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Interview of the terminal manager of Fivestar Logistics Terminal Apapa, Capt Jon Jon Peters as part of the special focus on five years of private terminal concession in Nigeria.

"Half of the shipping lines calling Lagos now did not do so in the past due to reasons of insecurity, berthing and operational delays" - Capt Jon Jon.

Capt Jon Jon studied economics at Bombay University in India before qualifying as a master mariner in 2000. According to his resume’, he attended Royal Melbourne Institute of Technology as well as the Metropolitan Fire Brigade Training College, Melbourne Australia in 1993 and 1997 respectively from where he bagged qualifications in petroleum oil tanker safety and prevention and control of fires aboard ships, among other endorsements. A member of the Nautical Institute, he began his present stint as terminal manager of Fivestar Logistics Ltd Terminal at Tin Can Island Port in 2006. But that was his second coming under the employment of the Comet Group of Companies. From 2004 to 2006, he was the agency operations manager of Comet Shipping Agencies Nigeria Ltd stationed at Tin Can Island Port with a schedule to liaise and communicate with principals and port officials to ensure a quick turnaround of vessels, while controlling operational costs. At the time, Comet Shipping Agencies was about the largest local shipping agency, being agents to MSC, Contilines, Clipper Shipping Lines Ltd., Global Transports Oceanico S.A., Oldendorff and MUR of South Africa, amongst others. Aside from his engagement at the Comet Group, Capt Jon Jon held previous employments that saw him working around other port cities in Nigeria, in neighbouring West African countries and as a marine surveyor and consultant based in Hong Kong and covering Hong Kong and parts of Southern China. In this interview, he explains the work of Fivestar Logistics Ltd at Ro-Ro port and how the improving national image of Nigeria as a port destination and hub can be consolidated. It is noteworthy that majority of car carriers coming to Nigeria must use the Fivestar Terminal because it is dedicated by facility. But how has the private concessionaire bettered the atmosphere of commerce in that sector of the industry? Excerpts:

DDH: Capt, how do you welcome incoming ships to Fivestar Logistics Ltd Terminal, what you’re your procedures?
Capt Jon Jon: We have different kinds of customers. One is the regular or what we term as the liner shipping lines which call on a regular basis at Fivestar Logistics (FSL) terminal from once a month to thrice a month. The other kind of vessel is a “one off” or “tramp” which only makes one call. This kind of vessel is not so common at FSL since our main clients are container and Ro Ro vessels which are generally liner. With regard to flow of information, the shipping line’s local ship agent communicates to Five Star the expected date of arrival of the vessel, the quantity and kind of cargo and any other specific instructions like heavy lift cargoes, etc. On berthing arrangements, we liaise with the agents and they attend the NPA berthing meeting along with the terminal representative, where the vessel is stemmed to our terminal. Agents like Comet Shipping Agencies, Alraine, Hull Blight, etc are responsible for government agencies like Immigrations, Customs, etc, to come in and complete their formalities on board the vessels. Only after the formalities are complete can the discharging process begin. Prior to the vessel berthing the terminal planning department forecasts the estimated completion time. This information along with the berthing lineup is sent electronically on a daily basis to the ship agents/shipping lines via a “ship arrival list” .The terminal keeps the ship agent/line appraised of the actual time of completion thus allowing them to arrange the pilot and the tugboats if required, as well as the final boarding processes by the Government agencies.

DDH: On average how long do vessels stay in your terminal working?
Capt Jon Jon: Ro Ro vessels can stay from eight hours to twenty-four hours. On average, I would say about 24 hours, depending on the number of units onboard and the kind of vehicles on board. If you have brand new vehicles, you can discharge up to 1,500 a day. If you are talking about second hand vehicles and lorries, because they are difficult to start, may not have tyres or they are loaded with heavy goods, they can take more time. Container vessels spend abour 3-4 days alongside.

DDH: When they don’t have tyres, how do you unload them?
Capt Jon Jon: We use forklifts inside the ships hold to pick them up and place them on our trailers, which we then tow off the vessel. We are well equipped for this kind of cargoes as it forms a major segment of our traffic due to the popularity of “tokunbo” or second hand vehicles in Nigeria.

DDH: And these are mainly ….?
Capt Jon Jon: Trucks, cars, trucks loaded with trucks on top of it, and cars on top of it. Three to six smaller cars loaded on top of one bigger truck.

DDH: And this is allowed?
Capt Jon Jon: Yes it is allowed from European ports. American ports do not allow it. They are very strict. And then also European vehicles are allowed to be loaded with goods, televisions, clothes etc.

DDH: On average how many ships call at your terminal weekly or monthly?
Capt Jon Jon: Monthly about twenty to twenty-five vessels.

DDH: How many ships have you received since inception in 2006?
Capt Jon Jon: ….About 1150 vessels till September this year.

DDH: Also what is the throughput so far in terms of volume of the traffic, like number of containers, cars, etc?
Capt Jon Jon: For 2010, for example, vehicles about 78,000; import containers – about 25,500 teus; full export containers – about 4,000 teus; general cargo about 35,000 metric tons.

DDH: What are the common hitches you experience in running the terminal?
Capt Jon Jon: Access roads and government agencies. Because of the government agencies, the process of release is more convoluted causing unnecessary delays. There are too many parties involved. Government has taken cognizance of this issue recently and they intend to restrict the total number of Government agencies in the port to six only.

DDH: Now they have been asked to quit the ports, what is their response?
Capt Jon Jon: They have been given two weeks but they are still around.

DDH: In view of the challenges, how does your organization try to cope with their coming at different times since you still have to deliver efficient services?
Capt Jon Jon: We try to dialogue with them and also place staff for duty for longer periods in order to accommodate them. We also appeal to the authorities to have a 24-hour cargo clearance in place in order to avoid traffic gridlocks around peak delivery times that cause hardship to the general populace as well as the economy

DDH: Are there other constraints?
Capt Jon Jon: More port space is needed. You know Nigeria is a very big market in Africa for maritime trade and should be better positioned but the truth is that space has been wasted around the ports. Across the road, space is misused; across the bridge, space is misused. These areas should be converted to storage areas. Even the tank farms should be shifted. Nowhere in the world do you have tank farms located in close proximity of the cargo ports. It’s not even safe in terms of fire and explosive hazards.

DDH: Have the association of private terminal operators had the opportunity to table these concerns for their attention?
Capt Jon Jon: Yes, many times. They are aware of it.

DDH: When you took over the facilities from NPA, how did you find them?
Capt Jon Jon: They were in a mess. They were not designed for smooth operation. They used large offices. Everybody had their own enclosed office. Spaces which could have been used for cargo were used for offices. Thereafter we broke them down and they were converted, at times, to sheds. As per the guidelines of our Promoter, Lt.Gen. T.Y. Danjuma, we are encouraging the use of large open offices spaces. This discourages illegal activities as everyone is visible to the managers. Anyway, we have worked our way around it. I can say that we have now utilized every possible useful space and yet our stacking areas and vehicle parks are not adequate for the volume of cargoes flowing into the country.

DDH: So, what are you doing to cope with the shortages?
Capt Jon Jon: We are transferring cargoes to off-dock [inland bonded facilities]. Vehicles are going off-dock as well now. This is a huge help for us.

DDH: When ships call at your terminal, how much of direct delivery do you do?
Capt Jon Jon: Only new vehicles like Toyota or Hyundai go by direct delivery because they are going under bond. The large companies like Toyota have their own bonded car parks outside. The Customs formality is much easier. They can just take the vehicles out because it is a bonded area they are going to. Everybody else have to go through the whole customs process.

DDH: So, the rest of the cargoes have to be stored. What kind of storages do you have?
Capt Jon Jon: We have vehicle parks and we have the container yards and we have sheds near the vehicle parks. Vehicles’ dwell time is about two to three weeks. We give them three days free, after that we charge them. Container dwell time is about two to three weeks.

DDH: How do you define dwell time here?
Capt Jon Jon: The time it remains in the terminal before it is collected by the consignees.

DDH: What is the level of compliance with the dwell time specification? Do you have any lagging behind, any overstay cargoes, etc?
Capt Jon Jon: It all depends on the shipping lines or the load ports. If your container is coming from the Far East, China, etc, the contents of the containers are mainly trading goods. The traders are very anxious to get the units off the containers and turn them around fast and get their returns. As opposed to shipping lines from Eurpoe. Their contents are raw materials, tyres, those kinds of things. The consignee is generally in not much of a hurry to get his goods out. So cargoes emanating from Europe may stay three to four weeks

DDH: The main types of cargoes that come to your terminal are…?
Capt Jon Jon: Vehicles and containers.

DDH: What is the process of cargo release in Five star Logistics Ltd terminal?
Capt Jon Jon: For cargo release, a customer first obtains his release from the shipping company after he presents his original bill of lading and makes payment of what is due to the ship agency/shipping line. He then comes to Fivestar, determines the location of the cargo, completes the custom examination process, completes his custom duty process and Five Star charges and takes delivery of his cargo.

DDH: At what point does he go to Customs, is it after he has paid Fivestar?
Capt Jon Jon: Not necessarily. It depends on the individual, it’s up to them. But most of them normally do it simultaneously for Customs and Immigration, etc.

DDH: In cargo release processes, how much of fraud can go on undetected?
Capt Jon Jon: We have cut it down drastically because we have computerized everything. We are still going further in this respect by acquiring a new Terminal Operating System which will also enable us to keep an electronic tally of cargoes, thus eliminating human error. In addition, this will reduce the need for physical location of cargoes, reducing the need for anyone to enter the car parks, which will finally result in elimination of stealing and vandalization. This should be up and running by early next year, if not before.

DDH: What are other challenges to efficient port system that you have?
Capt Jon Jon: We come up against a lot of fake documents, fake duty payments, fake TDOs [terminal delivery orders], fake bank payments.

DDH: When these happen do you lose money?
Capt Jon Jon: We lose mainly our rent and our charges.

DDH: What other impediments to the smooth running of the terminal exist?
Capt Jon Jon: The other problems we have are not with cargo per se but in ship turn around because NPA still controls the pilots. Vehicle carriers generally work very fast. What happens in most cases is that the time the vessel takes to come in because there is no pilot, no tug boats and the time after she completes her work and wants to sail out, because there is no pilot and no tug boat, is sometimes more than the actual time for operation at the port. The ship finishes in twelve hours and may have lost one day: twelve hours to come in, twelve hours to go out. Having said that it is noteworthy to say that there has been a slight improvement this year, but still a lot needs to be done to reach an internationally acceptable standard.

DDH: That is the problem for NPA, isn’t it?
Capt Jon Jon: Yes. It has to be privatized. Most parts of the world I have travelled to and worked in, they have privatized pilotage. It may be three companies rendering the service. This leads to competition which encourages more efficient and cheaper services.

DDH: Is your experience with NPA pilots the same with other terminal operators in Nigeria?
Capt Jon Jon: I would believe so.

DDH: And your suggested solution…?
Capt Jon Jon: (Cuts in) Privatization. Even Mr Adebayo Sarumi, the ex-NPA managing director, recommended this once when I attended a maritime conference. The solution is to privatize pilotage and pilot training. There is scarcity of pilots in Nigeria.

DDH: Now, you have experienced port operations in Nigeria before the seaport reforms which gave rise to the concession programme and have been involved with the system since the inception of concession. How do you compare the two situations?
Capt Jon Jon: Oh, serious changes. Vessel turn around, vessel productivity, number of vessels coming, number of shipping lines coming. Half of the shipping lines calling Lagos now did not do so in the past due to reasons of insecurity, berthing and operational delays.

DDH: Can you give examples?
Capt Jon Jon: MOL, Sallaum, K line, and many many more. Interestingly you will also observe quite a few new container shipping lines are now calling Nigeria which did not happen in the old days, for example , CSAV , Nile Dutch ,UASC, etc. You probably already realize that increased competition leads to lower freight rates which passes down finally to the common man on the street in the form of lower prices of commodities.

DDH: So, we have more credibility now?

Capt Jon Jon: Defnitely

DDH: What more could be done to gain further credibility?
Capt Jon Jon: Security in the port. Control of the gates by NPA, especially in respect of the movement of trucks in and out of the ports. Once the trucks are in, you can’t turn them back. You find trucks carrying containers breaking down in the ports.

DDH: So, when the break down inside the port, it becomes your problem?
Capt Jon Jon: A very big problem causing huge traffic gridlocks.

DDH: Now you talked about security in the port, how can we make it better?
Capt Jon Jon: First of all, clearing agents need to be regulated. On average, I meet at least one consignee daily who has been duped by a fraudster (419) agent. Some form of control and liability/responsibility needs to be exercised. Presently, once anything illegal is carried out using their name, they vanish without a trace. The Nigerian waters need to be policed more strongly. Regrettably Nigeria is acquiring the status of a dangerous port as far as piracy goes.

DDH: So that if any fraud is perpetrated using any recognized agent’s name, that agent is ultimately responsible and liable?
Capt Jon Jon: Yes. That should help security in the port.

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