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By Steve Agbota
[email protected] 08033302331
Shippers, clearing agents and shipping companies have remained locked in a long-running dispute over container deposit refunds, a problem that has become a recurring sore point in Nigeria’s maritime industry. Clearing agents, who act as intermediaries in processing containers on behalf of consignees, have repeatedly complained at industry forums about persistent delays and outright non-refunds by shipping lines. They argue that the practice ties down capital, raises transaction costs and undermines trust within the port system. Container deposit refunds are payments returned to importers once empty containers are brought back to the port in good condition and within an agreed timeframe. The deposit serves as a safeguard against container loss, damage or abuse nationwide operations.
Some of the clearing agents who spoke to Daily Sun on the matter alleged that the shipping companies collect container deposits from them on behalf of the importers, but fail to refund the deposit paid, even after the container has been returned to the shipping lines.
The clearing agents accused the shipping lines of playing politics with the refund after they paid them to clear their consignees’ goods and return the empty containers to the port.
However, Daily Sun learnt that shipping companies collect deposits ranging from N200,000 to N400,000 on 20-foot containers and 40-foot containers, respectively. In most cases, the money is higher based on the charges by different shipping lines.
As a result of a series of complaints from the stakeholders over the refusal of the shipping companies to pay back the importers/clearing agents, the Nigerian Shippers’ Council (NSC) previously set June 2021 as the deadline to stop payment of container deposits by shippers to shipping companies. This was following the assurances by the National Insurance Commission (NAICOM) to partner with the Council to abolish the container deposits.
The Council assured the shippers and the clearing agents that it will engage underwriters to handle the issue of container deposit refund, which will bring an end to the shipping companies’ collection.
After setting the deadline in 2021, shippers have accused the shipping companies of not stopping the collection of the funds and allegedly holding on to the monies that ought to have been refunded.
Under the current Executive Secretary of the Council, Barr Pius Ukeyima Akutah, the same assurance was given to solve the issue of container deposit refunds.
The Council said that there was an initiative through an insurance company to underwrite the refund of container deposits. The idea is for consignees to pay a small service charge instead of the typical deposit, ensuring containers are returned to shipping companies within a specific timeframe.
Up till date, the implementation is yet to take off as shipping companies are still collecting the money due to poor design at the initial stage, according to the clearing agents.
Speaking with Daily Sun, the Chief Executive Officer of Wealthy Honey Investment Nigeria Limited, Dr Farinto Kayode Collins, said that the Nigerian Shippers Council is sabotaging Nigerian shippers.
“I remember 2-3 years ago, I was one of those who suggested insurance on container deposits because Nigerian shipping agents are actually banking, or do I say depositing with Nigerian importers’ money, even when you have returned the empty containers. They will not pay you the money on time. They will trade with your money for another 90 days minimum.
“In view of that, we now suggested there must be another way out, and the way out that we reached then was that let us to give out insurance. If there’s an insurance underwriter, the insurance will be responsible for the risk involved, and it was discussed then; it needs implementation.
“I am surprised that this president’s management team of the Nigerian Shippers Council is dilly-dallying on it. Why would they not dilly-dally even when they are approved for a storage increase without the consent of the shippers or the stakeholders? So, they are actually sabotaging Nigerian shippers.
According to him, perhaps because they are not the ones paying this money, and they don’t feel Nigerian importers are feeling, which is very unfortunate, saying that this thing is long overdue.
“I don’t know why implementation was stopped. So, it is deliberate, and somebody somewhere is either making money from it or deliberately delaying it to their own personal engagements. That’s what I can tell you,” he explained.
However, he said it is true that agents pay the shipping lines on behalf of their clients (importers) because 70% of cargo cleared in the port is on a contract basis.
“Contract means that you give me the bill of lading with the discussed price. You tell me just to deliver my container. You are not interested in whatever happens. So, it’s a contract basis. In most cases, we are the ones who pay for this container deposit. Now, for you to return this money, you will not return it. Before that, when you want to collect that money, you will not remember that there was an existing importer who is the owner of the consignee.
“But you collect the money for the agent. But when it comes to returning the money, you will now insist that you want to pay the importer just because you know that some importers may be gullible. They will not want to pay the importer,” he said.
He said in Nigeria, it’s very unfortunate that there are no trade laws that guide a third-party arrangement, saying that because there are no trade laws, they’re capitalising on that to extort Nigerian freight forwarders.
He said most times, Nigerian freight forwarders will not be able to collect that money because they will insist go and bringing a letter of authority from the importer.
“And on occasion, the importer that you have delivered his consignment to, who has gone back to the US, believing that you have delivered, so he doesn’t have any business with you. You will now have to wait for another one year. That’s when he’ll come back for you to be able to say, okay, I have a deposit that I have not claimed with a so-so shipping company. So, that is, and it’s very, very unfortunate,” he added.
The MD/CEO of Mikky Excellency Nigeria Limited, Alhaji Abdulazeez Babatunde Mukaila, said the issue is a Nigerian thing, putting the cart before the horse. Definitely, in the design stage, the Shippers’ Council did not take along the critical stakeholder, that is, the shippers, and their appointed clearing agents.
“And their appointed clearing agents, I mean, their appointed Customs broker to operate all that, as the case might be. So, I want to believe they have a poor design, and that is why there is no take-off for the underwriter up to now. How do you ensure container deposits without understanding the basic technicalities involved? Shippers are being extorted because the shipping company will bring the container at their own time to the terminal, and by the time you are ready, the container deposit is even gone,” he said.
He added that it is still very difficult for anybody to return an empty container as the problem persists, saying that, in a nutshell, he believes the design stage is what catches up with the project.
He advised that they still need to go back to the drawing board and engage relevant stakeholders, adding that the people who have a stake in the container deposit itself, and in a very local parlance, the clearing agents, need to understand how this thing can work.
On why shipping companies refused to pay back when the clearing agents pay for the container deposit on behalf of importers, he said: “You see, everything is about the design stage, and the global best practice. In America, for example, the profession of Customs brokers is not for the daily liver. It is the duty of the customs brokers to pick up all the bills. The insurance being proposed by the Shippers Council ought to have covered the clearing agent. The underwriter should be the clearing agent, not an insurance company.
“And that is how it is being practised every other place globally. The person to have the most important stake actually is the consignee of the goods. But once you have given a mandate to your clearing agent, then it has taken your position.
So, the clearing agent ought to be the underwriter, or whatever the Shippers Council is planning ought to be on the account of the clearing agent. Just as you have rightly placed it, agents most times pay all the third-party bills of their claims for their clients to repay later. So, when you take money from Mickey Excellency, Nigeria Limited, as a shipping line, and then I ask you for a refund, and you say no.
“Abinitio, you took money from my account. You did not say that I’m not the importer. You accept me as the agent. I paid through my cheque, and you collected it. And I ask for a refund, and you say no. You want to pay the importer’s account.
The importer who has not paid you the money did not emanate from his account; you now want us to provide the cheque of an importer who is not a party to the monetary transaction that the agent paid to you. So, we all need to come back to the table and understand who to underwrite or who the underwriter should cover. So, that’s the issue.”
He said the shipping lines are just playing politics by saying some agents are the problem, saying that when the agents pay those charges, they are not the problem, and the shipping lines gladly take money from them.
He said they keep accepting money from the agents’ cheque, but when it is time to refund them, they will say the agents are no longer importers, it’s just politics.
Also speaking, the Managing Director of Sula Marine Global Limited, Sulaiman Ayokunle, said no further development apart from what the stakeholders heard from the Shippers’ Council then.
“Even before the Shippers’ Council, we have been pushing to make sure that our members don’t pay container deposits while using insurance companies as an underwriter. But remember, that even with all the hullabaloo about the Shippers’ Council, as the economic port regulator, some of these shipping companies look at themselves as if they are bigger than even the regulators.
“If not, how can we reconcile the fact that even if you drop a deposit for a container, the deposit refund shouldn’t be more than 24 to 72 hours after you return the empty container? Some of them will even keep your deposit for a month. Even for two months. Except people like Grimaldi, who will return your deposit maybe in a week or two. All things being equal, so we’ve not heard anything other than what we’ve had since 2023,” he lamented.
He said even an update from the Shippers’ Council about the stage they have gotten to, up till now, people don’t know because nobody is talking, saying that the container deposit payment continues.
Speaking on the allegations that clearing agents are part of the problems by using their money to pay for the container deposit, he said: “You see, this thing is of two different ways. At the beginning of every job, an agreement will be reached between the agents and the importers. If the agreement is like door-to-door, every payment in the line of that operation will be made by the agents. And one that is done, including container deposit.
“If the agreement is that, okay, the agent is paying the container deposit that he is paying on his behalf, on his own company’s behalf, not on behalf of the consignee, to refund the money back to the consignee. Because for every bill of lading, there is an agreement. And the agreement is binding between the shipping company and the consignee, which is the importer.”
He explained that if there is going to be any payment, the agent is going to be the one to foot the bill, including the container deposit, which is usually in the agreement.
“Okay, as you are paying, you are paying the container deposit, and you collect your container deposit back by yourself. The shipping company sometimes will tell the agencies no. Those whom they know, as it is agreed on the bill of lading, are the importer, and the money will be refunded to the importer. That has been creating a lot of problems.
“But it is very common among one-time pay-as-you-go importers. If you must have solid contractual agreements with them, then it will be easier to do so by sorting it out without too many problems. Because, of course, you are not a one-time agent to them.
“Consistency will bring agreement, and agreement will follow strictly. Some shipping companies don’t care. They refund the money to the importer. But once the importer acts with integrity, the ideal thing is for the importer to refund the money to the agency. It does happen. What is the best way to do is to know your customer very well and go into agreement even before starting the clearing process,” he said.
