Ghana’s maritime sector, which is the lifeblood of the nation’s trade and logistics economy, is in turbulent waters. This industry, like many others has its own unique challenges. Some factions of the customs house brokers, freight forwarders and association of importers, have over the years lamented about the high cost of doing business through our ports. This worrying situation must be resolved holistically to avoid undermining economic growth and diminishing the country’s aspiration as a regional shipping hub.
Notable factors to the high cost of business at the ports include the depreciation of the cedi/high exchange rate, government taxes and levies, lack of appropriate infrastructure and processes, port charges, charges by the Ghana Maritime Authority (GMA) and charges by the Ghana Shippers’ Authority (GSA). Some players in the industry have looked at the escalating cost in isolation without considering the responsibilities of the various actors in the supply chain. Instead of a thorough evaluation and analysis of the issue for a feasible and practical solution, the shipping lines and their agents have been made easy targets and singled out for blame. It is imperative that stakeholders choose dialogue, negotiations, and collaboration to forge a path that is mutually beneficial to all players.
Despite the explanations by the shipping lines/agents in various fora and accessible information on practices across the globe, stakeholders have persistently argued that costs like demurrage, administrative or local charges are unfair. The pervasive perception that shipping lines wield unchecked pricing power calls for a dispassionate dialogue on the cost drivers of the operations of the various stakeholder groups.
The shipping lines, in response to these criticisms and for better transparency, recommended the concept of Terminal Handling Charges (THC) as part of their pricing structure. This amongst others included charges on all movement, maintenance and storage of containers levied to the shipping lines by the port authorities. This model was however ill-received on the ground that it was going to increase the cost burden on shippers.
The Customs Division of the Ghana Revenue Authority (Customs) has trained and licensed customs house brokers and freight forwarders on custom procedures to enable them to assist their clients with unimpeded cargo clearance (imports and exports) at the landside. The aim was to enhance transparency in the activities of Customs, advise shippers on custom procedure and documentation for efficient clearance, improve tax compliance and trade facilitation. With the numerous challenges faced by shippers in clearing their cargo, can we ask whether the custom house brokers and freight forwarders have been well trained for their jobs. Has Customs properly executed its mandate? What about the frequent accusations of extortion by custom officials? Knowledge of the custom rules and regulation by parties in the chain will break the culture of solicitating for money and cause officers to act professionally.
The Ghana Shippers Authority at its conception was the state agency responsible for sensitizing/educating the importing and exporting community on appropriate shipping practices as a means of eliminating avoidable costs such as demurrage and detention fees. Shipping malpractices are still rife in the ports—some imports are abandoned for auctioning whilst some shippers still import goods without the requisite permits, to cite a few. Shipping Lines lose out on their revenue, freight and other related charges when cargo is abandoned for auctioning and in the cases where cargo abandoned expires, the shipping lines again pay the huge sums of money needed for their destruction without any hope of ever recovering that amount from the owners of the cargo. Suppliers of some of these abandoned cargos also lose out as they are not paid for the consignment. This state of affairs is unflattering and an image the country should not be happy to project on the global stage.
State agencies like the Electricity Company of Ghana (ECG) and The Ghana Cocoa Board (COCOBOD) are guilty of keeping consignments in containers for years. The prolonged detention of these containers come with costs which must be paid. Containers needed elsewhere to run the global business supply chain are unavailable to the shipping line because the containers are performing the services of a warehouse in Ghana creating a deficit in areas that empty containers are needed most. The shipping lines in this instance will lose on two fronts: Inability to recover costs incurred because of demurrage from these state agencies as well as losing business to competitors due to the unavailability of the containers when needed. It is expected that the Ghana Shippers Authority, as a government agency, would have educated these organizations and raised the issues with the appropriate authorities for prompt resolution.
There are several key stakeholders responsible for enhancing efficiency along the shipping value chain, such as the terminal operators whose responsibility is to deploy adequate equipment for the efficient handling of cargo, customs house brokers, freight forwarders and the Ghana Shippers’ Authority. The issue of bribery and extortion at our ports is also not new and for that matter the activities of all agencies involved in the shipping process ought to be dispassionately examined in seeking a solution to the increasing expense of doing business through our ports.
The special inspections and supervisory roles of the Ghana Standards Authority (GSA), Food and Drugs Authority (FDA), National Security and Narcotic Control Commission (NACOC) also require increased shipper awareness on compliance to facilitate trade at our ports.
Port operations, as a specialized function in the shipping industry are complex, and costs are influenced by a variety of factors: international freight dynamics, infrastructural limitations, customs processes, and operational inefficiencies, as well prevailing macro-economic conditions at the destination port, among others. By understanding these complexities through open and constructive discussion, stakeholders can move away from simplistic blame games and instead tackle the root and systemic causes of high costs in the port ecosystem.
Through regular engagement, parties can understand and appreciate pricing models and drivers bringing more visibility, transparency, and fairness to support the broader Ghanaian economic ambitions.
For instance, although demurrage fees are erroneously perceived as exploitative, they are primarily penalties/opportunity cost for holding on to the containers needed by the shipping lines for shipment. The question is why the delays in clearing cargo? It is avoidable if the shipper takes guided steps to cart his/her consignment through their customs house agents or freight forwarders within their stipulated free period after the container has been released. Operational or administrative challenges with shipping agents may arise occasionally. These issues could potentially be resolved through effective engagement using the customer – client’s relationship. Addressing inefficiencies at customs, cargo inspection, and cargo handling points can drastically reduce demurrage occurrences to the barest minimum, but these require coordinated reform efforts, not finger-pointing.
A decade ago, demurrage was an albatross on the neck of the importing and exporting community who were trapped in the logjam of port terminal and other inefficiencies. Limited port capacity, manual documentations and inspections regimes and the presence of multiple state agencies supervising similar tasks, created bureaucracies that made it almost impossible for a shipper to avoid paying demurrage. That, however, is not the case today: some investment and expansion of port infrastructure has addressed some of the issues of port capacity; there has also been a shift from paper-based to automated and digital documentation; and from destination inspection to fully integrated customs valuation procedures. All these interventions were introduced to enhance efficiency and to cut down the cost of doing business in our ports.
In addition to these port reforms, shipping lines on their part continue to invest in efficient vessels to reduce their carbon footprint and continue to streamline their activities to better serve their clients. Shipping lines also continue to invest in the education, training and retraining of their local staff and ensure a congenial working environment/condition and the payment of the pension contributions of their staff. The shipping lines are tax complaint and pay huge taxes to the government of Ghana. In addition to the payment of taxes to the Ghana Revenue Authority, the shipping lines also pay levies to the Ghana Shippers’ Authority and other government agencies to support their activities. These all-form part of the overall costs that impact the cost of doing business.
A failure to build consensus not only breeds disgruntled business owners but a situation where persistent high costs could drive trade away from Ghana’s ports to regional competitors like Togo and Côte d’Ivoire. This may lead to loss of revenue, jobs, and strategic maritime relevance. Furthermore, businesses facing high logistics costs inevitably pass these expenses onto consumers.
Finding sustainable solutions is not just about protecting commercial interests; it is about safeguarding the country’s economic well-being, and the practicable way forward is not through blame game or finger pointing. Ghana’s ambition to become a preferred trade and logistics hub hinges on the competitiveness of its ports. To achieve this, we need to employ dialogue, partnership, collaboration and the ability to thoroughly investigate the factors that increase the costs at our ports and then apply global best practice to solve the issues for the benefit of all players in the industry.
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
