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Using Courier Firms To Send Items To Nigeria Is Not Viable Comparatively – DHL As Case Study


Wednesday, February 21, 2018 05.20PM /  Proshare Finance 

Sending a parcel above £100 or any shipment of personal items and clothes to family members and friends, something hitherto deemed a routine relationship between locals and the diaspora to express support, appreciation and a form of strengthening relationships and bonds; now requires a further think through. 

Across the globe the courier services play a major role in managing the diaspora-locals nexus beyond the remittance remit that occupies the public discourse. 

Nigeria is not an exception. Historically, this was a cultural attribute that defined and reinforced relationships. It remains so now but the platforms for deploying same is changing for effective value-for-money engagements.

Over the years, and given changing trends; the diaspora community has matured to such a stage that it created a business model that leveraged the bulk service opportunities that came from having many people use one service provider to ship items to Nigeria as a means of reducing the effective cost to any one person. This was a need-based response to the use of known persons to drop items off which was fraught with many drawbacks, challenges and exposure to liability.

As these “informal shipping entities” grew in relevance and usefulness, some new set of challenges occurred which the community has since responded to in order to sustain the relationship flow for siblings, friends and relatives.

The clamour by established brands to demonize or influence regulation/policy to cripple this emerging option has met with mixed success. The consequence of these developments, reactions and consumer shifts has made it an interesting space for which the new rules are still being ordered.

For those who choose to use the formal courier platforms like DHL Nigeria, the experience so far leaves much to be desired. Too many instances of unknown duty charges at the point of collection has created a distrust for the service and a push factor away from the platform(s).

Thus, the customer that engages firms such as DHL has no choice but to pay additional duty in Nigeria upon receiving the notification from ‘Customs Clearance Section (NG)’.

What you get from this CCS is an estimate as computed by DHL, not the Nigerian Customs Service.

DHL’s customs clearance section prepares an invoice and demands that you pay into its accounts lest it ‘returns’ the goods (
which are still at the customs at this time) which will immediately start attracting demurrage….a “gun to the head’ rule which all recipients in Nigeria must comply with. 

A recent experience of this developments and narratives on and around the service identified two key strands of concern:

1. The originating point in Europe has not perfected its customer service to ‘disclose’ and ‘obtain the consent’ of shippers on charges at point of collection.

2. The absence of clarity on the HS Code due on the charges and direct billing from the relevant agency – Nigerian Customs Service.

For those in the diaspora, if you venture to send items as little as underwear, socks, t-shirt, jeans or any other apparel(s) with a value above £100 (N50,370:00), you are subject to a fee equal to or around
20% duty + 5% VAT Judging by the customs CET Tariff comprising of varying dutiable items with their respective duty rates according to DHL Nigeria. 

Also, according to DHL; demurrage charges has been implemented thus, eight (8) days from the date of the arrival notification, your shipment will start to incur demurrage charges of N43 / Kg, per day and the higher of N2,155.00 daily, if no record of having received the customs duty payment.

In short, you really have no choice but to pay from the date of arrival of the goods or risk losing same or paying in excess of the value of the goods.

DHL and its ilk will have you believe that they are compelled by the Nigerian Customs Law to hand any shipment over to the Nigeria Customs Service 28 days after the duty amount has been advised; a period during which demurrage has been applied, making the goods non-viable in the first place.

The impression has been created that this is a part of Government’s policy to reduce FX usage, increase revenue from customs and ensure that preference for imported goods are discouraged.

Yet, an absence of a clear law and justification of such practices can only deliver three things:
1. Create a rent culture and abuse by the courier companies (who do not provide customers with prior information nor the customs issued bills whichever the case);

2. Drive users to the informal practices they are used to and appear to be fair and equitable; and

3. Operate without proper governance that requires a clear display of the items / amount subject to duty and the applicable laws related thereto.

The challenge this represents is best seen through the social relationship and economic capture prism it represents. Driving citizens underground through regressive laws and practices harms the economy, builds distrust and ultimately harms the development of a e-commerce economy in the country.

It is noteworthy to point out that DHL International offers this advisory on goods purchased online and sent/brought into the country:

Goods Purchased Online for Personal Use

You may be charged customs duties and taxes for something purchased online because:
· Duties and taxes are most typically not included in the price of the goods you purchase online, and might not be included in the overall shipping costs you pay to the online retailer.

· When purchasing goods online, some or all of these goods may not originate in the country you reside in, therefore are subject to a customs duty, which is a tariff or tax imposed on goods when transported across international borders.

· When goods are not shipped domestically (within your country) or within a single customs union, such as the European Union, you are liable to pay any inbound duties and taxes which your local customs authority deems appropriate.

· To ensure the DHL courier can deliver your goods in shortest possible time after entering your country or customs union, DHL pays the customs authority on your behalf for any duties and taxes that are due on the goods.

· Once the duties and taxes are fully repaid to DHL the goods will be delivered to you

· What is payable, if anything, depends on where the goods are sent from, the type of goods, their transactional value and the weight of the package 

The above policy/advisory makes it clear that “Once the duties and taxes are fully repaid to DHL the goods will be delivered to you”. It thus recognised that the cost of delivery by the sender has captured possible duty charges and does not pass the burden to the recipient of the goods. This is especially true where the DHL entity did not bring up for information or consent the existence of an unknown duty further payable. 

As part of our service to the ‘Nigerians in Diaspora’ community, online community in Nigeria and the economy at large, we have formally written to the Comptroller General of the Nigerian Customs Service and the National assembly to seek further information, clarification, intervention and engagement on this development.   

Proshare Nigeria Pvt. Ltd.

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