Clearing Container Cost Rises By 67%, Car Parts’ Cost Jumps – See Reason

Another challenging time that’s facing many Nigerian car parts importers is the spiralling cost of clearing car parts at the nation’s seaport. Since the beginning of the year, the freight charges for clearing car parts have increased by 67 per cent, which has resulted in an increase in the prices of car spare parts. 

Formerly, the cost of clearing car parts at the seaport used to be 600,000 thousand Naira for a 40-foot container of car spare parts, but recently, the price has risen to 1 million Naira for the same size of the consignment. 

According to Ugochukwu Nandi, a member of the National Association of Government Approved Freight Forwarders alleged that the Nigeria Customs Service, instead of generating revenue, was inflicting untold hardship on Nigerians with the ridiculously high price for clearing shipped consignments. 

“For example, if you had a 40-foot container loaded with used motor parts before now, the surface duty was 600,000 thousand Naira. Now, they have given it a benchmark of 1 million Naira at the surface duty level. 

“It’s about 60% higher than what it used to be on the same goods. This is why engine parts are very expensive. Before now, you could get a used engine for around 30 thousand Naira, but you can’t get any engine now, no matter how small it is, for anything less than 100 thousand Naira. And they are doing these things thinking they are generating revenue, but they don’t know that they are making the people poorer.”

Ugochukwu Nnaji further stated that these rates importers pay at the seaport is thereby passed to the customers buying the products. 

Another member of the Association of Nigerian Licensed Customs Agents, Akintonye Ojo, said, “The prices of clearing imported car spare parts have gone up. The commodities in your container and the value are what determine the duty you pay. As a matter of fact, the Customs is increasing their values but they hide under the umbrella of freight charges and also insurance. For old spare parts, you can clear for less than 600 thousand Naira before, but there is no spare parts container you can clear for less than 1.5 million Naira.”

Meanwhile, Geoffrey Nwaosu, the TinCan Island chapter Chairman of the African Association of Professional Freight Forwarders and Logistics of Nigeria, explained that importers now loaded vehicles before putting used spare parts just to reduce the cost of clearing their consignments.

“Before now, it used to be between 600 thousand Naira for surface duty, but it is no longer like that for spare parts. Now, you must pay a surface duty of between 3 million Naira and above for a 40-foot container. 

“You can still pay this and still be battling with alerts since it is coming with Pre-Arrival Assessment Report, PAAR. But it is in two ways. You can load a car or two in the same container. They do this to avoid going to access foreign exchange for PAAR. So, they will add one or two vehicles and clear the cars and the spare parts.”

With the import duty and foreign exchange price rising, spare parts dealers said the cost of their items had risen too. 

Mr John Ibe said several car spare parts had become scarce, also noting that prices of used car spare parts had skyrocketed.

“The prices have gone up because of the hikes in the exchange rate. You can’t even see some of the goods to buy. For example, before now, we used a shock absorber for Toyota Corolla (2003-2006 model) for less than 10 thousand Naira. But now, that same product is 20 thousand Naira, just for the front shocks. There are some that cost up to 70 thousand Naira,” he said. 

Chimaobi Isiugo, a spare parts dealer who deals mostly in car engine control units (car brain box), said spare parts were really very expensive at the moment.

 “Before now, we used to sell brain boxes for 2003-2006 Toyota Corolla at 25 thousand Naira. Now, that same product goes for 40 thousand Naira. A car engine that used to sell for 600 thousand Naira is now 1 million Naira. The ones that sold for 800 thousand Naira are now sold for 1.2 million Naira. This is because the costs of clearing these consignments have gone up. Importers, after spending, will add freight charges to the prices because nobody wants to lose.”

He also added that this import duty does not only affect car spare parts but it also affects car dealers who also have to pay exorbitant fees to import cars into the country.