Nigerian Shippers Council, NAICOM collaborate on insurance cover on containers

The Nigerian Shippers’ Council in collaboration with the National Insurance Commission (NAICOM) is introducing insurance cover on containers as part of efforts to reducing the cost of doing business at the ports.

The Executive Secretary of the Council, Mr. Hassan Bello, disclosed this when the Council’s delegation visited the management of NAICOM in Abuja.

Bello said that the two agencies would also look into risk management at the various Ports to ease business.

He said that insurance should be looked at in the area of policies involving goods on transit, accidents, loss, damages in order to move away from religious sentiments that everything happened for a reason.

He said that the containers deposit at the ports is about N150,000 to N200,000 on each container which runs into billions of Naira thereby making supply costly.

He said this was because most of the containers could not be returned within the expected date due to the nature of the roads.

“As our functions as ports regulator, we have our eyes on the cost of doing business in Nigeria, so in the ease of doing business and the cost of doing business, we want to make our ports competitive, we have to moderate the cost.

“One of the costs is Insurance deposits that shippers pay for taking the containers out of the port.

“The containers are the assets of the shipping companies, they must be returned in perfect condition and so they don’t get that because as at the time the containers are not returned, the deposit is not refunded.

“When you return the containers in good time, you collect your deposit back.

“However, that is not as simple as that, access to the port maybe difficult and if a container is not returned within a certain time limit, they could be a problem, one loses his deposit or part of the deposit and so the shippers has to forgo the deposit.

“Sometimes the shipping company, even when the containers are returned they don’t pay the deposit in good time and that is money lost.

“So what we are saying is, there are lot of issues like that, that we could have the insurance company come to take care of,” Bello said.

He said that the insurance company could come in to make sure the containers are covered at a lesser cost, to reduce some of the challenges faced by the shippers.

Bello said: “We want policy on the participation of insurance in container regime, there is policy on goods in transit of course, we want the policies to cover most of the risk that shippers, freight forwarders incurred including demurrage and rent.

“If this could be covered, that will make shipping extremely cheaper and also Door-to-Door delivery of cargoes, which will be covered by insurance.”

Bello, however, said that in spite of the pandemic the council was working with all other maritime agencies to look into digitalisation of ports to limit the access of physical contact.

He also said that the Kano state government had voted about N2 billion for the structures around Zawachiki Inland Dry Port which had been concession to Dala Dry Port Nigeria Ltd.

Responding, Mr Olorundare Thomas, Commissioner for Insurance (NAICOM), expressed willingness to collaborate with NSC to make insurance significant in the maritime sector.

Thomas commended the NSC for bringing up creative ideas that would deepen the market of the commission in the maritime industry.

“As far as I can remember this will mark one of the few times that any of our stakeholders will come with developmental ideas that will enhance the thought of the commission on how to deepen the market and make insurance relevant to our daily living.

“When it comes to trading, marine is in the frontline and insurance itself move with trading, insurance started with marine insurance largely before fire, but marine is quite critical in the history of insurance development.

“With what we have gone through in the country and globally, we need to take insurance more seriously than ever, than what we have done in the past.

“I have listened to you and I have taken note, these are things we must collaborate and work together as agencies of government.

“It is important for us, what we are getting from marine business is not consistent with transaction in the marine sector in terms of contribution to insurance penetration.

“It is almost insignificant but as an economy, we know that is not the true reflection of what is happening in the Marine Sector and I am happy for your creative ideas,” he said.

Thomas, however, said that the commission would look into establishing a committee with both agencies to factor out the modalities on how insurance can be factored in at the Ports to reduce cost of business.