Understanding deployment of export Processing Terminals for cargo logistics

The drive by the Federal Government to transit from the oil to the non-oil sector of the economy has increased the focus on the development of the Agro-Sector of the economy both as a way of improving Foreign Exchange inflow into the economy and to ensure food security.

The need to address the unfriendly trade facilitation environment led to concern by the federal government, following which the Presidential Enabling Business Environment Council PEBEC set as part of its agenda the need to streamline port operation to respond to the demands of trade facilitation. The idea of EPTS was not only accepted at the highest level of government but the PEBEC ensured that the relevant government agencies collaborated to birth a new, effective and efficient logistics and documentation procedure for export.

The intention is to bring our export facilitation to acceptable best practices as well as providing regulated environment for quality control, product inspection certification, documentation and appending of requisite customs sealing and other regulatory endorsement for onward departure for shipment. As part of efforts to support Government Agro-Export drive, the Nigerian Ports Authority took steps to improve the logistics surrounding the inflow of export boxes into the Ports including the loading and shipping of such export cargoes. As a first step, the Authority approved part of Lilypond as an Export Terminal.

This in addition to the establishment of Export Processing Terminals across Lagos and Ogun states in collaboration with the Nigerian Export Promotion Council as Technical Partner. The establishment of the Export Processing Terminals became more compelling following the provision of Presidential Executive Order 001 of 2017, which required the Authority to provide dedicated facilities for export cargoes as a measure towards promoting ease of doing business and trade facilitation.

To kick start the process, a joint newspaper advertorial for Expression of Interest for The Certification of Export Processing Terminals to Service Lagos Port Complex and Tin Can Island Port Complex vide Public Notice No. 4152 by the Nigerian Ports Authority and the Nigerian Export Promotion Council was released on Monday 26th April 2021 and closed on Monday 24th May, 2021 (copy of advert attached and marked as Appendix ‘A’)The central focus of management action in this regard was to position the Nigerian Ports Authority as the gateway to the economy to play a pivotal role in ensuring export expansion and development through the seaports.

Additionally, Management interest to increase local capacity and participation in Nigerian export business was central both in consideration and certification of the Export Processing Terminals. The EPTs initiative was also to insulate the export logistics processes from the hinderances to clearance and documentation of cargo for shipment at the main ports as well as to ensure that the degradation of the value of Nigerian Export due to lengthy logistics procedure and waiting time was eliminated. A total of twenty-seven (27) facilities were inspected by the approved Inspection Committee comprising of Nigerian Ports Authority, Nigerian Export Promotion Council (NEPC) and Lagos State Government (LASG, for Lagos State Locations only), following which seventeen (17) were prequalified, out of which only ten (10) companies met the qualification threshold. Of these ten (10), only five (5) are currently ready and operational.

To demonstrate government’s commitment at resolving the issues on the creation of specialized export logistics centers, the Federal government established a dedicated Customs command to coordinate the processing of export cargo at the EPTs from where any cargo cleared for shipment would access the port without interference or hinderance from any government agencies including Customs until the cargo is shipped, except where there is credible intelligence to the contrary.

These EPT facilities are equipped with requisite equipment for weighing, Customs examination, stuffing, storage etc. Due to the space constraints at the main ports which have exceeded their ‘as built capacity’ for cargo handling especially for ports in the Lagos area, the Export Processing Terminals were conceptualized to transfer all handling procedures in the ports to the Export Terminals.

With the provision of Nigeria Customs Export Command and personnel deployed to cover all approved EPTs any export cargo originating from the EPTs is presumed to have concluded all terminal handling formalities and would only be accessing the port for a seamless loading on to the ship. The policy is currently at the experimentation phase, and we have witnessed tremendous success which promises, a very bright future for ease of export cargo logistics processes. Aside from the Customs, the CBN plays a crucial role in export documentation process and there is an ongoing collaboration between the CBN and the Authority for an Electronic Data Interchange for documentation validation to ensure hitch free processing of export logistics. This ensures all export cargoes would have met the CBN NXP requirement for Forex declaration and repatriation back into the economy.

As a new initiative which may experience some challenges, the Authority is in continuous stakeholders’ engagement to allow for familiarization with the policy.

Shipping lines have been mandated to establish an electronic interface with the EPTs, with a view to deploying available spaces and boxes to be picked by the particular voyage. The EPTs are mandated to and have all installed weighbridges in line with the IMO prescription for export cargo to have Verified Gross Mass (VGM) Certificates.

One of the interventions of the Nigerian Ports Authority at resolving the problems of cargo flow in and out of the ports was the introduction of Electronic truck Call up system or Eto that has ensured orderly arrival of trucks into the ports in the Lagos area through batching and sequencing using a time belt for the different categories of trucks ingresing the ports. This has ensured organised control and regulation of traffic in and out of the ports of Lagos, to mitigate the gridlock experienced at the ports which almost paralyzed socio-economic life in the commercial capital. In this connection, all haulage movements in and out of the Ports are connected to a central control server to ensure orderly flow of traffic.

The Authority engaged a tech company for deployment of this solution and licensed private satellite car parks and container holding bays and the export terminals. These facilities are electronically connected to the central server from where traffic is called up to the ports on space availability basis. One of the benefits of this initiative is a drastic drop in the turnaround time of haulage vehicles in the ports of Lagos from an average of 14 days to less than 48hrs.The introduction of EPTs is therefore the Authority’s response to the Presidential Executive Order 001, the complaints of the exporters particularly Agro products exporters of degradation of their products before it gets to the port of destination due to hectic and lengthy logistics stay at the port corridor.

Our desire is to achieve a timely and predictable logistics processes for export as a boost to the economic diversification programme of the Federal Government. The NPA is not unaware of concerns raised lately; while EPTs are expected to charge for services and use of their facilities as venture capitalists, the Authority ensures those charges are not replicated inside the port as the container arrives for shipment.

Indeed an internal review shows that the charges when juxtaposed with the overall experience of exporters before the deployment of the electronic call up system when export boxes are held up along the port corridor in the gridlock for days and weeks, the charges pales into insignificance.

There’s also a concern about the capacity of the number of export terminals approved to commence operations which the Nigerian Ports Authority is constantly monitoring and will increase the number of EPTs to match the growth in number of export boxes should the need arise.

For emphasis, the spatial distribution of approved EPTs ensures wide coverage and encourages intermodal cargo movement both through the waterfront using badges and those who prefer the road corridor thus providing choices for the different categories of exporters.

The reality is however that majority of genuine exporters have expressed a lot of relief with the current policy deployment. Data is also showing gradual increase in numbers which are certain to grow as we find stability.

We are deploying very similar strategy we used in addressing the gridlock along the port corridor for the EPT project and we are confident the end result will benefit genuine Nigerian exporters who were our primary focus when the policy was designed over two years ago.

The fears being expressed are therefore misplaced except that the activities of middle men who have held the Nigerian export community captive over several years is about to be dismantled.

The integration of the Electronic Call Up system (Eto) and the Authority’s insistence that under the EPT regime call up shall be required for export trucks which will ingress the ports ONLY through the EPTs and the visible and successful collaborative efforts between the Authority and Nigerian Customs Service that will ensure enforcement of the directives in addition to the prospects of the integration of the CBN NXP procedures for greater accountability is sending jitters to middle men and those who have hitherto hijacked an important aspect of the export value chain, operating from non verifiable locations & expecting to be allowed to access the ports from those locations and who are not prepared for more visibility and accountability without a fight including blackmail is the reason for overheating the Eco system.

For genuine exporters, while there are temporary teething problems that would soon be overcome, the EPTs represents a major leap and improvement both procedurally and cost wise.

The NPA calls for greater understanding among stakeholders as we push for bringing stability to the logistics surrounding arrival of exports to our ports and shipment of export boxes