Shipping association kicks against irregular overtime cargo auctions

2026-03-06 - 12:56

By Providence Ayanfeoluwa The Shipping Association of Nigeria (SAN) has faulted the process adopted in auctioning overtime cargoes by the Nigeria Customs Service, urging improved operational coordination between area Commands and the Service’s Headquarters. In a letter dated February 24, 2025, and signed by Boma Alabi, a Senior Advocate of Nigeria and Chairman of SAN, the association called for the formalisation of the overtime cargo framework through properly gazetted regulations under the Nigeria Customs Service Act (NCSA) 2023. The SAN noted that codifying the regime would strengthen legal certainty and boost institutional credibility in the management and disposal of overtime consignments. “SAN members have expressed increasing concern regarding the issuance of so-called ‘Direct Auction Allocation’ letters to private companies and individuals,” the letter read. “We understand that in certain cases, allocations are made at fixed values per consignment (reportedly in the range of NGN 1–2 million), without open or competitive bidding. “This practice appears inconsistent with the fundamental principle that open competitive bidding should constitute the primary method for the disposal of public property, particularly where cargo has been condemned and effectively vested for disposal under government authority. “A non-competitive allocation model raises legitimate concerns regarding transparency and value realization, protection of government revenue and equal access and fairness. Members of the group have also observed that allocations appear, in several instances, to benefit the same group of importers. “This creates systemic risks and perverse incentives, including the possibility that cargo may be deliberately allowed to lapse into ‘overtime’ status in order to be reacquired at significantly reduced values. “Such a framework may inadvertently encourage evasion or reduction of full customs duties and avoidance of terminal handling and shipping agency charges. “SAN respectfully requests clarification as to the legal basis and procedural safeguards governing such direct allocations.” Alabi further explained that the practice “appears inconsistent with the fundamental principle that open competitive bidding should constitute the primary method for the disposal of public property, particularly where cargo has been condemned and effectively vested for disposal under government authority.” “While SAN appreciates the need to prevent fraud and misuse, any process affecting proprietary rights should maintain appropriate levels of transparency and verifiability to avoid disputes, police involvement, and litigation exposure for shipping lines and terminal operators.” The maritime legal luminary also urged that the overtime cargo regime be formalised through Regulations under the NCSA 2023, while disposal of condemned cargo should be conducted through transparent, competitive and auditable mechanisms. She called for a review of revenue-sharing and cost-recovery structures to reflect economic realities, noting that such steps would safeguard government revenue and trade finance integrity. “We would welcome the opportunity for a structured engagement between SAN leadership and the Service to address these issues constructively,” she added.