The Minister of Transportation, Rotimi Amaechi, has challenged the Union of African Shippers Council (UASC) to indicate the anti-competitive behaviors of multinational shipping lines operating in the region, which he said is directly linked to the high cost of transport in West and Central Africa.
The minister gave the charge at the meeting and sensitization workshop on the African Continental Free Trade Agreement (AfCTA) hosted by UASC on Tuesday in Abuja, where he asked the group to ensure that all elements of cost relating to delays, corrupt practices are eliminated from the transport and logistics chain.
Amaechi, who was represented by the Director Maritime Service in the Ministry, Auwal Suleiman, said, ”I wish to draw the attention of the UASC to the inter-relationship between the cost of transport and trade.
”Transport provides mobility that ensures movement of goods from production centers to areas where they are most needed. High transport cost translates to high landing cost for goods.
”In sub-Saharan Africa, the proportion of transport cost in the overall cost of goods is between 35-40 percent, while in developed economies of Europe, Asia and America it is less than 10 percent.
”It is, therefore, the duty of your committee to analyze the cost component of the maritime transport cost in the region and ensure that all elements of cost relating to delays, corrupt practices are eliminated from the system.
”We must identify the anti-competitive behaviors of multinational shipping operators in the region which is directly linked to the high cost of transport in West and Central Africa.”
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The Minister noted that the Federal Government is aware of the unreasonably high cost of transportation of goods to and from the sub-regional ports.
He identified high freight rates, poor infrastructure, and arbitrary surcharges such as war risk surcharges, port recovery, port congestion, peak season surcharges, bunker adjustment, and currency adjustment factor among others as being responsible for the high cost.
He said, ”I am equally aware that the member councils of the union are concerned about the lack of consultation, timing and cost structure of these surcharges.
“These surcharges are mostly unilateral and at times new nomenclature introduced by the multinational shipping companies/lines without consultation with the sub-regional authorities or the shippers.
”The process of the introduction of these surcharges lacks transparency and may not be based on verifiable and available statistics.
”These surcharges amount to huge sums of capital flight from the sub-regional economies and thereby depleting the limited foreign reserve.”
Amaechi expressed optimism that the committee would critically analyse the cost structures and units of the various charges and surcharges, establish the parameters shipping lines used in determining their charges and surcharges.
According to him, the UASC committee of experts is expected to recommend measures to guard against future imposition of arbitrary surcharges and unilateral introduction of new nomenclature by the multi-national shipping lines.
The two-day meeting was attended by delegates from the 19 member states of the UASC.
