Tanzania: New Shipping Law Still a Concern

Dar es Salaam — Recent amendments to the Tanzania Shipping Agencies Corporation Act, 2017, are still troubling logistics stakeholders, whereby the latest victims being those dealing with ship tallying.

The Act's amendment extended the mandate of the Tanzania Shipping Agencies Corporation (Tasac) into private sector activities.

Towards the end of June 2019, the Parliament endorsed the amendments that enable Tasac to also handle tankers, car carriers, cruise vessels, casual callers, chartered vessels and military ships as agents.

The law has also broadened Tasac's role from a shipping agency to providing clearing and forwarding services in other modes of transport - thereby extending the state-owned agency's mandate to roads, border posts, airports and pipelines.

The amendments were greeted with an outcry from shipping agents whose role will now be restricted to handling container ships.

However, the Tasac managing director, Mr Emmanuel Ndomba, told a press conference in Dar es Salaam recently that Tasac isn't planning to kick private freight forwarders out of business. According to him, Tasac's role is to regulate the industry and increase competition.

Nonetheless, companies dealing with ship tallying complain that the amendments are phasing them out of business - stressing that several firms have already laid off hundreds of staff as a result.

Ship tallying is the computation of the quantity of cargo carried by a shipping line bag by bag, carton by carton and unit by unit during loading, unloading or delivery.

Section 7(1)(c) of the 2017 Shipping Agencies Act declares ship tallying Tasac's exclusive mandate.

Packing Bay Maritime Ltd said it has had to close its ship tallying wing, laying off 25 members of staff since the new law was approved.

"The ship (cargo) tallying section was a major source of income in our company, but I have no option but to close the wing and send home all the employees in that section so that we can remain with only those activities that we are allowed to do in line with the law," the company's chief executive officer, Mr Charles Mazigwa, told The Citizen.

He said though the process of establishing the law was open and participatory, they got it wrong as they hoped that Tasac would simply be the regulator of the sector and not a competitor.

"We took part in the law making pro-cess... We formed a team that came up with recommendations, but most of them were not taken when the law was finally endorsed in the Parliament," he said.

With the law in place, private companies now pay all required fees to Tasac, the corporation, which was established in 2018.

"I paid $490 as operational license fee to Ta-sac, Sh200,000 to the ministry of Industry and Trade as business licence fee and $590 to the Tanzania Ports Authority (TPA) as port entrance fee.

"I also pay tax to the Tanzania Revenue Authority (TRA)," he said.

Dar es Salaam-based Cargo Inspection Service Company said it has so far retrenched 12 employees after closure of the ship tallying section as a direct result of the effects of the new law.

Tasac not new

The Cargo Inspection Service Company company's director, Mr John Kidela, said they have been earning up to Sh100 million as profit from the ship tallying activities, but after the new law, profits are no longer guaranteed.

"This section pays a lot. I know it because I have been here since 2011... It earned us Sh70 million between November 2018 and June 2019, but we had to close it to align our operations with legal requirements," he said.

He said there was no way that private companies could compete with a regulator who doubles as an interested party in the same business.

"I suggest that Tasac should remain as a regulator and observer in the ship/cargo tallying activities," he said.

Nothing new

The Tanzania Association of Port Services Operators (Tapso), however, views the matter differently.

The Tapso chairman, Mr Samia Mpoma, said he found no problem with the new arrangement, saying it was a replication of how things used to be during the days of the now defunct National Shipping Agencies Corporation (Nasaco).

"Tasac is not new... When Nasaco collapsed, its services were replaced by private agencies...

"What the government has done is simply to revive what was there in the past, so I don't see any problem with it," he said.

Tapso, he said, has a total of 45 companies, out of which, eight were directly providing ship tallying services. He said Tapso was formed to bring together policymakers and industry stakeholders to collectively tackle challenges of the logistics and freight industry and foster best practices.

"It plays a crucial role in the logistics sector that allows players to innovate, add value and strategise in order to realise the common objective of making the logistics and freight industry more efficient, sustainable and innovative, and ultimately increase the country's competitiveness in order to attain economic growth and alleviate poverty," he said.

He suggested that the government also decided to change tack after noticing that there were a number of shortfalls in the way some private operators were operating the logistics industry.

He said Tasac's duties did not prohibit private operators, noting that they were free to participate through a commercial tallying section.

"Tallying activities are not carried out by a single person or company. There must be three or four of them. Tasac may have its representatives, but private operators could also have one," he said.

Door still wide open

Teh Tasac chief, Mr Ndomba, said the private companies still had a chance to participate in the ship tallying business.

"It is true that the ship tallying task now belongs to us, but this does not mean that private operators are not allowed to take part. They can still do in-house tallying," he noted.

According to him, in-house tallying happens when an exporter or importer chooses their own persons to witness or engaging in cargo tally activities.

"The ship tallying section has an option of hiring three to four people from different sides at once and we put only one out of them.

"The room is still open for them. But always bear in mind that only cargo tallying which is done by our people will be recognised and considered," he said.

He also refuted the claim that many Tanzanians are losing their jobs, saying Tasac was still holding several employment vacancies.

"We are not going to hire any foreigner for these tasks, so I urge those who have been laid off to apply and we will employ them," he assured.

According to him, Tasac has so far employed at least 150 people and that is in teh last stages of finalising the process of hiring 50 more workers.

In another development, the corporation is now evaluating its performance in comparison with the private operators. The objective is to see how the government lost its revenues.

"The government established this corporation because it knew that things were not right at the port. We are, therefore, making an evaluation to identify the loopholes and plug them," he said.

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