Structural Assessment of the Organization and Management of Freight Forwarding in Nigeria

Obed B. Ndikom (Ph.D.), FCILT London

Geography and Environmental Management Department, Tai Solarin University of Education, Ijagun, Ijebu-ode, Ogun state

African Journal for the Study of Educational Issues (AJEDUI) Vol 4, (4)Oct, 2008

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Abstract This paper seems to make a definite assessment of the structural organization and management of freight forwarding in Nigeria. It also x-rays the characteristics, nature, operational performance and managerial prowess of the principles and practice of freight forwarding in Nigeria. Freight forwarding practice, profession and business transaction are often times international in nature and content and most times reflect the functions of clearing and forwarding agents locally, if his coverage of contract says so. Obviously, the organization, management and structure of freight forwarding business in Nigeria are quite distinct from that of clearing and forwarding business, since, their operational and functional modalities are not the same. Therefore, effort will be made in this study to have a synthesized overview of organization, management and structural operational modalities of freight forwarding in Nigeria. Keywords: Structural Assessment, Organization. Management, freight forwarding Word count: 131 Introduction Freight forwarding concept as an emerging profession within the confines of maritime operational modalities, is seen as a human based activity. The activities are guided by international rules, regulations and conventions. The word freight is a good or goods (cargo) that could either be imported or exported through a governments channelized import or export procedures. Most of these freight as one could see are supposed to be moved from a place of origin where they are not immediately needed to a point of destination, where they are needed and where their relative importance or economic value are greater. Obviously the movements of these freights from origin to destination are often done by recognized agents within the confines of maritime operational policy framework (Ndikom, 2006). These agents as one can see are called freight forwarding agents. The freight forwarding Agents are agents that do functions that are international in nature and content. They are international business men that take off the burden of business transactions from the importer and ensures that the business

transaction of the importer are carried out in conformity to specifications to the point of delivery of the goods to the point of destination, if his contract agreement covers delivery to the doorstep. The concepts of freight forwarding in Nigeria are not the same as in most advanced economies of the world. The word freight forwarding in Nigeria has been misplaced and confused with clearing and forwarding business and functions which is not the same world over (Ihenacho, 2005). The freight forwarding profession and business transaction are international in nature and content and most times reflect the functions of clearing and forwarding agents locally if his contract covers such responsibilities at the port of destination. Clearing and forwarding transactions are of localized functions and activities which usually commence from the port of destination, when all imported shipping documents have been handed over to him under an assigned contract by the importer or his agents as the case may be. His functions does not in any way relate to any form of international transactions (Ndikom, 2006). The organization, management and structure of freight forwarding business in Nigeria are quite distinct from that of clearing and forwarding business. This is because, the operational and functional modalities are not the same .A freight forwarder is an international business man, highly educated in the principles of import/export documentation, more organized, well articulated than the clearing and forwarding agents, who are mostly made up of illiterates. They (clearing are forwarding agents) have no fixed office addresses, not properly organized and often times engaged in various vices and sharp practices that are inimical to the growth and development of the ports system. Over the years, freight forwards have been badly hit in this perceived disjointed organizational structure and administration within the confines of the ports system. The obvious dishonest outlook, structure, fraud like tendencies and characteristics attributable to Nigerian type of freight forwarders over the years, has indeed reduced the moral transparency of the profession in our local setting which is rather unfortunate and regrettable. This is because, the freight forwarding business transaction is a noble and
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African Journal for the Study of Educational Issues (AJEDUI) Vol 4, (4)Oct, 2008

respected profession world over; as this is not so in Nigeria due to obvious complexity of the Nigerian ports system. It is common knowledge to note that no freight forwarder or clearing and forwarding agents in Nigeria could be trusted with goods without close monitoring and cyclical supervision on a daily basis. This is because, they are seen as a waste or drain pipes where government/individuals revenue could be traded-off on the grounds of conspiracy with other government agencies at the port, culminating into loss of revenue to both governments and owners of imported cargo. Unfortunately, clearing and forwarding practice has been over the years, misconstrued with the professional practice of freight forwarders, which is not suppose to be. This has been the main stress of our problems with the operational functioning and performance of the system. The concept of nocargo-no port is very essential, as cargo importation/exportation seem to make the ports and freight forwarding business more relevant. Obviously, freight forwarders aid clearing agents will be more useful as soon as cargo importation thrives within the confines of the ports system (Ifezue, 1996). Organization and Management of freight forwarders An organization has to do with managing people and materials on a daily basis for the purpose of achieving efficiency and improved operational performance at the end of the day. Ideally, an organization is a stable system of individuals who work together to achieve, through a hierarchy of ranks and division of labour, common goals. The obvious lines of authority and delegation which are properly designed by management to enable workers of the maritime industry to chart information and ideas through specific channels should as a matter of fact, be drawn for effective administration, management and communication. It is pertinent for every maritime organization to be seen as an information processing system in which messages of all sorts are imported, sorted, analysed and disseminations with a view to achieving specific pre-determined results (Ndikom, 2006). Management is a process of carrying people along by the manager to achieve set out objectives. The organization and management of most freight forwarding
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organizations business in advanced economies of the world as a well structured and organized one. But in Nigeria, the case is different, as the structure of business transactions are one man in nature, organization and management are often times disjointed. This is because most shipping companies that act as freight forwarders are not properly managed. The issue of clearing and forwarding menace has complicated the management and organizational structures of the entire profession. The concept of one-man ownership structure of most freight forwarding organizations with a low capital outlay has made nonsense of the entire organizational structure of the business in terms of structured tax system collections at the end of the day. Most shipping companies offer services as freight forewarding and clearing and forwarding agent for importers and exporters alike. There is need for a comprehensive consolidation reforms to be carried out within the confines of the maritime system with a formidable capital outlay. This will help to have a comprehensive and well structured tax system. This is because over the years, the government has been losing a lot of revenue due largely to the unorganized structure and nature of the maritime industry which could be the first revenue earner for government even above oil industry if properly managed well organized and structured (Ifezue, 1996). An Overview Freight Forwarding Industry The concept of freight forwarding business transaction plays a vital role in the operations and sustainability of the functions and its attendant operational performance of maritime and ports system. The relevance and significant roles of freight forwarders for both locally and internationally in terms of shipping operations and offering of services cannot be over emphasized (Ndikom, 2005). This is because the freight forwarders play a vital role in the operational performance and functioning of the ports system. The coordination of freight forwarding functions and operational performance and also the clearing and forwarding functions locally is of paramount importance in the sustainability of the entire system. It is common knowledge that a freight forwarder must by policy be able to work with the Nigerian Customs Service to achieve a meaningful operational performance for both
Obed B. Ndikom (Ph.D.), FCILT

inward and outward cargo process. There is an ample evidence that freight forwarding organizations and Nigerian Customs Service are distinct institutions, which obviously render services to the clients in the process of port operations. Over the years, it could be seen that port operations have undergone some high level degree of reforms in conformity with recent federal government Agenda. The misconceptions of the role of freight forwarding from that of clearing and forwarding roles have indeed manifested in the production of unskilled professional who do not understand the appropriate tenets that guide import/export port procedures and documentations (Ndikom, 2005). The role of freight forwarders in ports reforming environment cannot be under estimated. This is because, the freight forwarder plays very vital role in issues of ports operations and cargo delivery. There can be no doubt that freight forwarders are making a very significant contributions in the growth and development of port operations and world trade in particular, thereby facilitating the flow of cargo services from port to port. It is pertinent to note that the services of freight forwarders are usually engaged from the point of cargo entry to port of destination (Maduka,2005). That the freight forwarding business is international in nature which has principles and regulations. The complexity of world trade facilitation of today, calls for a high standard of service and deep understanding of the trade and its associated distribution arrangement to ensure that the flow of goods is subject to no impediment in logistic chain since the late sixties, freight forwarding industry has really undergone considerable change in line with recent developments and innovations in the maritime transport transactions and also the growth in the world trade, which the industry has helped to foster. Freight forwarders over the years, have been in the fore front of the development of RO/RO port concept, road haulage, services in short sea trade and containerization system on deep sea services (Ihenacho, 2005). The recent tendency to provide their own international maritime transport facilities, such as road haulage vehicles and containers is indeed commendable, as it will enable them to have closer control over the operations in ports environment. This will also help to achieve

greater competitiveness which in itself aids the development of the maritime business subsector of the economy. Freight forwarding as a profession within the purview of the ports industry, can actually offer a complete service package, covering collection of goods, documentations, packaging, carriage by air, customs clearance and delivery to their respective clients (Ofobrukweta, 1986). Freight forwarding tends to specialize in a particular trade, such as livestock, dangerous cargoes, house. Hold effects, and industrial goods. By acquiring specialized expertise, they are able to raise the standard of services and realize world/national economies of scale, thus, ensuring that goods are conveyed under condition of reliability and efficiency (Folarin, 2000). Freight Forwarding in Nigeria The freight forwarding business world over is purely international in nature but also includes most times the local functions of clearing and forwarding. It is an international business in nature, which most times reflects some form of local coverage. A freight forwarder is an international business man and also an agent who takes off the burden of business transactions from the consignee cradle of business transactions to the point of delivery of the goods to the destination point, in conformity with the rules and regulations of the contract. He is an agent that takes orders from the consignee to buy goods for him and deliver same to his doorsteps. The orders he receives cover the quantity of the goods, type and form, specifications, total purchase and processes of the goods and final delivery to destination point. He is the agent that buys the goods through personal sourcing from the suppliers place, arranges movement of same from suppliers place to port of sail. He must ensure that the goods are in conformity with consignees specifications. He arranges inspections of goods through the provisions of all required documents, select appropriate mode of transport for the goods and ensures that they are well loaded on the vessels, if it is the mode of transport chosen for it. He makes sure that all necessary payments and insurance premiums are paid for the goods before the vessels sails from loading port to destination port. He ensures perfect processing of documents, clearing procedure
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African Journal for the Study of Educational Issues (AJEDUI) Vol 4, (4)Oct, 2008

requirements are met, and loading of the goods at the port of destination to final delivery of same to consignees doorsteps if his contract covers so. A clearing and forwarding agent in Nigeria is fully a localized function and has no form of international connections. This is because, they are agents that are responsible for the clearing process and forwarding of same goods through an appropriate transport mode locally to the consignee. Their duties commence from the port of destination when all shipping documents would have been handed over to him by the consignee, who wishes to appoint them as his agents for the purposes of clearing of the goods at the port of destination. The duty involves clearance, processing of all documents and shipping papers through all appointed ports agents. Freight forwarders Role in ports Reforming Environment Port terminal operation has moved away from what it used to be over the years, to more sophisticated and mechanised systems of operations, due to high-technological applications of information highways and byways of this dispensation. The fundamental concepts of terminal operations have undergone some structural changes in recent years, which involve the movement of containerised cargo from and through it (Ndikom, 2005). This implies that the terminal operations must be able to actually absorb in practice the heavy containerised cargo traffic. It is important to note that the maritime industry is highly technical, professional, competitive, critical, secretive and complex industry, which over years have bedevilled by fraudulent and sharp practices. Freight forwarding profession is quite different from what obtains in advanced of the world economies. Due to the intensive fraud-like transaction nature of the industry, freight forwarders are most notorious in the act of the issues of corruption, which the industry is known of. Freight forewarder whether owned in-house or outside are fraud-like prone and cannot be trusted for whatever jobs they do, within the ports systems (Ofobrukweta, 1986). Importers do connive with freight forwarders to defraud government from its legitimate revenue accruable to her, in the process of clearing the goods at the port. Worst still, they
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even connive with the Customs to extort money from the importer and same time deprives government from expected accruable revenue. The case of Nigerian experience in this regard is most regrettable. Interestingly, freight forwarder plays a vital role in the process of cargo documentation procedures and thereafter, deliver of same to their respective owners (Ofobrukweta, 1986). It is pertinent to note here that without freight forwarders, the issue of logistic-supply chain within the ports system cannot make any serious meaningful contributions. They are the main agents that will ensure that the importers cargo are processed, through all Customs clearance procedures and finally delivers the goods to their destinations with all safety precautions observed. Unfortunately, most of the freight forwarders that operate within the ports system, are illiterates and are not used to the dynamics and changes in the ports, under the reform agenda of government. The vital role they play within the ports system, has called for the need for proper education and sensitisation of the relevant principles of port reforms to these groups of freight forwarders (Ndikom, 2005a). There is need for training and updating their educational standards so as to assist them in the operational performance of assigned responsibilities. This will also help them to understand the thinking of government as regards restructuring principles of the ports system. It will also assist in improving their relationship with the customer and other government agencies that operate in the ports environment. Clearing and forwarding procedures in Nigerian ports The concept of clearing and forwarding procedures and role are an extension of an international freight forwarder. The issue of clearing and forwarding in Nigeria port's procedures is basically local in content, nature and context. He could be engaged by a professional freight forwarder to actually carry out the services of the clearing and documentation procedures of any imported goods in any Nigerian ports. He could also be engaged to process export documents and forward the cargo through established channels with a clear cut assurances of all
Obed B. Ndikom (Ph.D.), FCILT

settlement payments of dues, rates, rents and other ancillary charges (Ndikom, 2005a). This is a system whereby goods and services imported and exported into and out of the country are being processed and handled by the country's customs services at the ports. The procedure is being handled by special type of people who have had knowledge in shipping industry and specialise in clearing of goods out of the port. Institutionally, they may acquire some level of experience and expertise through long exposure to port's operations by either working with shipping companies and also may be an ex-customs officer. It is expected that they should have a reasonable level of education that is expected to assist them at calculating figures and tariff rates indicated in import/export HS code. Clearing and forwarding agents may be corporate bodies or individuals who engage in the act of clearing and forwarding goods in and out of the ports. Largely in Nigeria, most of the people parading themselves as agents are private individuals without corporate offices or could be regarded as brief case carrying agents. Most of these agents are largely illiterates, dubious in nature, dishonest and exhibit all sorts of shady and fraud-like tendencies that make the public see the profession as "cheats". It is common knowledge that some group of clearing and forwarding agents whether "in house" or contracted outside, manifest dubious characters and worse still, may even connive with customs officials and other government agencies to defraud both the cargo owner and government. This sort of corruptive tendencies of agents had over the years, manifested into loss of revenue to government and cargo owners, leading to higher operational costs and lastly, increases of prices of goods at the market, culminating into the inflationary trends (Ndikom, 2005). Documentation processes begin immediately the goods arrive at any designated port of destination in Nigeria. The cargo owner will therefore hand over documents related to the clearing of the cargo to any appointed agents, who in turn will commence documentation and clearing of cargo procedures with the Nigerian Ports Authority, shipping company and Customs Services respectively. Goods imported into the country are kept in the port and the authority

taking care of it is the Nigerian Ports Authority (NPA). The goods will be kept safe at any of the designated shades or terminals within the purview of the ports authority. These goods will remain there until the Customs procedures has been satisfactorily processed and guaranteed at the long room (Ndikom, 2004). The long room is the customs department that looks after all imported documents, process it an also guaranteed a satisfactory official permission therefrom, before taking it out of the port (Ofobrukweta, 1986). a. Customs Transaction: The clearing agents are expected by stated government policy to present all documents related to imports to customs, whose responsibility is basically to check all theses documents in conformity to provisional import duty procedures and give an air of approval before the goods will be sent out of the port. The clearing agent before going to customs office procedure, would have satisfied the mandatory requirements of both shipping companies and Nigeria Ports Authority (NPA) (Ndikom, 2004). When clearing the goods from the customs reforms (documents) that are being used which falls into two categories; they are: 1. Exclusive form and 2. Form sales The "exclusive form" printed by the customs and are soled to the public; while "Form sales" are printed by licensed individuals wishing to transact business with the customs, form sale are also printed at the right hand side of the form. The clearing agent conditions of the NPA, shipping companies and clearing requirements as concerning documentation and clearing procedures in conformity with government set standards before the goods will be permitted to leave the outgate of the port of destination. The relevance of clearing and forwarding agent begins immediately the goods arrive at any designated port of destination. This means that he is not fully involved in the process of import processing procedures, which is purely international in nature. His job starts only when cargo arrives at the ports. b. Import Procedure: Importation can be classified under the following headlines: 1. General merchandise
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African Journal for the Study of Educational Issues (AJEDUI) Vol 4, (4)Oct, 2008

2. 3. 4. 5. 6.

Food items Pharmaceuticals Bulk cargo 90% delivery. Duty exemption consignments. Personal unaccompanied baggage declaration PUBD 7. Bonded warehouse. The procedure of importing goods into the country now entails two stages, which are: a. Provisional import duty declaration (PIDD). b. Out Gate procedures Freight Forwarding Practice Procedures in Nigeria The practice of freight forwarding varies from country to country, while in some advanced countries like Europe and UK, it is practiced with ease, in developing countries like Nigeria, it involves much bureaucracy, because the documentation is guided by the rules and regulations of the port of discharge. a. However, for clearing activities to commence at Apapa Port or any other port, the following documents are required: 1. Endorsed original Bill of Lading (B/L). 2. Attested invoice. 3. Bank Approved form "M". 4. Bank Certified Clean Report of inspection (CRI). 5. Original Import Duty Report (IDR). 6. Packing List. 7. Insurance Certificate. The above listed documents which constitute the shipping documents, will as a matter of policy, be provided by the importer for the freight forwarder to commence clearance of his goods from the Apapa Port or at any other port as the case may be. b. Bill of Entry When the Clearing Agent receives these document as stated above on any imported goods, he then prepares the import Bill of Entry (Form C188); this entry shows the following declarations: a. The name of importer b. The carrying vessel. c. The description of the cargo d. The import duty payable according to the IDR e. The 7% surcharge on the Import Duty as well as the 5% VATS
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c.

Recognized Receiver Banks It should be noted that the import duty, 7% surcharge and the 5% VAT are payable by the freight forwarder either by bank draft or cash but now they arte paid electronically to government designated Banks, which for the time being include: First Bank of Nigeria PLC, United for Africa PLC, Union Bank of Nigeria PLC, Finbank, Universal Trust Bank, Intercontinental Bank, Spring Bank, Skye Bank Plc., Eco Bank, and Oceanic Bank. When the duty has been paid to the bank, the Freight Forwarder collects the bank pay-inslip and Customs revenue receipt and a copy of same should be send to the Customs long room, now called the Customs Processing Centre (CPC) by the bank officials (Buba, 2005). The Freight forwarder after paying the duty as expected, has to lodge the Bill of Entry (B/E) with the Customs Process Unit (CPU) at the longroom. Attached to Bill of Entry are the payment schedule (form C155) and the Certificate of Entry (Form C157) as well as photocopies of all the shipping documents given to him by the importer for processing. The longroom is compartmentalised in five sections for hitch free activities. 1. The import duty Report Section (IDR) 2. The Acceptance Section (in-gate) 3. Cashier (acceptance of payment) 4. The striking section 5. Outgate section (dispatching section). The bill of entry is submitted to the Import Duty Report (IDR) section, so that the IDR collected by the Importer from the Bank and also same is presented by the freight forwarder to the Customs an same will be cross-checked with that sent to the Customs by the inspection agents and if they agree, the Bill of Entry will be dispatched to the acceptance seat (section) (Ndikom, 2004). At this stage, all the entries entered on the Bill of Entry are checked whether they are correctly entered or not and if the duty, 7% surcharge and 5% VAT are correctly paid, the Bill of Entry will be dispatched to the cashers, for payment acceptance. Here, the details of payment made on the Bill of Entry, are entered into the computer and the Bill of Entry is sent to the machine room for machining. After the
Obed B. Ndikom (Ph.D.), FCILT

Bill of Entry has been machined and the Bill of Entry number allocated to it, it will then be dispatched to the striking seat for striking (Ofobrukweta, 1986). Here, the information entered on the Bill of Entry is checked with the ships manifests and if they really conform, as

expected, the Bill of Entry will now pass to the striking stage of the process and then been dispatched to the out-gate for onward dispatch to the shed or terminal, where the goods are kept for Customs physical examination.

African Journal for the Study of Educational Issues (AJEDUI) Vol 4, (4)Oct, 2008

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Freight Forwarding Practice Flowchart To print Tally Sheet in case of general cargo or obtain Terminal Delivery Order (TDO), this process takes a day

LONG ROOM PROCESS SHIPPING AND COMPANY DELIVERYEntry here takes two days. ship, one day SHED/TERMINAL Bill of DOCUMENTATION PROCESS To pay shipping charges and obtain release of cargo When NPA and Ports Security Agencies, process takes about two days. For customs Physical Examination. ThisAUTHORITY NIGERIAN PORTS this process takes one day

Figure 1.1: *Source: Field survey, 2004 (Ndikom).

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Obed B. Ndikom (Ph.D.), FCILT

Delays may result due to the following reasons: 1. Improper documentation on the part of the Freight Forwarder. 2. Short payments of duty on the imported goods, as same will attract a Debit Note (DN). 3. Untimely payment of NPA terminal charges, dues, wharfage, wharfinger and shipping company charges to the authorities concerned for being in custody of the goods. Government, in order to encourage importers, had approved 25% import rebates on imported goods, this is to reduce the cost of goods coming into the economy and in turn, reduce selling prices into hands of the consumers. Beside this, the Federal Government through Nigerian Shippers Council had advocated the reduction/abolition of some illegal charges being made on imported goods by eleven foreign shipping companies which was further enforced by taking them to court (Maduka, 2005). The result of the case wasnt good enough as Government Agent responsible for protecting them could not do a good job. Recently, Government had decided to reduce the port security agencies operating in the port in order to enhance prompt clearance of imported goods and also to avoid delays and accumulation of rents and demurrage, which will later be passed on to the consumer and this sort of vices, as witnessed in the maritime sector, has as a matter of fact, resulted to overheating of our cherished economy (Ndikom, 2004). Shed Examination When the Bill of Entry eventually leaves the out-going seat of the Long room, it is dispatched to the shed for Customs physical examination and to aid processing of the said goods. At this stage, the freight forwarders with the help of NPA, will as a matter of fact, position the imported cargo, for examination by the Shed Custom's Officer. At this stage, the issue of interest comes into play amongst the parties positioned to carry out the said examination. Oftentimes, joint examination are not done by these Agencies at the port due to

personal interests of some of these agents. The officer examines the content and if there are discrepancies or variances with what is entered on the Bill of Entry, he then issues an underpayment notification for the shortfall noticed here under, but if it corresponds with the actual consignment, as regards to the original entries as stated and if he is satisfied with the duty entered, he then endorses same and refers the Bill of Entry for release, which will be granted by an officer not below the rank of the Principal Collector, (Ofobrukweta, 1986). The duplicate copy of the Bill of Entry (Release note) at this juncture, will be dispatched to the NPA and the quadruplicate copy (Exchange Control Copy) will be given to the Freight Forwarder for further documentation with NPA. Nevertheless, during the process of Customs examination, the presence of all the government appointed agencies to oversee the activities of Freight Forwarder such as the Navy. NDLEA, Police, State Security Service (SSS). Directorate of Military Intelligent, NAFDAC and PIDA are required because they will jointly sign the customs examination form (Folarin, 2000). Shipping Documents for Imported Goods a. Form M This is one of the documents required for transactions of an international business procurement. Form 'M' is so essential, as it is one of the documents the bank will require for processing every international import procurement. The consignee or the importer must as a matter of international policy requirements need to complete the filling of the form for every one of his import made. On the consignee's portion, if it bears "To order", it then means that the L/C is purely revocable as the importer was actually assisted by the Bank for that specific import of his made. Ideally, if the name of the importer appears on that consignees portion, it then means that, he was not in any way assisted by the Bank for the payment of the goods imported. To this end, it is evident that the importer has actually paid for all the bills involved for the particular imports and therefore the Letter of Credit (L/C) is indeed irrevocable in all sense (Ndikom, 2004).
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b.

Attested Invoice This is one of the most important documents that are needed for every international business procurement transaction. The documents is called an attested invoice because, it has an international confirmed price value of the goods to be exported into a foreign country, after an inspection has been concluded by the international inspection agents. This is usually issued by the concerned inspection agent after through inspection has been carried out on the goods for export (Ofobrukweta, 1986). c. Commercial Invoice This is not in any way attested, as it contains an unconfined international price value of goods for exports. At this stage of commercial invoice, the goods has not been inspected by the inspection agents, hence the unconfirmed international price. d. Parking List This shows the comprehensive list of goods imported as per the exact invoice (commercial invoice or Proforma} as part of what is being shipped through the the container or cases as the case may be. e. Import Duty Report. (IDR) This is also known as the Import Duty Report. This is one of the documents required for every international business procurement. This is also issued by the inspection agent after an inspection has been conducted by inspection agent via clean report of findings (CFR) had been issued by the Inspection Agent. f. Clean Report or inspection (CFL) Clean reports of findings is usually issued by inspection agents after thorough verification of commercial invoice price as exactly same with the international market price. g. Bill A bill of lading is a document which is signed by the ship-owner or his agent in acknowledgement that goods have been received for shipment, of shipped on board a particular vessel, which is bound for a particular destination and stating terms on which the goods are to be carried (Maduka,
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2004). It is the receipt for the goods, stating the terms on which they are to be carried. The traditional bill of lading is a key shipping document which serves several purposes. i) Evidence of a contract of carriage. ii) Evidence of receipt of goods. iii) Document of title of the goods' notability, possession of a bill of lading is equivalent in law to possession of the goods by the individual. It enables the holder to obtain delivery of the goods at the port of destination and during the transit,, it enables him to "deliver" the goods by merely transferring the bill of lading. Each issued Bill of Lading must be in three copies original which shall include the Port of loading and date of issue. To order: For any bill of loading bearing the word to order, it means that the consignment has to go through the bank and the L/C must be stamped for delivery to the consignee as long as the "form M" was opened through L/C. This also means that the bank actually gave some sort of assistance to the importer in terms of loan or overdraft. If the importer pays all his bills or supported by the bank, his name shall really appear on the consignees portion of the form M, but this has to be delivered to him by the bank, which is also valid for foreign exchange, (Ndikom, 2004). If the said importer pays all his import bills and not really assisted by the bank in any way, bearing 'M', it is evident that his attested invoice, clean report of inspection (CRI) and B/L will be dispatched directly to him by the shipper, while the IDR will now come through the Inspection Agent through the Bank for the importer's collection. N here indicates not valid for foreign exchange but the transaction went through the bank. Touting System and Briefcase Agency Concept Over the years, the maritime industry has suffered from an obvious multiple stress of lack of funding and policy inconsistency. These have had its negative effects on the operation and functioning of the entire port's system, of which freight forwarding practice in connection
Obed B. Ndikom (Ph.D.), FCILT

to cargo importation, are not insulated from such policy aberrations. Worse still, the obvious lack of an operational shipping policy over maritime issues over these years, has really hampered some of the maritime ancillary functions of which freight forwarding practice fell into this cracker, it is common knowledge that the maritime industry is disorganised and disjointed in nature, occasioned by lack of an operational shipping policy. This has allowed the concept of touting and brief case freight forwarding agency to thrive in an industry, that has a dishonest outlook, structure and fraud-like tendencies (Ndikom, 2005). The concept of freight forwarding practice and functional operational modalities in this part of the globe is quite different from what obtains in developed societies. This is because, we do not have a clear cut freight forwarding practitioners within a given maritime landscape. The obvious reasons is that, we are not ripe for such a professional practice and also lack of a conducive environment and the right infrastructural facilities to accommodate the operational functioning of such practice has been the bane. What obtains today as our kind of freight forwarding practice in cargo importation delivery is known as the concept of clearing and forwarding agency operations, which obviously is not the same with the operations and functions of a freight forwarding professionals in any developed nations (Ndikom, 2005). Todays Nigerian clearing and forwarding industry is full of touts and briefcase carrying agents who are more dishonest and corrupt in nature. This connotes the fact that most of these agents have no existing operating offices and addresses where you can trace and locate them, in terms of some unforeseen problems or hazards of the professional practices (Ndikom, 2005). Worst still, some of these touts have no clear knowledge of what freight forwarding practice is all about, thereby constituting nuisance in the overall growth and progress of the profession. Over 95% of these touts, who claim to be clearing and forwarding agents within the system are illiterates. They do not understand the rudimentary knowledge of the practical process of calculating duties and charges from the Customs HS Code for both imports and exports procedures (Ndikom, 2005). This lack of knowledge leave them bare and make them vulnerable in the face of customs officials, during processing of both import and export papers. The issue of touting

and briefcase clearing and forwarding agency has brought in the import processing and documentation procedures. The problems arising from these touting and briefcase agency have been so enormous and attributed to some of the delays in the clearing of goods at the port. It has been alleged that they connive with some government agencies in the port to defraud both government and individuals from expected revenues that would have accrued from such imports (Ndikom, 2005). The issue of fractionalization of freight forwarding Associations in Nigeria has indeed promoted the case of touting and briefcase agency, since there is no central controlling policy that would have fashioned out an operations modalities those agents and reduce the negative impressions these agents have given to the noble profession. Although, we have an act and a constituted board in place charged with execution of these regulations for the associations. It is important to note that the fractionalisation of Freight Forwarding Association has never helped the growth and progress of the profession but has succeeded in reducing the morale integrity and image of the noble profession (Ndikom, 2006), leaving with it shoddy castigations of portending it as a dishonest and fraud-like professions. Ironically, it is important to note that a clearing and forwarding agent whether owned in-house or invited as an outside contractor to clear your goods at the port is dubious, dishonest, cheats, always Conniving with Other government agencies to defraud owners at any given point in time (Ndikom, 2006). Realistically, the issue of dishonest and fraud-like tendencies by most clearing and forwarding officers stem from the manner and attitude of their employer, who ordinarily do not give them good remuneration. The concept of one-man business has a serious factor in the industry, where most owners of shipping companies and clearing and forwarding firms are privately owned, hence, the salary structure in the entire industry is not something to write home about. This is because most of the salary structure of some of these organisations within the confines of the industry cannot be described as take-home pay for a decent worker (Ndikom, 2005). Thanks to the concessioning era, as most terminal operators currently are paying good salary and enhanced employment benefits. Honestly, most of these firms in the shipping industry make good earning at the end of the month, chiefly from the strenuous efforts and hard work of these employees. Ironically, these hard working employees are not paid well and left at the mercies of those shylock employers, who milk all these earning for their personal use, leaving these employees unpaid for months and when they are paid eventually, most of these earnings are nothing to write home about at the end of the day. Against these background, some of these
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African Journal for the Study of Educational Issues (AJEDUI) Vol 4, (4)Oct, 2008

employees decide to make ends meet, by indulging in some shoddy and fraud-like attitudes which see them as dubious and dishonest whether in house or as outside contractors (agents) (Ndikom, 2005). Moreso, it is good intension to state here that, for a meaningful growth and development to occur in the shipping industry, in terms of good remuneration, there is need for government to reform the industry in like manner as the banking and insurance industry were reformed in line with government 7 point agenda. There should be an obvious policy consolidation to occur in the industry, as it happened in the banks and insurance. With an express consolidation policy, the one-man concept of business development will be eradicated totally and as such, it will enhance the remuneration of the entire workers in the industry. This to a large extent will change the structural face of the industry at the end of the day (Ndikom, 2005). Conclusion Over the years, freight forwarding agents and clearing and forwarding agents have played vital roles in the growth and development of the maritime sub-sector of the enlarged economy. Obviously, no doubt, their role and function within the confines of the port environment are pivotal in nature and cannot be under- estimated. This is because without the explicit role and functions of these two agents, no matter the negative impact on the operational performance and efficiency of the system, the government reform agenda at the ports will be meaningless. This is relevant because their functions have to do with cargo documentation procedures and delivery process which happens to be the most critical component factor in the survival and functioning of the ports industry at the end (Ndikom, 2006). References Buba, J.G. (2005). The Nigeria customs and the ports reforms: A paper presentation at the first sensitization workshop on port congestion at Port Harcourt, Rivers State. Folarin, O.K. (2000). An appraisal of the performance of the statutory agencies in the port: A paper presentation at the National Seminar on Eradication of Corruption and sharp practices in the sea ports, stakeholders summits. Ifezue, H. (1996). A welcome respite for the sanity at the port. A paper presented at the 3rd National Conference of the Nigerian Shipping Companies Association (NSCA), on December 15th, at Sheraton Hotel Lagos. Ihenacho, E. (2005) Policy Imperative for Development of viable shipping industry: A paper presentation at a shipping stakeholders forum in Lagoon Restaurant in Victoria island, Lagos on 15th Sept,
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2005. Organised by National maritime Authority. Ndikom, O. B. (2004). "Essentials of Port Reforms: The Nigerian Experience" Published by Bunico Publishers, 29 Shipeolu Street, Shomolu, Lagos. Ndikom, O.B. (2005). Post Operations under a concessioned port system. A paper presented at Port Concessioning and workers orientation workshop, organized by Grand Vision Consult, Ltd, sponsored bt NPA and held at AWABAT Executive Hotel, Shagamu, Ogun State, 25th May. Ndikom, O.B. (2005a). A critical appraisal of port terminal operations and cargo security management in conformity to legal and commercial viability of containerized concept. A paper presented at the Nigerian Institute of Shipping Mandatory Professional Training Programme for 2005 workshop on Container Operational Logistics and Terminal Management. held at Lagos Airport Hotel, Lagos 18th May. Ndikom, O.B. (2006). The kernel concept of shipping operations, policies and strategies: The industry overview. Bunmico Publications, Shomolu, Lagos. Ofobrukweta, M.U. (1986). Shipping and forwarding practice-imports. Printed by Pacific Printers Limited, Yaba, Lagos.

Obed B. Ndikom (Ph.D.), FCILT