APM Terminals New Measures Constraining Liberian Custom Brokers
Monrovia – New measures imposed by APM Terminals at the Freeport of Monrovia are constraining Liberian importers and custom brokers, and could have a severe bearing on the already struggling local economy in the coming months.
Report by Alpha Daffae Senkpeni – [email protected]
On January 15 this year, APM Terminals announced that it was increasing the annual tariff, with the measure having been put into force since February 1, 2018.
“Per our Concession Agreement, this adjustment is calculated by a predefined inflationary formula, and will have the effect of adjusting all charges in the current Tariff upward, by 7.032%,” the company said in a statement, a copy of which is in FrontPageAfrica possession.
The firm added that it is “The first upward adjustment since 1st February 2015, as there was a tariff freeze for the years 2016 and 2017”.
When FPA sought a clear explanation concerning the upward adjustment in the tariff and how it would impact activities at the country’s main seaport, the firm ignored several inquiries.
The Liberian government, according the 25-year concession agreement signed in 2011 with the APM Terminals, gave the Dutch company exclusive rights to increase tariff and reduce free storage period at the beginning of every year.
APM Terminals is an international container terminal operating company headquartered in The Hague, Netherlands.
It is one of the world’s largest port and terminal operators and provides cargo support and container inland services.
It is the largest port and terminal operating company in terms of overall geographic scope.
When APM Terminals began operations at the port the free storage period was 10 days, now it has been reduced to five days.
A time period, custom brokers say, is limited for clearing containers from the port due to the many bottlenecks involving custom dealings in the country.
“The first thing they can do is they increase tariff every year and reduce the time for free storage and this is affecting our importers and it will surely affect the ordinary Liberian down there,” said one clearing agent, who asked not to be named.
Several brokers say they are already enduring constraints at the port on a daily basis and the seven percent increment in the tariff is now compounding the challenges.
On Thursday, the customs brokers association in Liberia staged a protest at the Freeport of Monrovia citing several issues as grievance including the “increment in port handling charges and tariff by APM Terminals, cancellation of BIVAC contracts and the implementation of outdated penalty on cargo inspections” amongst other issues.
Although the National Port Authority management persuaded the brokers to cutoff their strike action, the problem still looms as the association insists that it wants its plight addressed.
Last year, US$156.62 was charged as tariff for a 20ft container, while US$210.00 for 40ft container, but with the increment, the brokers say it has increased to US$165.00 per 20ft container.
“This will have side effect on the Liberian economy,” says Eric D. Flahnma, a Liberian custom broker.
“The free time of five days is not sufficient to clear container from the port.”
“The normal process to clear a container is 14 days so with only five days, if you have five containers in the port you have to spend a lot of money for storage fees.”
The increment may have a trigger down effect on the prices of major imported commodities and adversely put more pressure of the struggling economy, leaving Liberians, suffering a low purchasing power, to feel the burnt.
The costs importers pay to clear containers from the port would be indirectly pay by the consumers, which means prices of imported commodities would most likely skyrocket due to these new measures implemented by APM Terminals.
APM Terminals is also accused of rejecting the payment of tariff in Liberian dollars, something that recently prompted an investigation by the House of Representatives.
Sources have told FrontPageAfrica the House’s committees on concession; investment and judiciary are still probing the allegation.
Another factor, some custom brokers alleged, is the current tariff from the Liberia Revenue Authority, which they deemed very high.
Meanwhile, a Liberian group, Economy Freedom Fighter of Liberia, (EFFL) is calling for the revision of the APM Terminals concession agreement.
Mr. Emmanuel Gonquoi, head of EFFL, said sections and provisions of the agreements have constantly been abused by the APM Terminals, which has deprived Liberians the right to do Stevedoring as stated in section five (5) 2 of the amended concession signed in 2011.
Mr. Gonquoi is calling on the Legislature to mandate its committees on state enterprise to review and amend the concession agreement.
“The current agreement does not have any cooperate social responsibility in it to reflect the on the nearby communities for economic advancement and social wellbeing of its inhabitants. Section 7.06 (B) of the concession agreement gives exclusive right to the concessionaire to carryout stevedoring,” he said.
Section 7. 17 (c) of the current agreement says Liberians shall hold at least 50 percent of the eight most senior management positions within five (5) years.
According to the EFFL, the APM Terminals is in direct and gross violation of this section, which underscores the need to review the agreement immediately.