Naira volatility, inflation pushing up freight rates – SAN

2026-03-17 - 22:44

By Godwin Oritse The Shipping Association of Nigeria (SAN) has attributed the rise in shipping charges and related freight costs to persistent inflationary pressures and the volatility of the Naira against the US dollar and other foreign currencies. Responding to opposition from the National Association of Government Approved Freight Forwarders (NAGAFF) over the recent increase in shipping charges, Chairman of the Shipping Association of Nigeria (SAN), Boma Alabi (SAN), stated that the tariff adjustment approved by the Nigerian Shippers’ Council (NSC) followed a two-year review process. She added that all stakeholders in the shipping value chain were duly consulted before the final approval was granted. In a letter dated March 16, 2026, addressed to Dr. Increase Uche, Chairman of the NAGAFF Trade War Advocacy Committee (NTWAC), Alabi stated that NAGAFF’s opposition stemmed from a lack of awareness of the regulatory process that led to the tariff approval, as well as limited understanding of the operational realities of international liner shipping in Nigeria. She explained that a rigorous regulatory review undertaken by the Nigerian Shippers’ Council and the tariff adjustment in question was not unilaterally implemented by shipping lines, nor was it granted arbitrarily. Part of her reads:”Prior to granting approval, the Nigerian Shippers’ Council, in its capacity as Port Economic Regulator, undertook an extensive review process which included but not limited to Detailed cost analysis submissions by shipping line agencies operating in Nigeria, a comprehensive regulatory assessment of prevailing economic conditions, including inflation, foreign exchange volatility, and operational cost escalations and multiple rounds of review and regulatory scrutiny lasting nearly two years before a final decision was reached. “It is therefore inaccurate to suggest that the approval was granted without due consideration of the statutory regulatory framework. “Indeed, the adjustment approved by the Council merely reflects a partial cost recovery measure, particularly in light of the significant increase in operational costs across the maritime sector over the last several years. “Please also note that after undergoing several rounds of extensive review, the approval was not granted across the board to all shipping lines. The process did not result in a blanket approval for every shipping line. “The Tariff Adjustment is Modest and Already Behind Inflation. It is important to emphasize that the adjustment granted by the Nigerian Shippers Council is modest and significantly below the cumulative inflation rate recorded in Nigeria over the same period. “In practical terms, the adjustment does not represent a real increase in economic terms but rather a limited adjustment intended to partially offset the impact of rising operational costs, including port charges and terminal costs, Administrative and regulatory compliance costs Exchange rate fluctuations, Logistics and operational overheads. “It is also important to note that the adjustment approved by the Nigerian Shippers’ Council reflects a broader reality within the maritime and logistics sector. Across the port value chain, virtually all service providers have reviewed their rates upward over the past few years in response to prevailing economic conditions, including inflation, currency fluctuations, and rising operational costs. “Stakeholders such as truck operators, freight forwarders, clearing agents, terminal operators, and other logistics service providers have all adjusted their service charges during this period. “In this context, it would be unrealistic and inequitable to expect shipping line agencies alone to maintain static rates despite being subject to the same. “The tariff adjustment approved by the Nigerian Shippers’ Council followed a lengthy and rigorous regulatory process spanning nearly two years, during which the Council carefully reviewed cost structures, economic conditions, and stakeholder input. “The adjustment therefore represents a balanced regulatory decision intended to ensure sustainability of maritime services while maintaining fairness within the port economic framework. “Given that the tariff adjustment was approved by the Nigerian Shippers’ Council in its regulatory capacity, the Council would be in the best position to respond to any concerns regarding the approval.”