The 1st Vice President of the Ghana Institute of Freight Forwarders (GIFF), Paul Kobina Mensah, has revealed the perspective of clearing and forwarding agents on the newly agreed rates for freight forwarding services in the country.
According to him, the professional fraternity has welcomed the new rates despite expecting more.
He said they fought for a 250 percent increase in the rates from the last negotiated rates in 2016. Some of the reasons he expressed included the operational cost of service rendered, exchange rate volatility and inflation.
“In 2016, the dollar rate was GH¢3.9; and at the time of the negotiations, it was around GH¢11. If you look at the margin it is over 300 percent. Inflation was 40.4 as against 17.5 in 2016. Putting these together, the best we could ask for was 250 percent. The rates, as we have today, will last for two more years, of which economic uncertainties are expected,” he lamented.
He revealed that there was a 110 percent increment in the rates, which he described as ‘woefully inadequate’.
The 1st Vice President of GIFF nonetheless stated that his outfit settled with the negotiated rates to promote trading activities for shippers who are their primary clients.
He expressed hope that with increased volumes of cargo cleared, freight forwarders will make up the deficit lost.
Mr. Mensah was speaking on the Eye on Port programme, following the negotiation process between the Ghana Shippers’ Authority and the Committee of Freight Forwarder Associations (CoFFA).
The rates, in principle, are expected to have been implemented at the start of the new year, 2023.
The negotiated rates, which would last for a period of two years, are expected to guide importers and exporters plan their operations.
Some of the rates are as follows:
Conventional general cargo – such as steel products, plates, drums – of up to 100 metric tonnes will cost a maximum charge of GH¢1,200, with every additional tonne costing GH¢6. A Saloon car will cost an importer GH¢1300 for the services of a freight forwarder. For containerised cargo, a 40-footer container will cost a shipper GH¢2800 whereas it costs GH¢2000 for a 20-footer container.
According to P.K. Mensah, the 2022 negotiation was the most hectic negotiation process they had ever been subjected to. “It took us six good months. Our first meeting was 4th May and we concluded in October,” he expressed.
Contributing to the subject, the Head of Freight and Logistics at the Ghana Shippers’ Authority, Fred Aseidu-Dartey, explained that it was necessary for the authority to undergo a rigorous and thorough process to arrive at a satisfactory outcome.
He said it was very important to tackle the various intricacies peculiar to the seaports, airports, land borders and transit as well as the various categories of cargo.
“What happens at the airport is different from what happens at the seaports. When we talk about vehicles categories alone, for example, we are talking about motor cycles, saloon cars, SUV, and earth moving equipment. We needed to assess why the various increments for each category was necessary and fair. We needed to be meticulous so we ensure that we get value for the Ghanaian shipper.”
The Head of Freights and Logistics at GSA intimated that the exchange rate volatility and inflation were not the only factors considered for the negotiations, but “a basket of different variables”.
Mr. Aseidu -Dartey expressed excitement at his outfit’s ability to finally deal with the element of miscellaneous charges that had been subject to debate over the years in the shipping industry.
The miscellaneous fees, were often arbitrary charges for related services offered by clearing agents.
“What we have achieved is that beginning 1st January the issue of miscellaneous is done with. Everything has been consolidated in the charge and we expect that the freight forwarders are able to operate within that scope. The benefit for the shipper is that now you can have a receipt that is a true reflection of how much you spend clearing the goods,” Mr. Aseidu-Dartey revealed.
He however revealed that the authority is yet to finalise the rates and modalities for the consolidators of cargo.
“We had to hold a specific meeting with all the consolidators. This is because some of these consolidators have their own Container Freight Stations whereas others do not have, making their operations different. Thus, you cannot apply the same rates. We have to consider which services and facilities at their disposal can affect the rates. However, the outstanding issue with the consolidators has to do with the shipping line charge, which is a component part of their charge to the shipper; and because a number of those charges are in dollars, with the current fluctuations of the dollar rate, fixing a certain rate is difficult,” he explained.
He said the GSA has developed models that will be tested in live scenarios to arrive at the best outcomes when it comes to the services of consolidators. The case of consolidated cargo, according to the official from the Shippers’ Authority, is expected to be finalised by end of January.
He entreated the various importers and exporters in Ghana to familiarise themselves with the new rates for clearing and freight forwarding services so as to factor them within their operations.
