Activities and services required for the smooth running of international trade can not be complete without recognizing the aspect of clearing and forwarding. It is a result of the continuous thriving of Import and export businesses in the world today. There is no single nation in the whole wild world that is not involved in one international trade or the other today. In the same vein, the clearing and forwarding agents are needed to facilitate the port’s activities as it relates to the passage of the products through every responsible agency of the government.
Clearing and forwarding is a service-oriented business. It serves as the middle segment of import and export businesses that connects the sender(s) of products with the receiver(s). And this eases the stress of every importer/exporter from passing his or her products through the seaports, airports, and through every other port. For better understanding, clearing and forwarding are an intermediary between international business individuals, companies, groups, etc.
APPROVED PORTS FOR CLEARING AND FORWARDING BUSINESS IN NIGERIA
The most suitable business environment for clearing and forwarding business are ports which could be either seaports, airports, or others. It is the responsibility of the clearing and forwarding agents to facilitate the movements of the goods in the ports to the final destination which is the main objective of clearing and forwarding business. The airport space may not be enough to perform the complete activities required in clearing and forwarding business and this makes seaports more suitable for such a line of business.
The ports in Nigeria can as well be classified into cargo-airports and seaports. And this niche focuses on listing the approved locations of the ports available for clearing and forwarding business and they will also be discussed thus;
CARGO AIRPORTS: These are ports through which goods that require transportation by air are cleared and forwarded to the final location. Cargo Airports can further be classified into local and international which will be harnessed as follows;
LIST OF AIRPORTS FOR LOCAL CLEARING AND FORWARDING BUSINESS IN NIGERIA
Available airports for local clearing and forwarding business in Nigeria include;
- Murtala Muhammed Airport 2 (MM2), Ikeja, Lagos.
- Nnamdi Azikiwe International Airport (Local Wing), F.C.T. Abuja.
- Akwa Ibom International Airport, Uyo, Akwa Ibom State.
- Akure Airport, Akure, Ondo State.
- Benin Airport, Benin City, Edo State.
- Ilorin Airport, Ilorin, Kwara State.
- Kaduna Airport, Kaduna State.
- Magaret Ekpo International Airport, Calabar, Cross River State.
- Maiduguri International Airport, Maiduguri, Borno State.
- Makurdi Airport, Markurdi, Benue State.
- Sir Abubakar Tafawa Balewa Airport, Bauchi, Bauchi State.
- Sultan Saddik Abubakar Airport, Sokoto, Sokoto state.
- Warri Airport, Warri, Delta State.
- Yakubu Gowon, Airport, Jos, Plateau State.
- Yola Airport, Yola, Nasarawa State.
- Zaria Airport, Zaria, kaduna State.
LIST OF AIRPORTS FOR INTERNATIONAL CLEARING AND FORWARDING BUSINESS IN NIGERIA
The airports available for international clearing and forwarding business in Nigeria are as follows;
- Murtala Muhammed International Airport, Lagos, Lagos State.
- Nnamdi Azikiwe International Airport, F.C.T. Abuja.
- Akanu Ibiam International Airport, Enugu, Enugu State.
- Mallam Aminu Kano International airport, Kano, Kano State.
- Port Harcourt International Airport, Port Harcourt., Rivers State.
SEAPORTS FOR CLEARING AND FORWARDING BUSINESS IN NIGERIA
Seaports available for clearing and forwarding business in Nigeria may include the following;
- Calabar seaport, Calabar, Cross River State.
- Delta seaport, Delta State.
- Lagos Port complex, Apapa, Lagos state.
- Tin Can Inland Port, Apapa, Lagos State.
- The Delta port: Port of Warri, Sapele, Burutu, petroleum terminals at Escravos, and Forcados are inclusive to The Delta ports.
Subject to the location of these seaports, they are observed to be domiciled in the Southern and South-Western regions of the country. This simply implies that the jurisdiction of clearing and forwarding business in Nigeria seaports will be within the Southern part of the country which may either be South-East, South-West, or South-South.
BENEFITS OF CLEARING AND FORWARDING BUSINESS IN NIGERIA BUSINESS ENVIRONMENT
Majority of importers and exporters do not have the required knowledge of principles and procedures as it relates to clearing and forwarding of their products to the final destination, therefore, they require the services of licensed clearing and forwarding agents. For this reason, you will know that harnessing this business niche (clearing and forwarding) is very important and as well a lucrative venture.
Most of the advantages that can be harnessed through clearing and forwarding business especially in Nigeria business environment may include the following;
- It facilitates the high-income generation
- It connects one with local and international successful business individuals
- It encourages diligence, focused and hardworking
- It facilitates better knowledge as it relates to government policies on business.
- It also enables one to know more about countries (home country and foreign countries).
REQUIREMENTS FOR STARTING CLEARING AND FORWARDING BUSINESS
There are necessary modalities to be put in place before commencing clearing and forwarding business successfully. These will facilitate smooth operation and stability in business if they are well harnessed. They include the followings;
- KNOWLEDGE ACQUISITION
- BUSINESS INCORPORATION
- LICENSE FOR OPERATION
- INITIAL CAPITAL
- BUSINESS VEHICLE
- STORAGE FACILITY
- TECHNOLOGY REQUIREMENTS
For better understanding, the above-listed requirements for successful commencement of clearing and forwarding business will be explained thus;
Just like every other business, necessary knowledge of principles and procedures needs to be acquired as it relates to clearing and forwarding business, especially in the Nigeria business environment. This facilitates successful operation in either the seaports or airports available for the business with no significant hitch. The policy standards governing the business should be known by every potential clearing and forwarding agent as clearly outlined and explained as guidelines by the Nigerian customs service.
Clearing and forwarding agents are the representatives of their business clients and should always have it at the back of their minds to always deliver quality and excellent service in discharging their duties. And this can only be achieved through the application of adequate principles and procedures in the cause of the business. When this is achieved, more clients will be attracted to patronize your business. When more customers are referred to your business, more income will be generated which facilitates the growth of the said business.
Having sound knowledge of clearing and forwarding business is greatly essential if one must succeed in such line of business. In order to acquire this knowledge, every potential clearing and forwarding agent should enroll in clearing and forwarding courses in recognized institutions to equip him or herself with the necessary ideas needed for the business. And there are so many recognized institutions in Nigeria that are focused on training individuals on this line of business at an affordable cost.
Registration of clearing and forwarding business name with the responsible government authority is required. It is an essential aspect of the commencement of the business. In the Nigerian business environment, the Corporate Affairs Commission (CAC) is the main government agency with the legal responsibility of registering new businesses. After securing the business name through registration with the Corporate Affairs Commission (CAC), other documentation and clearance are to be made with the Nigeria customs service. When these are achieved, there will be no hitch in securing a license for operation and it will equally prevent unnecessary delays in the progress of the business which may arise from the security agencies.
LICENSE FOR OPERATION
As seen in every other recognized profession, license to operate as a clearing and forwarding agent in ports is required. And this can be obtained from an appropriate authority. Acquisition of the license enables one to operate without having issues that may arise from the responsible government agencies, business associations, and other regulatory bodies.
Furthermore, clearing and forwarding license certificate facilitates business confidence to the existing customers and potential clients. This is as a result of its great importance and recognition and customers believe that only qualified and certified clearing and forwarding agents can be issued with a license for operation.
Since the inception of a business, start-up capital is a major confidence and morale booster of every potential entrepreneur. This is not different in commencing a clearing and forwarding business. For this reason, a huge amount of capital structure is required by any potential entrepreneur planning to venture into clearing and forwarding business especially in the Nigeria business environment and this will enable him/her to run the business effectively.
Sourcing of the starting capital may seem to be difficult but when it is finally gotten and the business takes off, recovering of the invested sum and making more money becomes easier. This is as a result of the lucrative nature of the business. And when the business generates more money, its funding and stability are sustained.
The majority of the clearing and forwarding agents deal with bulk goods. When these goods are cleared, it is expected that the goods be transported to the storage facility or client’s location. And for this reason, it is essentially required that every potential clearing and forwarding agent must plan to secure at least one vehicle for the sole purpose of moving the cleared goods from the point of clearing to the final locations.
Furthermore, in other to secure more customers and client confidence as a comfortable clearing and forwarding agent to partner with, it is also required that you secure a private vehicle. And this will as well enable you to gain prestige and regard in the presence of your business counterparts. It will equally facilitate easy movements from one location to another as it may relate to business meetings and other engagements.
Just like most of the other businesses, the storage facility is also an essential aspect of clearing and forwarding business. It is part of the pre-requites for issuance of a license for operation. For this reason, every potential investor planning to venture into this line of business should make arrangements for a suitable place in which cleared freights will be stored pending movement to the final location.
The main purpose of making provision for a storage facility in clearing and forwarding business is because of the fact that some goods are not cleared and transported to the final location the same day. When this happens, such goods need to be kept in a safe place pending when it will finally be moved to the client’s or owner’s location. Furthermore, it is paramount that as a clearing and forwarding agent, you are supposed to be security conscious when dealing with customer goods. And those goods should remain in sound condition even inside the storage facility.
In the present world business environment, technology has come to stay as a result of its essential roles and benefits of effective management for the progress of businesses. Different software has been made available in ways that it will suit businesses. As a result of this, it is required that every entrepreneur should look out for the appropriate technological software(s) applicable to his or her business.
In terms of clearing and forwarding business, the same technology has provided software that suits the business line. Therefore, every potential investor planning to venture into this line of business should look out for it and as well plan to apply it on the day to day running of the business for better management.
Furthermore, making use of technological applications aids in facilitating direct communication channels with the clients to the business. This equally builds trust in the business and distinguishes you from other clearing and forwarding agents that are still operating on the phasing-out conventional method.
NIGERIAN GOVERNMENT AGENCIES RESPONSIBLE IN PORTS CLEARING AND FORWARDING ACTIVITIES
There are regulatory agencies of governments that checkmates the goods available for clearing and forwarding in Nigerian ports. They act to ensure that such goods are legal and in conformity with the right standards as provided by the principles and laws of the nation. In order words, they enforce the laws that guild the clearing and forwarding business in Nigerian ports.
Therefore, it is very necessary for every potential clearing and forwarding agents to seek to know these government agencies and their respective responsibilities as it relates to the said business, accept only legalized goods and should always observe the legal procedures in discharging his or her duties. The list of the recognized Nigerian government agencies that operate in Nigerian ports are as follows;
- Nigerian customs service
- Nigerian Drug Law Enforcement Agency (NDLEA)
- Nigerian Police
- Standard Organization of Nigeria (SON)
- Nigerian Agency for Food and Drug Administration and Control NAFDAC)
- Anti-Bomb squad
- State Security Service (SSS) etc.
BASIC REQUIREMENTS AND PROCEDURES FOR CLEARING AND FORWARDING IN NIGERIAN PORTS
In the field of clearing and forwarding especially in the Nigeria business environment, there are detailed procedures as provided by the constituted authorities governing the line of business and they are required to be observed by every clearing and forwarding agent while discharging his or her her legal duties. For the sake of potential investors planning to venture into the said line of business, these procedures will be listed below with brief explanations as it will be applicable to the followings;
- Nigerian Airport Customs Clearing Procedures
- Nigerian Seaport Custom Clearing Procedures
Before transporting goods from one location to another especially in foreign trade line of business, necessary documentations are carried out in order to ensure that due processes are observed. On arrival on Nigerian approved seaports or airports, another documentation process begins before the said goods is being certified for clearing and final release.
MEANING OF CUSTOMS CLEARANCE: This could be referred to as the work process through which necessary documents are prepared and submitted to facilitate import and export in a country. This activity is mostly carried out in country ports. While carrying out customs clearance, it is expected that the information’s provided must be backed up with details to represent the clients during customs examination, payment of duty, and other assessment processes.
In order to achieve a successful clearing process, the following documents are required for proper examination;
1. COMMERCIAL INVOICE: This is a legal document between the supplier of products and customers that provides details that facilitates the sales and purchases transactions at a stipulated amount. This document is one of the major requirements for the computation of customs duties. In other words, it is a necessary document required by customs in order to determine the true value of products for the assessment of duties and taxes. A commercial paper must in addition to other necessary information’s include;
- Buyer and seller identity
- A clear indication of Date and terms of sale
- Quantity, weight or volume of the shipment
- Type of packaging
- Full description of goods
- Unit and the total value of goods
- Insurance, shipping, and other applicable charges.
2. AIR WAYBILL: This is an important document that accompanies goods shipment through international freight carrier that contains full details of the goods and facilitates the tracking of goods while on transit. The content of the air waybill is the 11 digits tracking number, details of the owner of the goods, and details of the freight carrier. This document is one of the most important documents needed for customs clearing purposes.
Furthermore, Air waybill serves as the contract document between the owner of the goods and its carrier. This document is printed in multiple copies for documentation by the parties involved in the shipment.
3. CERTIFICATE OF ORIGIN: This is a document that declares the country in which the product was manufactured. The document contains information regarding the product, the country of export, and its destination. The certificate of origin is of great importance due to the fact that it facilitates the determination of the eligibility of the product for import and to ascertain whether duties are to be paid on the goods.
4. POWER OF ATTORNEY: This is a document that authorizes a clearing and forwarding agent to act on behalf of the owner of the goods. In other words, a power of attorney is a legal document that grants a freight forwarder the authority to act in place of the client.
5. FORM M: This is a mandatory document put in place by the Federal Government of Nigeria and to be processed through the Federal Ministry of Finance (FMF) and Central Bank of Nigeria (CBN), to monitor goods that are imported into the country as well as facilitate import duty payments where applicable.
6. ORIGINAL BILL OF LADING: This is a shipping document or a contract of carriage that serves as the title of the cargo and a shipment receipt. It facilitates confirmation of the carrier’s receipt of the cargo. When an original bill of lading is issued, two other identical original bills of lading are printed and issued together as a single contract of carriage. In order to release the goods and hand it over to the owner upon arrival to the final destination, one of the original bills of lading must be signed by the importer or the agent and must be surrendered to the steamship line.
Furthermore, the shipper may receive payment prior to the release of the originals to the consignee or buyer of the products. In such cases, most importers either prepay or fix credit terms with their suppliers and through this, the release of the shipment is allowed on the express bill. And upon the release of products, the provision of the original bills of lading will be made before the cargo is delivered to the final destination. Finally, there are two ways through which goods can be released with an original bill of lading and it includes;
- With an endorsed original bill of lading and
- With a telex release (A paperless system of communication)
NOTE: Original Bill of Lading is similar to an Air Way Bill and is majorly required for clearing and forwarding of goods that are transported through the high sea.
7. PACKING LIST: This is an important document that details the content, dimensions, and weight of each package or container. It also serves as a document that informs all parties involved with shipping, including transport agencies, government authorities, and customers as it relates to the content of the package. With the aid of this document, the package can be dealt with accordingly. In other words, the parking list can also be referred to as a bill of the parcel, unpacking note, packing slip, delivery docket, delivery list, manifest or customer receipt or shipping list.
8. PRE-ARRIVAL ASSESSMENT REPORT: An approved copy of this report is required for the clearing of goods entering Nigeria provided it is confirmed valid by the Nigerian customs service. Upon reception of the final document, it is required that the commercial bank that opened the Form M will complete online an electronic PAAR consignment form and will submit it to the Nigeria Customs Service (NCS) through the Nigeria Single Window Trade Portal (NSWTP) together with the scanned copies of the final documents.
Finally, some other certificates may be required to be issued to other agencies of government such as NAFDAC, SON NDLEA, SSS, etc., before the goods will be completely cleared and forwarded to the final destination or to the owners.
NIGERIA CUSTOMS SERVICE CLEARING PROCESS
Meeting up with the basic legal requirements enables an agent to act on behalf of his or her client as it relates to the clearing and forwarding of the client’s goods. This process is always seen to be rigorous and as a result of this, many individuals have been stuck in fear of venturing into international trade. As a matter of fact, it is also part of the reasons behind the high rate of unqualified freight forwarders. But it is always necessary to seek the rightful agents to handle your freight for better service delivery.
To every potential clearing and forwarding agent with the interest to venture into the said line of business, it is required that you know exactly what takes place during the clearing and forwarding of goods. Therefore, the Nigerian Customs Service clearing and forwarding process are as follow;
- Physical Examination and Valuation of goods
- Custom Investigation Unit (CIU)
- Payment of Duty
- Provost Marshal
- Release of Goods
- The goods will then be directed to other agencies of governments as listed above for further examination and final release.
HUMAN RESOURCES AND MANAGEMENT
Clearing and forwarding business is not an activity of a single individual. Therefore, it requires the recruitment of qualified individuals to form part of the human capital. The services of the following professionals may be required for effective staffing and they include;
- Freight Forwarder(s)
- Vehicle Driver(s)
- Import and Export Broker(s)
- Freight Monitor(s)
- Warehouse or Store Manager(s)
- Security Personnel(s) etc.
The structure of the management should form part of the initial business plan as it relates to the clearing and forwarding of goods. As the owner of the business, you should always apply all the necessary motivational approaches in order to achieve greater performance from the staff members. Regular monitoring and appraisal of staff performance should be ensured. This will facilitate strict compliance with the detailed principles and procedures as it relates to day to day activities of the staff members.
Every certified clearing and forwarding agent is an entrepreneur. Therefore, good leadership skills should always be applied at every stage of the business such as providing solutions to problems and to manage challenges effectively. In terms of risky situations, stay firmly and seek for an alternative way out. And finally, an efficient channel of communication should be observed.
As seen in every other line of business, clearing and forwarding is a competitive profession. Venturing into this line of business requires commitment, diligence, trustworthiness, efficiency, and focused at every given stage. Efficient management and service delivery to the clients and business partners should always be ensured. Every business has its challenging periods and it is expected that you stay focused and committed in time like this in order to achieve the desired business goals and objectives.