Shipping Agents Seek Reforms in Abandoned Cargo Auction System

The Association of Shipping Lines Agents of Nigeria says a clearer legal framework and transparent auction system for abandoned cargo can boost revenue, reduce disputes, and restore confidence in the port operations.

The association’s chairman, Boma Alabi (SAN), said in an interview with journalists on Sunday in Lagos that formalising the overtime cargo framework under the Nigeria Customs Service Act (NCSA) 2023 would strengthen legal certainty, protect government revenue, and boost institutional credibility.

She noted that the absence of formally issued regulations under the act created uncertainty and exposed stakeholders, including the service, to potential disputes and litigation.

The chairman said the disposal of condemned cargo should be conducted through transparent, competitive, and auditable mechanisms to ensure fairness and value for money.

She also urged the service to review revenue-sharing and cost-recovery structures to reflect current economic realities.

According to Ms Alabi, the Nigeria Customs Service Act, 2023, does not expressly define “overtime cargo” nor clearly state the timeline for cargo to be deemed abandoned or subject to disposal.

While acknowledging that the service had issued administrative guidelines and internal procedures under its statutory powers, she said more clarity was required to avoid confusion.

“SAN acknowledges and appreciates the service’s efforts to tackle fraud, eliminate fake and double allocation letters, and introduce a centralised authentication system.

“We also note the objective of promoting transparency and improving coordination between commands and headquarters.

“However, following feedback from our members, we respectfully raise concerns that require clarification and structured resolution,” she said.

Ms Alabi said members were worried about the issuance of “Direct Auction Allocation” letters to private firms and individuals.

She said allocations were reportedly made at fixed values per consignment, ranging from N1 million to N2 million, without open or competitive bidding.

“This practice appears inconsistent with the principle that open competitive bidding should be the primary method for disposing of public property, especially where cargo has been condemned and vested in government authority,” she said.

According to her, non-competitive allocations raise concerns about transparency, value realisation, protection of government revenue and equal access.

She said SAN was seeking clarification on the legal basis and safeguards guiding such direct allocations.

Ms Alabi added that members had observed that allocations appeared, in several cases, to favour the same group of importers.

She warned that this could create systemic risks and incentives for cargo to be deliberately allowed to lapse into overtime status and later reacquired at lower values.

Ms Alabi said such a framework could encourage the reduction or evasion of full customs duties, avoidance of terminal handling and shipping agency charges, and possible revenue losses to the federal government.

She further noted the continued application of percentage caps, between 25 per cent and 50 per cent, on terminal and agency charge recovery.

Given the prolonged storage, handling, repositioning, examination, and operational disruptions linked to overtime cargo, she said the current cost-recovery model appeared economically unsustainable and disconnected from actual commercial costs.

While reiterating the association’s support for efforts to prevent fraud and misuse, she stressed that processes affecting proprietary rights must maintain transparency and verifiability.

(NAN)