Containers Clearing Cost Increases By 67%, Vehicle Parts’ Prices Soar

Container clearing cost has increased by 67 per cent, resulting in increases in the prices of vehicle spare parts.

A freight forwarder in an interview with Punch disclosed that they pay N600, 000 to clear a 40-foot container loaded with used vehicles’ spare parts, but now pay over N1 million for the same consignment.

A member of the National Association of Government Approved Freight Forwarders, Ugochukwu Nnadi, claimed that the Nigeria Customs Service is inflicting untold hardship on Nigerians with the high cost of clearing the consignment, rather than generating revenue for the federal government.

He said, “For example, if you had a 40-foot container loaded with used motor parts before now, the surface duty was N600, 000. Now, they have given it a benchmark of N1m at surface duty level.

“It is about 60 per cent higher than what it used to be on the same goods. This is why engine parts are very expensive. Before now, you could get a used engine for around N30, 000, but you can’t get any engine now, no matter how small it is, for anything less than N100, 000. And they are doing these things thinking they are generating revenue, but they don’t know that they are making the people poorer.”

He further said that any rate paid by importers must be passed on to the consumers.

A member of the Association of Nigerian Licensed Customs Agents, Akintoye Ojo, who also spoke on the development said, “The prices of clearing imported car spare parts have gone up. The commodities in your container and the value are what determine the duty you pay. As a matter of fact, the Customs is increasing their values but they hide under the umbrella of freight charges and also insurance. For old spare parts, you can clear for less than N600, 000 before, but there is no spare parts container you can clear for less than N1.5m.”

Meanwhile, the TinCan Island chapter Chairman of the African Association of Professional Freight Forwarders and Logistics of Nigeria, Geoffrey Nwaosu, explained that importers now loaded vehicles before putting used spare parts just to reduce the cost of clearing their consignments.

“Before now, it is used to be between N600, 000 for surface duty, but it is no longer like that for spare parts. Now, you must pay a surface duty of between N3 million and above for a 40-foot container.

“You can still pay this and still be battling with alerts since it is coming with Pre-Arrival Assessment Report, PAAR. But it is in two ways. You can load a car or two in the same container. They do this to avoid going to access foreign exchange for PAAR. So, they will add one or two vehicles and clear the cars and the spare parts.”

Charles Nwarienne, a clearing agent, said: “You see, before now, it depended on different items. There were ones you would pay a surface duty N600, 000. Later, they adjusted the surface duty to N800, 000. We noticed the increment after the protest. The general cargo has started and it is part of the reason why we protested.”

In his response, the National Public Relations Officer of the NCS, Timi Bomodi, blamed exchange rate costs for the hike.

“How much rent were you paying three years ago? What was the exchange rate officially last year and what is the exchange rate now? So, if somebody used to pay that amount when the exchange rate was lower and now that the exchange rate has gone up, do you think it is reasonable to expect that thing to remain like that?

“Nothing has remained the same; freight charges have gone up, and exchange rates have gone up. Do you expect the duty to remain the same when these things are components of duty? That is how you arrive at duty payable; your freight charge and exchange rate are important factors that you must consider. Yet, somebody expects that the duty must remain the same. It is not possible,” he noted.