Importers, firms count loses, as cargo handlers’ strike worsens operations

By AYOOLA OLAOLUWA

The industrial action embarked upon by cargo workers operating at the Murtala Muhammed International Airport (MMIA), Lagos, has exacerbated the supply chain pressures being experienced by local importers, especially manufacturers and logistics companies, which had their goods trapped at the airport for several weeks, Business Hallmark can report.

Many firms, which had shipped raw materials and replacement parts for their machineries, as well as logistics firms in the cargo haulage business, which had their goods trapped at the airport, it was learnt, lost several billions of naira while the strike lasted.

Sources in the sector informed BH that while local manufacturers and producers of goods were not able to fulfill orders already made by buyers due to the non-delivery of shipped goods needed for production, logistics firms, which had shipped goods on behalf of importers, were not able to meet delivery schedules, in the process risking law suits from affected customers seeking damages.

It would be recalled that the two handling firms with the franchise to handle cargoes at the MMIA, Lagos, the Nigerian Aviation Handling Company Plc (NAHCO) and Skyway Aviation Handling Company Plc (SAHCOL), had on April 24, 2023, commenced a new cargo handling tariff regime in spite of stiff resistance from freight associations.

A copy of the memo announcing the new rate seen by BH showed that general cargo/bank consignment charges per kilogram rose from N63. 30 to N130.6; demurrage charge per kilogram rose from N13 to N26, while re-registration was increased by over 300 percent to N15,000 from the old rate of N4, 420. Other charges were also increased by at least 100 percent.

However, the increment did not go down well with the umbrella body of cargo workers, Association of Nigerian Licensed Custom Agents (ANLCA), which ordered its members to suspend cargo evacuation in protest against the increment.

Defending the decision of the association to call out its members on strike against the increment in an interview with our correspondent on April 24, the Vice Chairman of ANCLA, MMIA chapter, Comrade Davies Chukwuneye, had explained that the association withdrew their services after the management of NACHO and SAHCOL decided to go on with the increment in handling charges by100 percent after its pleas to reduce the tariff were ignored.

“In the second week of February, the ground handlers sent a circular to the executive of ANLCA, introducing an upward review of between 100 and 300 percent on their handling and other charges.

“The association viewed this as being obnoxious and highly insensitive judging from the fact that the economic situation currently is so harsh to the extent that the Nigerian masses are struggling to survive.

“In view of this, the union excos entered into negotiation with the ground handlers specifically to make them realise that increment at this time is ill timed and that it will definitely have negative effects when it was still less than three years they had the last increment.

“However, the exco’s intervention fell on deaf ears. If we fold our hands and allow this to go on, maybe by the end of this year, another increment will come up. We are calling on the Federal Government to call the ground handlers to order.

“Within these few days, we have lost more than two billion naira. We are not saying there should be no increment, what we are saying is that it should have a human face so that we can remain in business.

“I can tell you authoritatively that most of the hand trucks used in both warehouses are bought by our members, yet we are paying handling charges.

“We had a situation where they went and hired machines and positioned them for us to inspect and few days after we had accepted increment, NAHCO returned them to where they were rented”, the ANLCA boss had lamented.

Meanwhile, despite the fact that the strike action was suspended on Monday, May 8, 2023 after intervention by concerned stakeholders, several cargoes had piled up at the airport while the industrial action lasted, and will take several weeks to clear, according to cargo workers.

Also, the debacle had negatively affected several players in the industry, especially logistics firms, importers and producers.

Investigations revealed that many haulage and logistics firms have not been able to deliver goods shipped on behalf of intended importers as agreed.

To worsen the matter, many of the goods are said to be already rotting away in NAHCO and SAHCOL warehouses owing to poor storage facilities.

“We have suffered huge losses as a result of our cargoes getting stuck and damaged in the dilapidated sheds called warehouses by the two handling companies.

“If you go to NAHCO and SAHCOL warehouses now, you will see that they are seriously leaking. Unfortunately, we are in the raining season and the torrential rains are flooding the places and damaging our goods.

“Some of the damaged goods cleared on Thursday (May 11) were rejected by customers. That means we are the ones that will bear the cost of the damaged goods.

“Thank God that we are an established company that doesn’t cut corners. The shipped goods were fully insured before they were shipped. We would have been in serious trouble by now if we had failed to pay the full premium”, a manager of a haulage and logistics company, who spoke on the condition of anonymity told our correspondent.

Apart from logistics and haulage firms being at the receiving end of the crisis, BH also gathered that several businesses, including manufacturers, producers and industrial printers were affected by the industrial action.

One of the affected players, a pentecostal church running a commercial press in Lagos, had already lost over N50 million in revenue due to the unexpected stocking of replacement parts for its printing press at the Lagos airport.

“We normally do printing jobs for governments (FG, states and LGs), churches, corporate organisations and individuals.

“Unfortunately, some of our machines broke down after we finished printing election materials contracted to us by INEC for the 2023 general elections.

“Normally, we used to bring in needed machines and spare parts through sea as it is much cheaper to do so.

“But since we have several outstanding printing jobs like the printing of examination questions and writing papers for the ongoing West African School Certificate Examinations (WASCE), we have to fast-track the shipping process of the needed machines and spare parts by opting to bring them in through the Lagos airport, which is quite expensive.

“Though the goods timely came in as planned, we were unable to move them out of the airport before cargo workers went on strike.

“Unable to do the job, and WAEC breathing down on us, we have to sub-contract it out at a huge loss to other big printing houses like the Dominion Press owned by the Winners Chapel and other presses in order to avoid been blacklisted by the West African Examinations Council (WAEC)”, a senior official of the church told BH.

Also affected by the crisis is the Nigerian Customs Service (NCS) which reportedly lost over N25 billion in revenues from expected duties on imported cargoes and those that should have left the shores of the country while the strike action lasted, a senior Customs officer confided in our correspondent.

“Thankfully, the strike action is now over and things are expected to normalized in the next one to two weeks”, the official stated.

Meanwhile, NAHCO and SAHCOL have reduced the controversial rates to 75% while negotiations for further cutdown continued.

The cargo handling companies also waived demurrage on cargoes for the two weeks the strike action lasted, after intervention from concerned stakeholders.

According to the Chairman of Association of Nigerian Licensed Customs Agents, Lagos Airport Chapter, Prince Bamgbala Adewusi, the reduction and waiver were secured after the intervention of the Nigerian Customs Service, the Department of State Security (DSS) and the Lagos State Police Command.

While Adewusi maintained that ANLCA members were still not satisfied with the gesture by both NACHO and SAHCOL, he said they were forced to reconsider their action due to the delicate nature of airfreight business, as well as pleas from concerned stakeholders.