THE Nigeria Shippers Council, NSC, and the National Insurance Commission, NAICOM, are working on a framework to reduce the cost of doing business with the introduction of insurance cover to mitigate risks in ports’ operations across the country.
This was disclosed by Bar. Hassan Bello, Executive Secretary/ CEO of the NSC while receiving a delegation of NAICOM management which paid him a courtesy visit in Abuja last week. The NSC boss, while addressing newsmen, said insurance cover in ports operations has become necessary given the losses and damages that often accompany goods on transit.
According to him, cost of container deposit at the ports ranges between N150, 000 to N200, 000 stressing that billions of naira are lost due to the difficulty of transporting these containers across the country because of bad roads.
He said: “As ports economy regulator, we have our eyes on the cost of doing business in Nigeria. So, in the ease of doing business and the cost of doing business, we want to make our ports competitive and we have to moderate the cost. One of the costs is container deposits that shippers pay for taking the containers out of port.
“The containers are the assets of the shipping companies. They must be returned in perfect condition and so they don’t get that because as at the time the containers are not returned, the deposit is not refunded. When you return the containers in good time, you collect your deposit.”
He, however, said that ports business is as not as easy as people think, adding, “it is not as simple as that. Access to port maybe difficult and if a container is not returned within a certain time limit, there could be a problem. One would lose his deposit or part of the deposit and so the shipper has to forgo the deposit. Sometimes the shipping company, even when the containers are returned, don’t return the deposit in good time and that is money lost. So, what we are saying is that there are a lot of issues like that, which we could have the insurance companies come to take care of,” he explained.
To this extent, the NSC boss maintained that insurance companies would, by the collaboration, come in and mitigate the risks, thereby enhancing the ease of doing business. He stated further: “We want a policy on the participation of insurance companies in container regime. There is policy on goods-in-transit of course but we want the policies to cover most of the risk that shippers and freight forwarders incur including demurrage, rent, among others.”
Responding, Olorundare Thomas, Commissioner for Insurance and Chief Executive Officer of NAICOM, expressed joy at the collaboration, noting that it would impact positively on the maritime sector. He said: “As far as I can remember, this will mark one of the few times that any of our stakeholders will come with developmental ideas that will enhance the thought of the Commission on how to deepen the market and how to make insurance relevant to our daily living.
“When it comes to trading, marine is in the frontline and insurance itself move with trading. Insurance started with marine insurance before fire, but marine is quite critical in the history of insurance development. With what we have gone through in the country and globally, we need to take insurance more seriously than what we have done in the past. It is important for us to remember that what we are getting today as marine sector is not consistent with business transaction in the marine sector.”
Thomas pledged the readiness of the Commission to do whatever is necessary to give the maritime sector the needed push to make it contribute its share of the nation’s Gross Domestic Product, GDP.
Source: Vanguard Newspaper, July 29, 2020.