Ghana Shippers’ Authority - Providing Shipping Solutions

PORT TRANSIT COST – SOME NATIONAL EFFORTS TO

INFLUENCE THE QUALITY OF PORT SERVICE DELIVERY AND TO REDUCE PORT TRANSIT COSTS

www.shippers.org.ghinfo@shippers.org.gh

Ghana Shippers’ Authority - Providing Shipping Solutions

PRESENTED AT THE 13TH ROUND TABLE CONFERENCE OF MANAGING DIRECTORS OF PMAWCA, 29-30 JUNE 2015, ABIDJAN

BYABRAHAM OCLOO

GHANA SHIPPERS’ AUTHORITY

Ghana Shippers’ Authority - Providing Shipping Solutions

ORDER OF PRESENTATION1. Introduction2. Some National Efforts To Mitigate High Port Transit Costs 3. Challenges to National Efforts4. The Role of Ghana Shippers’ Authority5. Challenges to GSA Initiatives6. Conclusion

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1. INTRODUCTION- High cost of doing business hinders development- High Port transit costs, high cost of doing business- This negatively affects port and

country competitiveness

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- What is Port Transit Cost?+ cost of moving cargo from vessel

through port till warehouse; two aspects+ direct costs– port dues, vessel

handling, stevedoring, terminal charges, etc+ defray cost of facilities and services+ other direct costs include charges of

other service providers & regulatory agencies

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+ indirect costs – time spent in moving cargo through port; more time, high cost

= complicated customs processes, = destination inspection problems, = cargo release delays at shipping lines= ICT problems= shippers lack of funds, = discrepancies in declarations, etc

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2. SOME NATIONAL EFFORTS TO MITIGATE HIGH PORT TRANSIT COSTS

- Ports are sources of revenue- GPHA have sought PPP funding to dredge, expand and acquire equipment for the ports to reduce congestion and cost:+ 24/7; automated identification &

retrieval of boxes; plans to have containers scanned before exiting to off-dock terminals; new gantry cranes;

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- Destination Inspection System- Ghana Customs Management

System and Ghana Community Network or GCNet, an EDI system

- Risk Management and Scanners – to reduce physical examination of boxes

- stakeholders meet to discuss issues of concern and find mutual ways of solving problems

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3. SOME CHALLENGES TO THE NATIONAL EFFORTS

- 85% of importers pay demurrage and rent

- 7 day demurrage-free period not enough

- ports needs to be free of congestion- meanwhile cargo throughput is

increasing 2000 – 2013 ; over 8.3m tons –

17.7m tons- GCNet to reduce human

interactions yet hard copies are sent the customs reconciliation desk

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- Customs reject valuations from destination inspection, why?

- scanner and physical examination problems

- talks of mobile or fixed scanners for off- dock terminals?!

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4. THE ROLE OF GHANA SHIPPERS’ AUTHORITY- its mandate is to protect and promote the interests of shippers in relation to port,

ship and inland transport problems in order to ensure safe, reliable and cost effective shipping

- it does this through:+ infrastructure – Inland port at Boankra+ integrated warehousing= TLP(ppp); bonded warehouses

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- negotiation of charges & service standards+LI 2190 of 2012

- Advance Shipment Information (ASHI) – electronic system to receive shipment information before vessel arrival –LI 2190 (2013 studies – US$75m demurrage; GHC30m rent)- other benefits of ASHI+ real time information for pre-arrival clearance+ information to GPHA, terminals for planning

delivery

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+ advance information for DICs & Customs for risk management planning, etc

- Collaboration and Consultation+ interacts with stakeholders to find innovative

ways to reduce delays and cost = GCNet & clearance process

+ Improved Road Transport Governance IRTG/OPA – UEMOA, West Africa trade hub, Borderless,

- Information and Training + through seminars and forums

+ shipper committees

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5. CHALLENGES TO GSA INITIATIVES- negotiation difficulties+ set charges without GSA; refusal to

negotiate- outcry against ASHI - difficult to understand

since LI was discussed before signing into law - has implementation exposed some selfish

practice? - Should LI 2190 be made stronger?

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6. CONCLUSION- Successful efforts to influence quality

port service delivery and competitive cost depend on:

+ necessary infrastructure; appropriate equipment; innovation and automation of service;+ all stakeholders (esp. govt. agencies) need to collaborate, corporate and

compliment each others efforts

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+ Customs should take over valuation of import cargoes (steps reduced)

+ clearing agents activities should be streamlined

+ GSA LI 2190 needs strengthening in area of negotiation

+ Govts. needs to increase diversification of the sources of revenue in order to reduce pressure on the ports

+ more efforts towards value addition to primary products

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THANK YOU FOR THE ATTENTION