ABSTRACT

This study was about assessing the procedures involved in the clearance of containerized used vehicles at the Douala seaport, in the Littoral region of Cameroon. The study used customs officials, port authority officials, customs brokers and importers of used vehicles. Primary data was used, which were obtained through questionnaires, interviews and focus groups, a sample size of 60 was employed, purposive sampling technique and a descriptive survey design were applied as well, in order to find the key steps, documentation, role played by parties involved and the challenges faced in the clearance of used vehicles. The results from this study show that the clearing of containerized vehicles at the Douala seaport is still a tedious process, despite all the parties involved. Based on the findings, the study recommended that focus should be placed on establishing robust communication channels between the different stakeholders involved in used vehicle clearance, such as the port authorities, customs officials, customs brokers and commercial car importers. This can be done through implementing advanced communication technologies, such as real-time tracking systems, automated notifications, and digital documentation processes which can make the clearing procedures more efficient, cost-effective and compliant with regulations. From the results obtained, the study further recommended port authorities should develop and implement targeted strategies that focus on identifying and mitigating the contributing factors hindering the efficient process of clearing containerized used vehicles.

CHAPTER 1

GENERAL INTRODUCTION

1.1 Background of the Study

The clearance processes for goods arriving in ports or at border crossings generally involve multi-step declaration, risk analysis, inspection, revenue collection, and release procedures focused in time and space at the point of arrival of a shipment in the destination country (Pomerantz & Topik, 2018). In most countries, existing border clearance models for international good shipments have developed in the context of a trading environment dominated in recent decades by business-to-business (B2B) commercial shipments of bulk, containerized or palletized cargo for further processing or distribution (for example, by retailers) in the country of destination. International trade in goods like vehicles in today’s global economy is largely based on standards set by post-World War II conventions and treaties (Organization for security and co-operation in Europe, 2012). The bulk of today’s international trade takes place in a highly complex environment involving financial, fiscal, legal, logistical, and regulatory aspects, and the movement of a shipment from origin to destination typically involves a multiplicity of commercial and governmental actors who must perform a choreographed sequence of tasks to ensure the shipment’s arrival.

Containerized vehicles, that is both second-handed vehicles and brand-new vehicles from the USA, Germany, Belgium and the UK are all shipped into containers to Cameroon following all the processes and procedures required, automobiles like motorcycles, tractors, trucks, vans, are all imported to the port of offloading in Cameroon. The SGS evaluate second-handed vehicles arriving the port. To import vehicles to Cameroon, you will be required to pay import duties and take care of some necessary documentation. Cameroon import tax is charged based on the FOB (free on board) the value of the vehicle, the rates are applied using the FOB value of cars as stated by KBB.com and some parts of Asia According to the chamber of commerce and sectoral association (2011), Trade undeniably plays a crucial role in bringing about economic development and growth. One of the concerns in clearing procedures is the time spent to clear export/ import goods by complying with the customs regulations and procedures of the country in question, and the concomitant transaction costs associated with such procedures.

A commercial shipment’s clearance in most cases requires submission of declaration data (whether in documentary or electronic form, sometimes well in advance of the shipment’s physical arrival) to the responsible agency, which uses the data provided to determine whether duties, taxes or other fees are payable, whether other mandatory legal requirements apply, whether an inspection is required, and then issues a release for the shipment, which may occur in certain cases conditionally prior to full and final clearance. The efficiency and cost of rapid clearance has been widely recognized as a critical factor for the underlying business drivers of trade, and therefore for trade facilitation generally. The prevailing paradigm of government regulation and management of cross-border trade in goods has been incrementally impacted since the inception of the 21st century by several interrelated factors driving change. Change drivers range from heightened policy concerns about security and safety risks in international supply chains to the increasingly sophisticated use of pre-arrival data collection and IT automation by governments. Innovation in national border clearance processes may also be driven by bilateral and multilateral arrangements, notably the Revised Kyoto Convention (RKC) (WCO, 2006) and the treaties administered by the World Trade Organization (WTO), including the recent WTO Agreement on Trade Facilitation (TFA) (WTO, 2017).

National border clearance policies are further influenced by policy frameworks developed by the World Customs Organization (WCO), such as the Safe Framework of Standards (WCO, 2005) and its associated security-focused documents and updates incorporated into the ‘SAFE Package’ (WCO, 2020a).

While these factors have led to modernization and incremental innovation in the primarily commercial B2B-focused national border clearance processes for cargo over the past two decades, there has only recently been recognition that the rapid emergence of online commerce, especially direct business-to-consumer (B2C) commercial arrangements generating a proliferation of cross-border parcel shipments, presents potentially significant management challenges to the prevailing border clearance processes in place in many countries.

Cameroon is a port state with over nine ports, out of which, only few are operational and the Douala Bonaberi port is the principal one. Containerized vehicles from across the world both second handed and brand new enter Cameroon through the port of Douala. Following all the activities at the port, it is all directing to the smooth transactions by customs authorities for the transportation of vehicles from abroad to be legal in the country. Cameroon custom duties on cars vary according to the condition of the cars. These cars can either be second-handed cars or new cars. The clearance procedure for these cars and the calculation of customs duties rely heavily on the car’s condition. About 90% of the world’s goods are transited by sea. The Importation of vehicles from America to Cameroon varies on the tariff code and the relationship between the two countries. Since Cameroon does not have good equipment to produce cars, they are bound to import them from Europe, America, West Indies and many other countries. This is mostly transported by sea where by the vehicles are put in containers for a better management by the carrier or shipper.

Portuguese explorers were the first Europeans to come to the Port of Douala in the late 15th Century. By the middle 17th Century, immigrants from Africa’s interior had created a town there. It probably got its name from Duala, the name of the ethic group that settled the area. In the 18th Century, it became a focal point for the slave trade known as Cameroons Town. The Port of Douala came under the rule of Germany in 1884 when it was made capital of the German protectorate of Cameroon. In 1907, it was renamed Douala, and it became part of the French colony in 1919. This port was the capital of Cameroon from 1940 to 1946. Modern Douala is a mix of modern, colonial, and traditional architecture. The city grew quickly after World War II, becoming the country’s most populous city today. The modern port of Douala is divided into quarters. While Bonanjo is the commercial and administrative center, Akwa is center to the city’s nightlife. Many French and Lebanese ex-patriots live in the Port of Douala today. The Port of Douala may well have the highest cost of living of all African cities. In 2007, it was ranked as the world’s 24th most expensive city. The Containerized system has been used for years since it is best for the transportation of goods over long distances and duration. Containerization is a system of intermodal freight transport using intermodal containers. Containerization is a method of transporting merchandise in a united form. It permits an intermodal transport system to be evolved, that is one providing a combination of rail, road, carnal and maritime transport (Alan Branch 1988). It is long established, the development of containerization, mechanization improved productivity and working conditions in the shipping business. Containerization process is the best process for movement of goods from one county to another country with safety and security. The containers have standardized dimensions. Although Containerization is an innovation that made its appearance on the world transport scene in the 1960s, it has not ceased to expand and evolve (Brain Slack, John T Starr 1994). A seaport can be defined as a terminal and an area within which ships are loaded with and discharged of cargo. The Douala seaport is a deep seaport of considerable size which was constructed by a German Plantation Company, where several vessels load and discharge (Munge 2019). The city of Douala is the economic capital of the country.

The Douala seaport is not only of critical importance to Cameroon, but its influence spans the entire Central Africa and beyond. The Cameroon Economic Report (2015) indicates that one area that requires an acceleration of reforms is trade facilitation, especially the efficiency of the port of Douala which accounts for at least 95 percent of the goods exported from and imported to Cameroon. The movement of these vehicles is only possible if the goods are properly presented and loaded at the Port of departure and unloaded at the Port of arrival. Njobinkir (2019) stated that the Douala seaport located in the Littoral region handles about 95% of imports and exports for the country as well as some neighboring landlocked countries like Chad, the Central Africa Republic and even the Northern Congo Brazzaville, making it a gateway to these countries and a pole of reference at the heart of the Gulf of Guinea.

1.2 Statement of the Problem

It has been noticed in recent years that there is an increase in the number of companies dealing with the importation and clearing of containerized used vehicles at the Douala seaport. Many freight forwarding companies, transit companies at the Douala port zone have been created to facilitate clearance. Thus, containerization is an emerging activity in the maritime sector in Cameroon. Containerized second-handed vehicles, are cleared in port 5, and new vehicles in the container are cleared in port 1. Containers are often used in transporting used vehicles at the Douala seaport and it is often challenging to clear containerized vehicles upon arrival at the port of Douala, especially for importers doing it for the first time. This is due to the fact that it requires lengthy procedures and the sector is not composed of enough adequately trained personnel, lack of more advanced appropriate technology and other customs officials who are in charge of facilitating clearance procedures.

In the port of Douala, the rapid clearance of containerized used vehicles is more complicated, and has given rise to enormous different administrative documents needed by clients to clear their vehicles as well as the various complicated clearance procedures. Following the identification of these problems, steps were taken to solve the problem by bringing trusted and qualified people involved in the clearing department. Despite the steps taken to solve this problem, the contribution of the Port Authority to increase performance remains low. This is due to the fact that the volume of containerized vehicle shipments handled through the seaport increases rapidly daily, thereby complicating the procedures the more. It is against this back drop that the study seeks to address the following research questions;

1.3 Research Questions

1.3.1 Main Research Question

What are the procedures involved in clearing containerized used vehicles at the Douala seaport?

1.3.2 Specific Research Questions

1. What are the clearing procedures before and after the arrival of containerized used vehicles at the Douala seaport?
2. What is the role played by customs brokers and the customs administration in clearing containerized used vehicles?
3. What are the challenges faced in clearing containerized used vehicles at the port of Douala?

1.4 Research Objectives

1.4.1 Main Objective

To assess the procedures involved in clearing containerized used vehicles at the Douala seaport.

1.4.2 Specific Objectives

1. To investigate the clearing procedures before and after the arrival of containerized used vehicles at the Douala seaport.
2. To investigate the role played by customs brokers and the customs administration in clearing containerized used vehicles at the Douala seaport.
3. To assess the challenges faced in clearing containerized used vehicles at the Douala seaport.