The fact that about 80 per cent of goods used in the country are imported also makes the business a profitable one. This also ensures a high demand for freight forwarders in view of their functions, which can be discharged through ships, airplanes, trucks and rail.
A freight forwarder does not move the cargo itself but acts as an intermediary between the client and various transportation services because products sent from one international destination to another often involve a multitude of carriers, requirements and legalities. A freight forwarder handles the logistics of this task for the clients to relieve them of what would otherwise have been a burden.
The General Manager, Madaola Nigeria Limited, Mr. Joe Sanni, whose company‘s focus is Customs brokerage (especially in ensuring that imports/exports conform to the Federal Government‘s fiscal and trade policies), says that anybody that wants to go into the business must be educated enough to understand the common external tariffs.
He says an investor in the business must be able to use the explanatory notes, in addition to having a very functional office that is manned by competent employees.
To commence the business, you must be licensed by the Nigeria Customs Service to carry out brokerage services.
According to Sanni about N215,000.00 is required to renew the licence, with additional N15,000.00 registration fees paid to each of the commands or ports where the company will be operating yearly.
He says there is the need for a prospective operator to have an office space, with full secretarial support, tariff books, Internet service, trained staff and some operational vehicles, among others. Besides, he adds that about N2.5m is needed to start the business at a small-scale level, while about N20m may be needed for a large scale operation, especially if you want to have your offices in most of the ports.
On the number of employees required, Sanni says three permanent employees may be enough on a small-scale, with about two adhoc workers in place.
He says, ”The business is marginally profitable but not very profitable because of the endemic corruption in the ports system in Nigeria. Also, the lack of the harmonisation of the clearing processes amongst the operating stakeholders in the ports robs investors of good profits. But the profits are good enough to cover the running costs.”
The Council for the Regulation of Freight Forwarding in Nigeria is the government’s organisation that regulates the activities of the freight forwarding business. But the operators in the industry fall under an umbrella body of the Association of Nigerian Licensed Customs Agents. Sanni, however, notes though that there are splinter groups within the association currently.
He says, ”The challenges facing the industry include the attitude of practitioners in the freight forwarding business, whose primary motive is to make money at all costs, without worrying about the negative multiplier effects on the economy and image of Nigeria.
“The Nigeria Customs Service must take full charge of the ports system and dictate what should happen there. They must immediately jettison all corruption tendencies. They must generate and publicise basic costs of all items, forestall double standards and undercutting in service.”
Speaking in the same vein, The Chief Executive Officer, Mickey Excellency Nigeria Limited, Babatunde Abdulazeez, says about N100,000 is required to set up a freight forwarding business on a small-scale level , noting that this would take care of a starter‘s business in a single-room office aside from the payment of licensing fee.
He adds that one can also earn commission as a haulage contractor, a sub agent or a freight liner sub agent scouting for small scale exporters of goods to consolidate shipping lines.
On the number of workers, he says about three to five employees may be required for a small scale, while a minimum of 20 employees and above may be required for a large scale operation.
Adbulazeez says, ”The main challenge is the pressure on the freight forwarding practitioners by the clients to source for funds to finance all third party bills for the clients before being repaid without any compensation on the capital outlays by the clients.
”Another problem is the incessant conflicting fiscal policy statements by the Federal Government of Nigeria as regards importable as well as exportable items with a sound long-term goal fiscal statement that is realisable with sustainability as the focal points both the shipper and the freighter can plan for each and every transactional shipment that will make the business a world class.” he adds.
Source:http://www.punchng.com/
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