Ghana went down by four places to 118 in the latest World Bank ease of doing business ranking. The country dropped from 114 in 2019 to 118 in 2020 for the World Bank flagship publication on the ease of doing business among 190 economies.
In efforts to access easy and cost effective ways of doing business at Ghana’s Ports, Eye on Port this week engaged experts from major stakeholder agencies in the port trade to access the role of the shipping lines and their impact on cost efficiency and ease of doing business.
Speaking on Eye on Port live interactive panel discussion, Adam Imoru Ayarna, Executive Member of the Ship Owners and Agents Association of Ghana said the shipping lines play significant roles in the maritime trade by transporting goods from different countries into Ghana but bemoaned the poor time consciousness of the Ghanaian trader and other port facilities.
“What I have seen in Ghana is we are not mindful of our time and that is the beginning of all failures. Over the period there have been chops and changes in the industry which does not really help,” he submitted.
Varied exchange rates
Fred Asiedu Dartey, Head of Freights and Logistics at the Ghana Shipper’s Authority and Eddy Akrong, Executive Member of the Ghana Institute of Freight Forwarders, on their turn complained that shipping lines have assumed the autonomy to peg their own exchange rates making it expensive for importers to clear their cargoes and adding to the increasing cost of doing business.
“What we found out is that even though the Bank of Ghana has given a certain exchange rate for which government revenue and other charges are been used to apply, the Shipping Lines apply varied rates,” Fred Asiedu Dartey revealed.
The two whose outfits represent the importing public also lamented that shipping lines are failing to work on weekends even though efforts have been put in place to ensure that Ghana’s Port operates 24 hours and 7 days yet the Shipping Lines charge demurrage which includes weekends.
“Thankfully now we have a port that operates 24/7 and you will find out that Shipping Lines operate 8am to 5pm from Mondays to Fridays so if there are things to be done over the weekend the Shipping Lines offices are closed. However, if the particular consignment had gone on demurrage then the demurrage continues to count including the weekends,” Asiedu Dartey added.
Adam Imoru Aryana, however, responded that the Shipping Lines as private businesses would have to make a business analysis to find out whether it makes commercial sense to open its offices on weekends.
“This is private business so if we have to change anything we have to look at the dictates of the business and see whether it makes commercial sense because serving our customers is also very critical,” he stated.
He revealed that during a pilot programme in 2014/2015 by customs to operate 24/7 Shipping Lines opened on weekends but had a poor patronage. Adam Imoru Aryana suggested that before looking at the issue of working on weekends other players in the clearance chain should prioritise working on time so that there will not be need for weekend overtime.
“Let us look at the whole chain. What are we doing from 8 am to 11 am? If we can close that gap, there will be no need to work during weekends.”
Decoupling from customs
Eddy Akrong criticised the current system where Shipping Lines only release cargo after customs compliance has been done and called for decoupling of the two activities.
“When we do a declaration and we pay duties it goes through customs compliance. Until customs compliance is done the Shipping Lines will not release your goods. Why should that be so? I have a contract with the Shipping Line to carry my goods to Ghana so once I come to Ghana and have my bill of lading and I walk to them, they should give me a release. It should not be tied to customs compliance,” he articulated.
Fred Asiedu Dartey again called on Shipping Lines to make their container deposit refund system transparent and swift to reduce the cost of trading and ease of doing business.
“You will need to make a deposit before carrying the container out of the port but when the container has been returned the refund mechanism is not straightforward. A lot of the times when you have to pay the deposit you pay it upfront, but when refund has to be made it takes one week or two weeks. That is money locked in there,” he complained.
His assertion was corroborated by the Ghana Institute of Freight Forwarders.
But Ayarna admitted to an administration challenge that does not make it possible for Shipping Lines to give out refunds instantly.
“If it is going beyond one week then it is a challenge. It is an administrative challenge that needs to be looked at,” he said.
He emphasized that Shipping Lines are not interested in demurrage but quick turnaround time for their vessels so importers should not entertain accruing demurrage and abide by the terms in their contractual agreements to clear their goods within the stipulated time frame.
“People say Shipping Lines are earning demurrage but that is not what we are in the business for,” he stressed.
Fred Asiedu Dartey said the Ghana Shippers’ Authority has been educating importers to avoid the payment of demurrage as the cost involved in the payment of demurrage are so high. He revealed that Ghanaians paid in excess of USD 96 million in 2016 alone but there have been improvements recently.
He revealed that a workable relationship is in place between the Ghana Shippers Authority and the Ship Owners and Agents Association of Ghana, to improve the current difficulties.
“We may not be clothed with the powers as of now to attempt to crack the whip, however, all of the issues of commercial interest that border the shipper who is the ultimate bearer of the burden are the issues we bring to the attention of the shipping lines,” he disclosed.