Consigning inefficiencies at Ghanaian Ports

Consigning inefficiencies at Ghanaian Ports

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Analysis by Esther Gyebi-Donkor, General Manager, Marketing and Cooperate Affairs, GPHA

The presidency is waving the flag for change.  The “Port Efficiency” revolution has swept through the maritime industry at whirlwind speed over the past few months and players in the industry have to keep pace with time lines drawn or face the consequence.

The intention of the government is to facilitate trade.  The relevance of trade facilitation stems from the fact that it results in direct benefits to both Government and the business community. Some of the benefits to government are: increased effectiveness of control methods; more effective and efficient deployment of resources, high revenue yields; improved trader compliance; accelerated economic development and increased foreign investment.

Benefits to traders include: reduced costs and delays; faster custom clearance and release through predictable official intervention; simple commercial framework for doing international and domestic trade and enhanced competition.

Port efficiency gives the Port the capabilities of reducing delays in clearing cargo from the port which matches the needs of the customer and the mission of Ghana Ports and Harbours Authority (GPHA). Port efficiency had been trumpeted as a major part of GPHA’s strategic plan over the years, but I must concede that in spite of all its benefits, GPHA wasn’t swift enough to establish an e-clearance (paperless) implementation at the Ghanaian Ports.

Again, port efficiency is a crucial aspect of the port’s operation but hinges mainly on the operations of other stakeholders in the port. With the demonstrated commitment of the present Government, it is expected that the Port will receive the necessary cooperation from other institutions and stakeholders to make up for lost time.

Years earlier, GPHA had already set the ball rolling for a Paperless Port. In a major departure from the previous reliance on the use of paper based documentation, GPHA adopted e-Solutions for the booking of berths online (E-vessel Booking), E-gate System, Microsoft Dynamics AX 2012 R3 geared to improving management processes and the acquisition of the Jade Master Terminal which is a Terminal Operating System to be interfaced with the Port Community System and the systems of other major Stakeholders in the Maritime Industry.

The E-Booking was launched at the end of 2015, awareness created and implantation started in 2016.  Part of the E-Gate System (E-ID Cards and Biometric Identification Systems) for the entry of Port users is in use.

It is not just about talk and test anymore, it’s very much about action.  Maybe what happened was that we were not fast enough or we did not have enough legal backing as a Port Authority to change the Paper operation and other delayed processes of other stakeholders who operate in the Port.

There is excitement in the maritime industry especially at GPHA that, having the involvement of the Presidency (playing the lead role) in the Port Efficiency Crusade will provide the needed results.

All of a sudden there is a display of a perfect collaboration and coordination among the stakeholders, all avoiding the “blame game” that we used to witness.  The respective stakeholders are currently poised to maximize the new developments around us for the realization of the “Port Efficiency” agenda.  Port efficiency has become a priority for all.

With the enthusiasm demonstrated by the Vice President His Excellency Dr. Mahamudu Bawumia, the only immediate challenge that I can foresee when the Port Clearance is fully automated is system failures slowing down the process and causing delays. The e-Solution providers’ system down time will cause delays in lodging of entries, electronic payments and general processing. What will be the plan “B” when the systems are down? Paper or no Paper?

The poor performance of a Port and container terminal can also be partly due to lack of investment in infrastructural development, equipment and workforce. From the infrastructural development point of view, GPHA have got tons of it to show.

The fact that GPHA is solely responsible for the provision of both infrastructure and superstructure, GPHA has systematically recorded progress in the provision of port infrastructure and superstructure (berths, quays, jetty, gantry cranes, Harbour Mobile cranes and other facilities and equipment,) in the bid to make our ports efficient over the years.

How easy is it to convince other stakeholders to do what is good for the customer when they operate based on their individual laws and are autonomous? All the institutions are authorities of their own.

The Presidency’s Paperless and joint inspection directives and the subsequent road map (full automation) when implemented by 1st September 2017, will be the most significant step towards ensuring Port efficiency in the Ports of Ghana but that will not be all.

The question is should we wait for further directives from the presidency? No! All stakeholders in the industry should review their processes and make it efficient as part of the change. Various stakeholders would have to pay attention to issues raised below: 

Shippers/Consignee Related

  • Incorrect or discrepancies in documentation that require amendments prior to commencement and during the clearance process. Documentation which forms the basis of the whole procedure of clearance is beset with problems. Most delays in clearing is due to the inadequacy of information supplied by importers for processing. Non-complaint level is so high.
  • Insufficient knowledge of rules/regulations and documentation requirements on the part of Shippers/Consignees.
  • The inability of Agents/shippers to make prompt payment for fuel and other logistics for loaded trucks to leave the Port or Port Area especially for Transit.
  • Problems of money transfer and related issues for the Transit trade since there are currency differences.
  • Groupage is being done in Full Container Load (FCL) containers instead of Less Container Load (LCL). Meanwhile, the goods cannot be cleared on LCL basis because the agents are not consolidators; therefore, the Terminal requires them to pay for the full container before it is opened. The agent will also not be given access to the Terminal Container Freight Station. All the parties whose goods are in the FCL container may not have the money available at the same time therefore delaying the clearance of the other parties and increasing their cost.

Shipping Lines Related

  • The non-uniformity in manifest provided by Shipping Lines results in delays in documentation
  • Untimely issuance of local shipping line charges. Some Shipping Lines/agencies are noted for adding new charges on their invoices without being checked. Even when there is Government intervention, it is difficult to get them to comply.
  • Some Shipping Lines are still charging VAT on transit cargo although the then Commissioner, Domestic Tax Revenue Division in December 2014 confirmed to the Port Community through the Ghana Shippers Authority that Transit goods should not attract VAT except when they are entered for home consumption with the approval of the Commissioner General. Reference Section 42(8) of the Value Added Tax 2013, Act 870.
  • Excessive container deposits demanded by shipping Lines especially for the transit containers.
  • Non operationalization of the 7 days operation by the shipping lines (they do not come to work on Saturdays while the terminals and customs have complied and come to work).

Port /Terminal/CFS Related

  • Delays in transferring containers from the Port to ICD for delivery.
  • Loading delays due to inadequate Port equipment and yard constraints sometimes
  • Inadequate storage and devanning facilities for the increasing transit traffic
  • Cumbersome nature of the Terminal tariff application

Custom Related

  • The consignees have been complaining about high custom duties and taxes and their inability to pay on time delays the clearance process. Delays in customs clearance are often major contributors to time in storage and consequently, to additional storage charges (increase cost). The cargo must stay in Port storage until the duties and taxes are paid except for those who are under the warehousing regime and special cases.
  • Frequent shortage of Custom tracking Device for the transit trucks and for container transfers, warehousing etc.
  • The rate of exchange of cedi which is usually released on Friday afternoon and declared on Tuesday is actually utilized by clearing agents from Tuesday. Thus, it will be more appropriate if the rate of exchange is implemented from Tuesday to Mondays to prevent Mondays being wasted or even monthly.

Transporters

  • Scarcity of trucks to load cargo causes delays.
  • Arbitrary increment of transport rates (fares) by truck owners.
  • The ongoing impasse between the Joint Association of Port and Transport Union Operators (JAPTU) and the Burkina Shippers Council (OTRAF) concerning cargo sharing as far as transit cargo is concerned.

Freight Forwarder

  • Limited investments in their business. Shippers would have to bring money before the clearing process begins thus causing delays.
  • The account (Bill) rendered to consignees by their Agents for the service rendered have many questions unanswered. Invoices are forged to increase charges which sometimes delays clearance because the consignee may pay duty to Custom but will postpone payment of Terminal charges to take delivery at a later date because of lack of funds. It increases cost to the consignee.
  • Groupage is being done in Full Container Load (FCL) containers instead of Less Container Load (LCL). Meanwhile, the goods cannot be cleared on LCL basis because the agents are not consolidators therefore the Terminal require them to pay for the full container before it is opened. The agent will also not be given access to the Terminal Container Freight Station. All the parties whose goods are in the FCL container may not have the money available at the same time therefore delaying the clearance of the other parties and increasing their cost.
  • The increase in the number of unscrupulous clearing agents/consignees who under declare leading to short collection and its’ attendant delays. Some of these agents also run away with consignees’ money which delays the clearing process and increase cost.

Others

  • Ghana’s corridor lacks rail infrastructure to provide an alternative and a cheaper option of transportation.
  • The Hamile- Burkina Faso road is not in good condition and must be fixed to reduce the transport time spent by transit trucks.
  • Directives have been given by the Vice President on Customs Barrier removal but nothing have been said about the Police barriers yet. Meanwhile there are too many Police check points and extortion of money from transit trucks on the roads. Harassment of drivers by the police on the roads is rated higher than the Customs officers.

Conclusion

Unsatisfactory services and many organizations’ inability to respond quickly enough to an ever changing Port customer needs is for Government and the general public an unsatisfactory status quo. It is believed that the industry is overly inward-looking and ripe for change for that matter, drastic action is necessary.

The three directives given to the Port Community to accomplish by 1st September, 2017 by the Vice President, is just the beginning of a series of moves by government to make the country’s Ports more attractive to Port Users.

This has been difficult in the past because we have multiple agencies currently handling several parts of cargo flow instead of having one agency managing all the processes to give coordination and focus.

Given the current weak legal backing/support that GPHA as the body who should spearhead the implementation of initiatives has, one can only say that the Presidency’s intervention and enthusiasm is timely and welcoming.

In future the legal issues must be addressed to give authority to the appropriate institution to efficiently manage the Ports of Ghana without the Vice Presidents’ intervention.

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