Africa: Lack of dedicated cargo airlines in Nigeria’s aviation sector hampering perishable goods exports – Adewale

cargo

The lack of dedicated cargo airlines in Nigeria’s aviation sector is hampering the exportation of perishable goods which could have earned the country some foreign exchange.

Managing Director/CEO of Mainstream Cargo Limited, Mr Seyi Adewale, in an interview with JULIANA AJAYI published punchng.com says only one operator in the sector, Allied Air attempts to do some bridging but this is not enough.

Please read the full article….

If you were to rate on a scale of 1-10 the air cargo business in Nigeria, what would it be and why?
I will rate the industry 6/10. The reason is that there are high points in some aspects and low points in other aspects within the air cargo value chain. For example, our airport storage regarding temperature sensitive and controlled system for items or commodity is still below standard whereas we do well on air cargo safety and security.

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Every business comes with different challenges. What are the challenges associated with the air cargo business in Nigeria?
Time to move shipment from sterile holding area to
destination is still slow (as per turnaround or duration) to some major destinations such as the United States of America. It takes up to two weeks to move consignment most times. There are no dedicated cargo flights to some of these major destinations and they are only shared with passenger flights.

The plant quarantine office at the airport needs to be upgraded both in terms of infrastructure and ability to start and close every phyto-sanitary certification without going outside the airport area.

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The export shed or warehouses of handling companies needs to be remodeled and expanded. If current location space is no longer feasible for expansion, additional investment on airport land acquisition should be considered.

High and frequent exchange rate changes and fluctuation are major challenge as the Customs exchange rate keeps changing upwards.

Handling companies also need Forex for purchase of new equipment and spare parts. This also affects their operations, cost, handling rates, and tariff to consumers.

What birthed Mainstream Cargo Limited?
Working in a very bureaucratic system of a public limited company appeared to be restrictive to an innovative mind. So I chose to step out and explore my ideas as an entrepreneur and hindsight has proven that this was a wise decision.

Many times, great ideas are needlessly critiqued or too slow to approve and sometimes losing the competitive advantage or edge the idea of innovation offers. However, I recognise that this may be unique to my specific experience.

What lessons did you learn and take from your seven years’ experience in the Nigerian Aviation Handling Company Plc as the Chief Commercial Officer and Ag. Managing Director?
There are many and I can itemise some of them as follows:
Always have an alternative course of action or ‘what if’ at all times.

Think outside the box and don’t always accept regiment or cultures especially when you are in the business or commercial side.

Listen to the tangible parts of your ‘work critique, competitors or adversaries’. They help you a lot to tune many things you plan to do or make it better or improve on it.

Concentrate more on learning and developing yourself within any work system rather than to focus on the monetary aspects or incentives.

Build trust with those you have to either directly report to and those reporting to you. Those reporting to you will go the extra mile to make you achieve your objectives and those superintending over you will give approvals especially if you prove capacity in past and given opportunities.

What is your definition of life and business competition?
Life to me is a battlefield that needs the mind and consciousness of a war general to succeed, perform and ensure a balanced wellness or well-being. Also note that at each step or strata, life has its own peculiar challenges. The more you learn, adapt and overcome, the less you stay on one life strata.

Business competition is very fierce. You must know this. Many will deal with you without an emotional consideration even when they appear to do so. Also note that people play within the rules in business and you must
always be prepared for this. Think, plan and prepare more than your competition.

Where do you see Mainstream Cargo Limited 10 years from now?
Mainstream Cargo Limited will be the leading freight forwarding company and Nigeria Customs Licensed company in Nigeria with an excellent global reputation for excellence, service, innovation and credibility.

What is the demand side for air cargo domestically and internationally?
As at date, the focus is on agricultural and agro-allied exportation. In addition, there are high needs for ‘repair & return cargo’ because there is no local capacity to repair many of the machinery and parts used by the manufacturing sector, mining and aviation sectors as examples.

Importantly, we have a large number of Nigerians in the Diaspora and they have high need for local food and this is also a major factor for agro shipments.

In the reverse order, the countries outside Nigeria target our market due to our population, high need for imported materials, commodities and equipment.

On the technical side, our manufacturing capabilities are still very low as components for telecoms, phones, laptops etc for the Nigerian consumer, textile and beauty products for fashion, spare parts for manufacturing sector, mining and aviation are some of the leading importation to the country as per air cargo.

What are the safety measures adopted in air cargo?
Airlines, handling companies, Federal Airports Authority of Nigeria and many other support businesses are made to have their safety and security programmes that are normally endorsed by the Nigerian Civil Aviation Authority.

This enforces internalised aspects of these procedures through sequenced training and updates. Some of the measures other than this include: Background checks for all airport workers; Rapidscan (X-Ray) machines to reveal all within a cargo; and ETD machines (for nuclear or bomb detection).

How are the in-country limitations on export affecting perishable goods from being moved quickly to the airports?
The challenge is huge. In-country air connections are poor and there are no dedicated air cargo aircraft/ airlines within the country. Only Allied Air attempts to do some bridging but this is not enough. The state governments are trying to bridge these gaps by building cargo airports and warehouses and this should help in the long run. The new drive by new airlines into the domestic market may help as well.

How can the Federal Government step in to make the ground handling space for export to be less restrictive in Nigeria?
A major step is to reduce the taxes and concession charges on Ground Handling Companies. I believe they cannot meet up with the five per cent concession charge and what is the need when if you enforce payment, they will either run at a loss or lay-off staff to mitigate this outflow.

How would you define capacity and efficiency in air cargo?
Moderately good in the short run and adequate in the long run considering rapid changes in the international space through innovation and changes anticipated.

What are the competitive advantages of the air cargo business?
Airlines, handling companies, Federal Airports Authority of Nigeria and many other support businesses are made to have their safety and security programmes that are normally endorsed by Nigerian Civil Aviation Authority.

This enforces internalised aspects of these procedures through sequenced training and updates. Some of the measures other than this include: background checks for all airport workers Rapidscan (X-Ray) Machines to reveal all within a cargo ETD Machines (for nuclear or bomb detection) and physical inspections.

On a financial scale, how would you rate the significance of air cargo to the aviation industry?
The significance of air cargo is not really on the financials but the ‘catalyst’ factor and effect on businesses and the economy. For example, the factory may not operate for days if a major spare part that ought to be urgently replaced is not available.

Is there any contradicting view the public have about air cargo that is not true?
There are aspects of air cargo that they are not conversant with and give wrong perception of the players therein especially the licensed Customs agents or companies. For example, airlines do not normally publish or declare their tariff because of competition and hardly give payment receipts.

The Air Way Bill in many airlines’ opinions is the AWB. This is strange to segments of the public.

What are your reservations about the aviation industry in enhancing a business friendly environment?
Principally, airport charges and tariffs should be looked into by all issuing parties, especially the government. The stress and strain put upon businesses are huge and limit our growth as a nation.

I believe if the government focus more on compliance rather than high tickets or charges, the compliance aspect (such as getting everyone to pay charges than evading payments one way or another) will pay better dividends in the long run than to just concentrate on one aspect of generating revenue by tariff increase.

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