Ground handling companies are private companies just like the port terminal operators in the seaports, cargo agents many of whom work in 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 desire results of equity in all customs bonded warehouse whether in the seaport or airport.”

Also the Managing Director of SAHCO, Basil Agboarumi, insisted that the ground handlers would not give waivers to the customs agents, saying unlike the maritime sector where the Nigeria Ports Authority (NPA) absorbed some waivers by giving credit notes to terminal operators, the reverse was the case in aviation industry where either the Federal Airports Authority of Nigeria (FAAN) or the Nigerian Civil Aviation Authority (NCAA) refused to do the same for ground handlers.