The Federal Government of Nigeria has announced the deployment of Electronic Cargo Tracking Notes for all Nigerian Ports. The Electronic Cargo Tracking Note (ECTN) is an official loading document or certificate that contains detailed information about cargo and its movement between ports as well as the transit period.1 The ECTN certificate precedes any shipment to a country demanding ECTN before the cargo arrives at the port for clearance through customs or other local authorities. This enables the destination port authorities to have all the necessary information about cargo that is being shipped into the country before the shipments arrive.2 In this article, we will explore the impact the ECTN scheme will have on the maritime industry and international trade in Nigeria.
What led to the introduction of ECTN into International Shipping?
ECTN was introduced into international shipping following the September 11, 2001, terrorist attack in the United States of America. The United States and many other countries across Europe, Asia, the Middle East, and Africa have all implemented the scheme.3
To ensure international uniformity in the implementation of ECTN globally, the International Maritime Organisation (IMO) developed the International Ship and Port Facility Security code (ISPS code) for the safety of ships, ports, seafarers, and governments.4 The ISPS Code which is an amendment to the Safety of Life at Sea (SOLAS) Convention 1974/1988 was implemented by IMO on July 1st, 2004, as a 1mandatory and comprehensive set of measurements for international maritime security by prescribing responsibilities to a government authority, port authority, shipping companies, and seafarers.5 The SOLAS Convention and its amendments have been domesticated in Nigeria by the Merchant Shipping Act 2007 making the ISPS Code applicable in Nigeria.6
The main aims of the ISPS code are as follows:7
- To monitor the activity of people and cargo operation
- To detect the different security threats on board vessels and in port and implement the measure as per the situation
- To provide a security level to the ship and derive various duties and functions at the different security levels
- To establish the respective roles and responsibilities of the contracting governments, agencies, local administrations, and the shipping and port industries
- To build and implement roles and responsibilities for port state officers and on-board officers to tackle maritime security threats at the international level
- To collect data from all over the maritime industry concerning security threats and implement ways to tackle the same
- To ensure the exchange of collected security-related information data with worldwide port and ship owners' network.
- To provide a methodology for security assessment so as to have in place plans and procedures to react to changing security levels
- To find the shortcomings in the ship and port security plans, and measures to
What are the Benefits of ECTN?
According to the Minister of Transportation, the new scheme will tackle several challenges, such as under-declaration, concealment, and wrong classification of important cargo. These challenges are primary causes of revenue leakages, insecurity, and safety issues at the borders. He also noted that the deployment of the Electronic Cargo Tracking Notes in Nigerian Ports is expected to generate between US$90 million - US$235 million annually for the Federal Government.8
ECTN will allow port authorities to monitor the inbound and outbound flow of vessels in real time and allow enough time for port managers to allocate necessary space for docking and equipment for unloading.9 The use of ECTN will also contribute to the reliable auditing of imported goods and reduce the risk of importation of contraband goods into the country.
The scheme is expected to increase speed and transparency in cargo handling and clearance operations in the maritime industry, as well as improve Nigeria's rating in the international maritime community.10
The deployment of ECTN across Nigerian ports is also expected to significantly improve the ease of doing business for shippers and other port users by increasing transparency in cargo handling and clearance operations, as well as preventing undue seizure and detention of cargo by Customs, and other authorities at the ports.
Furthermore, the use of ECTN is expected to allow companies to transport and receive goods on a more precise timeline, thereby preventing cargo theft and reducing operating expenses while transporting goods.11
What are the Documents required for ECTN?
The Nigerian authorities have yet to publish an official list of documents required for ECTN, however, international standards have shown that the following documents may be required.12
- Bill of Lading – A draft copy can be used for the draft.
- Commercial Invoice
- Freight Invoice – Only necessary if the freight cost is not on the commercial invoice.
- Export Customs Declaration – Details required to be matched with all documents if it is not cross trade
What are the required Documents for Exporters?
According to the Nigerian Export Promotion Council, the following documents are required for exporters in Nigeria:13
- NEPC Registration Certificate
- Export contract Document (Sales Contract/Agreement where applicable)
- Quality assurance documents/certificate of Quality, as issued by one or more of the agencies (NAQS, NAFDAC, DVPCS, FPIS, FMITI)
- Nigeria Export Proceed form (NXP)
- Proforma Invoice
- Commercial Invoice
- Final Invoice
- Packing List
- Clean Certificate of Inspection
- Certificate of Weight and Quality
- Certificate of Origin
- Bill of Lading
- Airway Bill
- Road Transport Bill
- Bill of Exit
What are the required Documents for Importers?
According to the Nigerian Ports Authority's Nigerian Ports Process Manual, the following documents are required for importers into Nigeria:14
- E-form "M"
- Proforma Invoice
- Insurance certificate
- Commercial invoice
- Combined certificate of Value and Origin
- Parking list
- Bill of Lading
- Airway Bill
- Way Bill
- Railway Bill
- Regulatory Certificates
- Pre-Arrival Assessment Report
Conclusion
The journey to implement a cargo tracking scheme in Nigeria has been in fits and starts. An attempt was made in 2010 and then again in 2015 but each time there was pushback from stakeholders protesting the additional financial burden on shippers in light of the relative high cost of doing business in Nigerian ports compared to other ports in the region. Another complaint was that the multiplicity of costs on Nigerian imports and exports negatively impacts locally manufactured products and the attraction of foreign direct investment which affects product competitiveness.15
These concerns slowed down the implementation of the scheme, and without legislative backing very little success was achieved. However, now with the Federal Executive Council approval, statutory backing may be on its way as the Nigerian Shippers' Council is preparing for full implementation. Indeed, its time has come and Nigeria is no different from other coastal countries that have adopted the use of cargo tracking notes.
The implementation of the Electronic Cargo Tracking Note Scheme brings the Nigerian Maritime Industry up to speed with international shipping standards and practices. Despite the initial concerns from stakeholders about the scheme, it is clear that shippers and other port users stand to gain some benefits such as the reduction in risk of lost cargo, increased security of cargo and the reduction of delay in cargo clearance. The implementation of the scheme will no doubt improve the reliability and service quality at the ports and ease the process of doing business in Nigeria.
Footnotes
1. Transit period: the total time it takes for goods to get from Point A to Point B, measured in hours and/or days. See Logistics Terms and Definitions.
2. Logistics, U. (2019). CTN (Cargo Tracking Note) Certificate. Universe Logistics.
3. Cargo Tracking Note: Revisiting A Discredited Project. Business and Maritime West Africa.
4. The ISPS Code For Ships - An Essential Quick Guide. Marine Insight.
5. International Maritime Organisation (2020). SOLAS XI-2 and the ISPS Code. Imo.org.
6. Merchant Shipping Act of Nigeria 2007, section 216.
8. FG Approves Cargo Tracking Note for Nigerian Ports, Sets to Generate $235m Annually.
9. Mystarco (2022). ECTN or CTN – The Electronic Cargo Tracking Note. ACS Africa Container Shipping | Specialized logistic solutions provider.
10. Who is Afraid of Cargo Tracking Note? Thisday News Paper 17TH March 2020
11. Electronic Cargo Tracking System and Its Effects on Revenue Realization in East Africa Member Countries Felix Kilonzi, Cyrus Kamau Kanai School Of Business & Economics, MOI University.
12. Nigeria ICTN - The Fastest Global Provider of ICTN.
13. Nigerian Export Promotion Council.- Export documents & procedures.
14. Nigerian Port Authority Port-Process Manual 2020.
15. Ships & Ports. (2015). Customs agents send petition to Buhari, call for scrapping of controversial cargo tracking note - Ships & Ports.
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