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Bonded Warehouse

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Submitted By ibrad
Words 1890
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1.0 GENERAL DESCRIPTION OF STUDY
The hallmark of the globalization process in the world today is to create a trend of unit business that stands separate but complement the attempt at establishing an integrated network of services for the greater benefit of the people.
It was explained that the activities of agencies and agents attached to the clearance of cargo from the ports has in recent times altered this process creating all sorts of bottlenecks. This has caused a negative set up to the roles of the ports from the traditional transit point of cargo to that of warehousing facilities (Ajala, 2001).
The global maritime industry is inclined on the movement of cargo from one port to another. He said that the bulk of world trade owes its success to the efficiency or otherwise of the maritime industry which is arguably the most ancient yet effective means of trade (Autry, 2001). In this global trade, the ports play the most significant roles as the point of entry for cargoes. It will therefore be appropriate to describe the ports as the center point of world trade (Awoletu, 2000)
Nigerian seaports are perhaps one of the very few in the world that are majorly service ports. The port industry has over the year been responsible for over 90% of the physical carriage of Nigeria's external trade (Badejo, 2002).
The importance of this mode of transportation derives not only from its fundamental overriding economics and untapped marketing, but also from the lack of a more efficient alternative to maritime transport in the carriage of the nation's bulky external trade items. Apapa port, which is the focus of this write-up, is Nigeria's most important and largest port. It contains a number of wharfs and ranges of commodities are handled at this port. These include: Wheat, Cement, Oil and Petroleum products, Fish, Dry Cargo and general Containers. Nigeria depends mostly on goods that come through the ports, with this high volume of import and the unnecessary bottlenecks in the clearing process, a lot of goods end up staying longer than necessary at the ports (Awoletu, 2000). This led to a serious congestion of the available space in the ports causing delays even in the discharge of cargo by vessels.
As a result of the above mentioned factors, the government at some point tried decongesting the ports by setting up a committee to look for a possible solution or suggestions to address the problems. The committee came up with a recommendation of establishment of warehouse in some designated places across the country. By this, license given to some companies to establish Private Bonded Terminals came as a big relieve to stakeholders in the maritime industry.
The Private Bonded Terminals were licensed to provide storage facilities for cargoes such that once a vessel berths, the container cargoes are allocated to a Private/Consolidated Terminal Operator to store them while the agents sort out all necessary documentations.
The 100% Physical Examination by the consumer was made easier at the various Private Bonded Terminals. By this all the delays encountered at the port are minimized, if not totally eradicated. The success of the examination regime can be linked to the enabling environment provided by the Private/Consolidated Bonded warehouse operators.
The Private Bonded Terminal operators have displayed the efficiency that private sector initiative in providing services is noted for. The coming up of the Private Bonded Terminals has brought about prompt loading of vessels as such the wastage occasioned by delays are eliminate.
1.1 BACKGROUND INFORMATION OF BONDED WAREHOUSES
The practice of using bonded warehouse in Nigerian Ports as important trade facilitators was not given the desired recognition in Nigeria until the port congestion of the past few years that bedeviled the nation's port.
The port congestion of the year, 2001, particularly in the Nigeria Port Authority (NPA) Container Terminal Port, Apapa posed a serious challenge to the authority, and international image of the country. Port activities in the container Terminal Port increased tremendously as a result of port increase in ship traffic. The Nigeria Ports Authority, annual report (2001) revealed that in 2000 for instance, 416 ships entered the port as against 398 in 1999. Similarly, container traffic recorded 122,821 TEU's as against 110,760 in 1999, representing an increase of 11 percent. Also delivery of containers leaped from 100,977 TEU's in 1999 to 111,053 TEU's in 2000.
This upsurge in business inevitably in block stacking and speedy delivery of containers to importers became a mirage. What later worsened the situation was the presidential directive that in 2001 fiscal year, all imports must come through Nigeria ports. This directive though was for the overall good of the Nigerian economy, but it plunged the port into chaos. Importers became frustrated as it took them several weeks to get delivery of their containers.
The condition also brought the management of the Container Terminal Port and the Nigeria customs service on collision course, blaming each other for the congestion; The more agonizing experience was the refusal of importers and clearing agents to come forward to clear their goods because they use the ports to look for potential buyers of their goods. Reacting to this heart rending problems, European union Ship owners Association threatened to apply some sanctions against Nigeria which included the imposition of 30 percent increase in Terminal Handling Charges because of the port congestion in Nigerian ports.
According to Dayo Ogbodo (2002), he said that the Nigerian Government, however, maintained that the congestion was a temporary one and that if the problem continued, the existing facilities in the Container Terminal Port became over stretched and the port inevitable became a dwelling place for containers rather than a transit point. Felix Esedebe (2002), in his assertion explained that the management of NPA did not hesitate to resolve this by resorting to the use of various satellite Terminal and Consolidated Bonded Warehouses. Some of these were quickly reactivated. Furthermore, NPA collaborated with shipping companies to start utilizing the Kirikiri Lighter Terminals Phase 1 and 2 for containers operation. The shipping companies were MAERSK Nigeria Limited, P & 0 Nedloyd.
The Consolidated bonded warehouses have been of immense benefit in speedy delivery of containers. Gladly, NPA went into joint partnership with some companies in establishing the bonded warehouse such as Mid Maritime, Mitchele Duncan, Sapis (1 and 2), NACFA (1 &2), Port Express, Sifax, Migfo and Denca. Other bonded warehouses operating independently are: Ibeto Group, Brawal, Jeo Ebeoje International Agencies and Luwinco, Cargo Vision. The use of bonded warehouses arrested these monstrous problems.
1.2 STATEMENT OF PROBLEM
Apapa port is faced with the problem of traffic congestion, as a result of predominance use of only road mode of transport system for movement of these cargoes. Indeed, road transport has been increasing its share of transport relative to other modes within Apapa port and its environ and consequently leads to environmental impact of transportation, such as noise and air pollution caused by traffic congestion and increase in Carbon-dioxide (C02) and other vehicle emissions within the port and environment. Again, heavy vehicles used to transport cargo in and out of port are considered to be main source of these problems. These concerns have created pressure to move freight off the roads towards environmental friendly transport system that will have a considerable impact on the design and operation of logistics systems in which intermodal transport plays a significant part.
In the light of this, incessant traffic congestion, awkward parking system of trucks and environmental pollution are part of the hardships occasioned around Apapa port. This is as a result of great intensity of use of road based transport system and inadequate planning of land uses, consequently increases the number of trucks that are loading and unloading at Apapa port.
A significant aspect of the traffic congestion lies in the cost to the average user, particularly the motorists and inhabitants of this area. In the recent study, conducted in most Nigerian cities, the following were computed as the cost of delay: the cost of fuel/h of delay, wear and tear of the vehicle/h and the stress/h. The estimate shows that it costs N 1,200 or ($10) for every 1 h of delay. Assuming there is 3 hrs of congestion per day and there are 22 working days/month, the cost of delay will be about N 950,400 or $7920 in a year. In other words, almost $8000 is the cost of delay per individual in 1 year in Nigerian cities in which Apapa port area is no exemption. Port congestion manifest when all available spaces in a sea port have been taken up by cargoes, so much so that vessels that come berthing, can not discharge their goods, while keeping other ships that should take their places waiting on the channel or high seas.
The proffer solution to the problem will form a basis of analysis of how effective and beneficial the consolidated/bonded warehouse would have in clearance of goods and consignment in our port complex especially the Lagos ports complex.

Ajala A. L, 2001. A paper on Success Factors in Warehousing, presented to Nigeria Ports Authority.
Alan B, 2001 Export Practice Management, 4th edition.
Autry, C. W., Daugherty, P. J. (2003), “Warehouse operations employees: Linking person- organization fit, job satisfaction, and coping responses”, Journal of Business Logistics, Vol.24, No.1, pp. 171-197.
Awoletu S, 2000. Warehousing and Finance Arrangement, Pp 35-42.
Bankole A, 2000. Importance of Warehouses in Transport Operations, Journal of Business Logistics, Vol.16, No.8, Pp 23-26.
Badejo B. A, 2002. Transport of goods by sea. Pp 12-16.
Christopher, M., Towill, D. R. (2002), “Developing Market Specific Supply Chain Strategies”, International Journal of Logistics Management, Vol.13, No.1, pp. 1-14.
Colson, G., Dorigo, F. (2004), “A public warehouse selection support system”, European Journal of Operational Research, Vol.153, No.2, pp. 332-349.
Diana Faber and Contributors, 1997. A paper on Multimodal Transport: Avoiding legal Problems. Pp 76- 99.
Faber, N., de Koster, M. B. M., van de Velde, S. (2002), “Linking warehouse complexity to warehouse planning and control structre”, International Journal of Physical Distribution and Logistics Management, Vol.32, No.5, pp. 381-395.
Moberg, C. R., Speh, T., (2004), “Third-party Warehousing Selection: A Comparision of National and Regional Firms”, Mid-American Journal of Business, Vol.19, No.2, pp. 71- 76.
Nigerian Ports Authority Annual Report, 2001.
Ogamba L, 1999. A paper on Requirements for Operating a Bonded warehouse. Pp 5-17.
Olanrewaju G, 2001. A paper on Warehouse Staff-Customer Relationship, Pp 74-89.
Omole A, 2002. Definition of Bonded Warehouse. Journal of Business Logistics, Vol.23, No.6, pp. 8
Owesenu J, 1997. Evolution of Warehouse in Nigeria, 1st edition, Pp 46- 52.
Rogers, D. S., Daugherty, P. J., Ellinger, A. E. (1996), “The relationship between Information Technology and Warehousing Performance”, Journal of Business Logistics, Vol.32, No.4, pp. 409-421.
Somuyiwa, Adebambo and Dosunmu, 2008. Logistics Infrastructure and Port Development at Apapa Port, Nigeria. Pakistan Journal of Social Sciences 5 (9): 953- 959.
US customs and border protection, 2005. What is a Customs Bonded Warehouse? Department of the Treasury, U.S. Customs Service Washington, D.C. 20229.

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