Rising foreign grip on freight forwarding raises security concerns

Former Acting National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto, has said that the increasing dominance of foreign players in the freight forwarding business is swelling the unemployment crisis, encouraging capital flight and posing serious national security risks.

He, therefore, called on the National Assembly to urgently initiate legislation that would reserve critical aspects of Nigeria’s freight forwarding and customs brokerage business for indigenous operators.

Farinto made the call while presenting a position paper during a House of Representatives Breakfast Session organised recently to harvest practical policy recommendations aimed at advancing the nation’s economic development through legislative reforms.

Addressing lawmakers and other stakeholders, the maritime industry expert argued that Nigeria’s logistics industry has gradually slipped into the hands of foreign interests, leaving indigenous freight forwarders increasingly marginalized, particularly in the handling of project cargoes and customs brokerage services.

According to him, the development calls for urgent legislative intervention similar to the Nigerian Oil and Gas Industry Content Development Act to ensure that critical components of the logistics value chain are reserved for Nigerians.

Farinto explained that logistics comprises several interconnected sectors, including transportation planning, cargo booking, documentation, customs clearance, warehousing, cargo handling and customs brokerage. However, he stressed that customs brokerage and freight forwarding should be protected because of their strategic importance to the nation’s economy and security.

He urged lawmakers to either enact a new law specifically on indigenous freight forwarding or expand the country’s local content legislation to accommodate customs brokerage and other sensitive areas of the maritime logistics industry. According to him, such legislation would stimulate local participation, create jobs and ensure that wealth generated within the sector remains in the Nigerian economy.

“If freight forwarding is left in the hands of indigenous Nigerians, it will create employment opportunities and ensure that revenues generated from the business are retained within the country rather than being repatriated abroad,” he said.

Farinto lamented that foreign firms now dominate the lucrative project cargo segment of the industry, alleging that about 90 per cent of project cargoes entering Nigerian ports are handled by expatriate companies. He noted that indigenous freight forwarders, who previously played significant roles in handling specialised cargoes, have steadily been edged out by multinational logistics companies.

“I cannot remember the last time an indigenous freight forwarder handled a major project cargo in Nigeria. Today, almost everything is controlled by foreign companies,” he said.

He further expressed concern that international shipping companies have expanded beyond their traditional role of transporting cargoes into freight forwarding and customs brokerage, thereby competing directly with Nigerian practitioners. Citing Mediterranean Shipping Company (MSC) as an example, Farinto said shipping lines are increasingly offering end-to-end logistics services that have significantly reduced business opportunities available to indigenous freight forwarders.

The former ANLCA leader warned that beyond its economic consequences, the increasing foreign participation in customs brokerage raises national security concerns because operators in that segment have unrestricted access to sensitive cargo information and import documentation.

According to him, Nigeria cannot afford to leave strategic logistics activities in the hands of foreign interests at a time when the country is battling insecurity, arms smuggling and transnational crimes.

He recalled instances where prohibited items, including arms and explosives, were intercepted at the nation’s ports, arguing that greater indigenous participation would strengthen accountability within the system.

Farinto said customs brokerage should be regarded as a strategic national service because practitioners have access to cargo manifests, shipping documents and sensitive information relating to imports into the country.

He also identified the growing adoption of door-to-door logistics services by foreign companies as another major factor undermining indigenous freight forwarders.

According to him, the arrangement enables foreign firms to originate shipments overseas and deliver them directly to customers in Nigeria without involving local freight forwarders, effectively transferring business opportunities that ordinarily belong to Nigerians.

“The concept of door-to-door logistics has inadvertently taken away the rights of Nigerian freight forwarders because foreign companies now control the movement of cargo from origin to final destination,” he stated.

Farinto dismissed suggestions that Nigerian operators lack the technical competence to manage sophisticated logistics operations, insisting that the country has developed sufficient human capacity over the years.

He blamed weak policy implementation rather than lack of expertise for the continued dominance of foreign operators, pointing to the Cabotage Act as an example of legislation whose objectives have been undermined by indiscriminate waivers granted to foreign companies.

“There is no capacity problem in Nigeria. If countries like Ghana and Benin Republic can successfully empower indigenous operators, there is no reason Nigeria cannot achieve the same thing,” he argued.