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Extracts from The GIFF Symposium
 
 

SYMPOSIUM ORGANISED BY THE GHANA INSTITUTE OF FREIGHT FORWARDERS (GIFF).

  
     
 

Theme: PRIVATE SECTOR PARTICIPATION IN ECONOMIC GROWTH:
"THE FREIGHT FORWARDERS ROLE"

  
     
 

LA PALM ROYAL BEACH HOTEL, OCTOBER 12, 2006.
Statement by the Chairman, Dr. J.L.S Abbey, Executive Director, Centre for Policy Analysis (CEPA), Accra.
 

  
     
  Before, making my remarks, I would like to thank Mrs. Bernice Asempa for her kind remarks about me, and to thank the Management and the entire membership of the Ghana Institute of Freight Forwarders for the confidence they have reposed me in. When I got the invitation to do this, I recalled the various interactions we at CEPA had with the Institute when we organized a Trade Facilitation Workshop almost one year ago, and I do recall the interesting interventions that members of the Institute made, interventions- which I should say immensely enriched the quality of our deliberations and educated some of us regarding the vital role that the freight forwarding community plays in the national economy. Please allow me to thank you all for your spontaneous-acceptance of our invitation to participate in the Workshop and for the knowledge that you so generously transmitted to some of us.
Distinguished Guests, ladies and gentlemen, as you may be aware, as a result of some breathtaking changes in manufacturing concepts such as global componentary (the manufacture of different components at different locations for assembly at one location) and the integration of manufacturing and distribution activities as in the just-in-time concept, transportation has now become an integral part of the production line.
Consequently a country's and for that matter a firm's export competitiveness is now no longer dependent solely on its production capabilities but also increasingly, such export competitiveness is a result of that country's and/or firm's ability to consign-goods to/from - the market place, be it domestic or international, at the lowest possible cost. The Freight Forwarder being an architect of a country's international tradeways therefore plays an important role in the control of such costs.
Over the past several years various studies have shown that, on the average, transportation costs account for about 20% of the price of goods originating from developing countries. In some instances such as exports from land locked countries this percentage is considerably higher.
Freight-Forwarders deal with the national and international movement of goods by assessing the most efficient and cost effective way of doing so. Ghana's export competitiveness therefore would depend to a large extent on an efficient and effective freight forwarding Industry. - It is also appropriate for us to remember constantly that supply and logistics chain management has now become an important determinant of the competitive advantage of international trading companies in the global market. As a result sophisticated facilities
and services are being offered in freight forwarding to meet the growing emphasis on quality in products and related services, including just- in- time delivery of goods worldwide.
Against the backdrop of the Government's stated vision and strategy of making the country an economic gateway to West Africa, it is compelling that Ghana should strive to be at the forefront of developments in, the entire logistics continuum paradigm (manufacturing, warehousing, transportation and distribution).
Distinguished Guests, let me state the obvious reason for this gathering for emphasis. The GIFF believes that it has an important role in the country's international trade. It is in this respect that through regular events such as this symposium, GIFF, acting in concert with the other stakeholders, hopes to play its modest role towards the attainment of the vision, which the country has set itself to pursue.
It is my sincere hope that this symposium will be able to come out with policy options that would point policy makers in that direction. , , ,
It is now my singular honour, Distinguished Ladies and Gentlemen, to declare this Symposium open and would like to call on the President of the Ghana Institute of Freight Forwarders, Mr. Robert Kutin Jnr. to welcome the participants to the event.

I thank you all for your kind attention.

 		  
     
 

Presentation By Mr Wilberforce Addae - Chairman, Tema District

  
 



Introduction
Who is a freight forwarder?
Strangely the words "Freight Forwarding" appears to be a new terminology to many Ghanaians~~ Introduce yourself as a freight forwarder to somebody and you are met with a blank expression on his face which is a signal that you need to explain further what exactly the term means.

Freight forwarding is one of the oldest and well orchestrated professions in history.
When King Solomon decided to build the temple for the Lord in Jerusalem he was faced with the task of moving large volumes of materials from different parts of the world to the project site. He ordered 25,000 pieces of Cedar logs, 400,000 litres of olive oil from Lebanon, 18000 pine logs from Tyre, 2000 tonnes of wheat and a large quantity of bronze and other materials from different parts. Listen to the message sent to him by King Hiram of Tyre " I have received your message (now we will say email) and I am ready to supply the cedar and pine logs as you requested. My men will bring the logs down from Lebanon to the sea and will tie them together in rafts to float them down the coast to the place of your choice. There my men will untie them and hand them over to your men to take charge" (I-Kings-5-:-9)-The-planning and-execution-of the-freight forwarding aspect of this project was amazing.

Freight forwarding involves such activities as moving goods both locally and internationally, sea land and air freighting, customs brokerage, warehousing, packaging; cargo consolidation, haulage, non vessel operating carrier, supply chain management and other logistics associated .with the efficient relocation of goods to centres of demand. . .

In Ghana, however, freight forwarders are loosely referred to as clearing agents. This is so because most practitioners simply undertake and limit their scope of involvement in freight forwarding to a small aspec'a which deals only with customs clearance of goods for import and export. The point being made is that a freight forwarder worth the name does far more than simply clearing goods, Indeed as a result of increased fragmentation of global production processes (ie the production of various components in different parts of the world and assembling at one place) as well as the integration of manufacturing and distribution activities, transportation of those components to centres of demand has become an integral part of the production line.

Example: A dealer in cars located in Ghana orders 500 cars from a car manufacturer in Japan. In putting, the various parts together the Japan manufacturer in turn orders the windscreens from say Singapore, the ignition key components from the UK, the tyre rims from Norway, the battery from India etc. To get all these assembled just in time- to be able to put the cars together just in time to beat, the deadline the manufacturer relies on the freight forwarder to advise the fastest, the most reliable and the m.ost cost effective way of moving the goods from different parts of the world. The. freight forwarder is familiar with export regulations, documents connected with foreign trade, import rules and regulations of destination and foreign countries and the ' methods of shipping.

Training and Education
In an effort to improve the quality of service rendered by freight forwarders and to provide an educational background of international standard to those who are desirous of pursuing carriers in freight forwarding, GIFF, in collaboration with FIATA (International Federation of Freight Forwarders Associations) and with the active support of EDIF; has embarked on an ambitious tertiary level educational programme leading to the award of Diploma in Freight Forwarding. Currently 80 students with various backgrounds, in education and experience are taking part in the course. It is gratifying to note that CEPS has declared its full recognition and support for the course and is willing to provide the resource personnel to handle certain aspects of the course.
Services
During the initial planning phases of exporting or importing The forwarder helps to decide:

Which carriers to use
Best days of the week to: ship
The best route
The most economical shipment size

At the beginning, of a sale, we can provide the exporter with a quotation on:
• Freight costs -
• Port charges
• Cost of special documentation
• Insurance costs - -

This information can be used by the shipper in the,preparation of an accurate price quotation to foreign customers. At the shipper's request the. freight forwarder can make the actual arrangements and provide the-necessary services for expediting the shipment.to its overseas destination. These include:

• Booking space with the carrier
• Completing export documentation
• Arranging for cargo insurance
• Advising on foreign import regulations
• Arranging for products packed and containerized at exporter's request

Some freight forwarders are freight consolidators and act as Non-Vessel Operating Common Carriers (NVOCC). They book space on ships in large quantities at lower rates and sell space to shippers in smaller amounts. NVOCCs consolidate small shipments into container loads that move under one bill of lading More favorable rates are passed on to the-shipper and therefore-smaller-shippers with less than containerload (LCL) shipments can take advantage of the lower costs associated with being a big shipper. .
Tasks and Duties of a modern day freight forwarder He.

• Finds the most appropriate and cost effective way of moving goods
• Prepares goods for dispatch
• Communicates with carrirers such as road, rail, air and sea companies
• Books transport cargo space and prepare quotations and invoices: w
• Confirms transport arrangements
• Liaise with international freight forwarders to arrange pick up and delivery of goods
• Checks incoming goods against documentation
• Clears goods through customs
• Organizes delivery of goods-for export or to an importer's premises.

Skills .

Freight Forwarders are trained to have
Excellent customer skills
• GCNet documentation skills
• Communication skills
• Problem': solving skills
• Record keeping skills
• Basic computer skills

Freight forwarders need to know of

CEPS rules and regulations
Tariff structures applicable
international laws and standards regarding transport of goods Shipping terms and United Nations port codes
Methods of packing and stowage of goods
Carriage of goods, including dangerous goods regulations

A brief background of (GIFF)

The institute started as National Association of Customs House Agents (NACHA) in 1978 and remained so,until 1990 when the members adopted a resolution to form the Ghana Institute of Freight Forwarders. This became-necessary because NAGHA as the name implies did not reflect the true services, as enumerated above, rendered by our members.

How do the activities of the freight forwarder enhance economic growth?

Looking at the activities of freight forwarders mentioned above it is clear that that freight forwarding impacts significantly on trade. Trade, as we know promotes growth and employment, employment promotes wealth and weaith eradicates poverty. Freight forwarding represents; promotes and protects the interest of the industry; In the Gateway Project that Ghana has embarked on for some years now which is aimed at improving Ghana's economic growth and to generate employment as well as to stimulate local private sector growth, the role of the freight forwarder in achieving these objectives are glaring.

it is an established fact that CEPS generates around 70% of national revenue through duties and other levies collected at Ghana's points of entry or exit. It is worth noting that almost all the revenue collected by CEPS is routed through the freight forwarder. Never mind that freight forwarders are always left out- of any acknowledgment or appreciation of success chalked by CEPS, in revenue collection. When bonuses are given out to customs for exceeding a particular year's revenue target nobody remembers to even mention the role played by the freight forwarder. Not that we want some of the bonus but appreciation is in itself an incentive.

Bad Nuts

Mr Chairman, permit me to mention that as is peculiar to all service providers, freight forwarders sometimes-find--themselves in a dilemma when tempted by juicy rewards to engage in activities that might be dishonest or against public interest. We admit that there have been cases where some unscrupulous practitioners of the profession, in active collaboration with customs officers, GHAPOHA and Shipping Line staff, do unacceptable things which lead to revenue leakage. The Ghana Institute of Freight Forwarders is deeply disturbed about the behaviour of such misguided self-seekers most of whom are pretenders with with hidden agenda who parade themselves as freight forwarders or clearing agents without the requisite .background. The sole aim of this shameless group of people is to abuse the system. Ghana Institute of Freight Forwarders is doing everything within its powers to flush this group out as their activities do a lot of damage to our image.

Because of the economic importance of international trade, legislation has been used to control a country's external trade activities. Consequently the freight forwarding industry, being one of the major frontline sectors -in Ghana's international trade support structure, the law must be used to control this group of professionals too. Thus the Ghana Institute of freight forwarders, having now become a professional body, is by law required to operate under a set of guidelines known as professional code of ethics. GIFF's code of ethics spells out standards that must be followed in all aspects of operations and sets the level.of competence appropriate to required industry standards to. ensure that the Ghanaian freight forwarder carries out his responsibilities with integrity and in a conscientious and . diligent manner.

Avoid bad agents
Since goods of high value and importance are entrusted to the care of a freight forwarder, it makes sense to deal-with credible freight ' forwarders to avoid unpleasant situations and consequencies. But how does one differentiate between the two?

• Get to know the offic,e from which your agent is operating.
• Check the background of the person. Does he belong to GIFF? You may check the company's bona fides from the GIFF secretariat.
• Be interested in your agent's track record. Make an effort to contact one or two of his current clients to check on his reliability and competence.
• Never enter into a hasty contract with an agent just because he offers lower service rates. ,
• Never trust an agent who promises to negotiate lower duty on -a
given cargo with customs. _ _
• Always present genuine invoices. Do not rely on the agent to prepare an invoice locally.

Conclusion
Mr. Chairman, through the efforts of some pioneers-and stalwarts we are proud to say that freight forwarding has come a long way in Ghana in spite of the. frustrations and extreme difficult circumstances which characterize our day to day activities. Nevertheless the freight forwarder is always on the move to keep industry moving, goods moving and the economy moving, We call on the other stakeholders in. the supply chain as well as the general public. to give us the necessary support and encouragement.
Thank you for your attention.