Chief Patrick Nwosu is the Managing Director, Prime Agencies Limited, and a co-founder of Red Star Express. A graduate of Agricultural Economics from the University of Nigeria, Nsukka, Chief Nwosu ventured into freight forwarding after decades of working in the logistics and cargo industry. That was after co-founding one of the leading cargo companies in the country. He opens up to Sunday Sun on what it takes to run a successful freight forwarding business. Excerpts:
Give us a brief introduction about your background
My name is Chief Patrick Nwosu. I graduated from the University of Nigeria, Nsukka in 1979 where I read Agricultural Economics. After my youth service, I went for my masters at the University of Lagos where I read Business Management. That was in 1982.
I did my youth service in Sokoto. In our days, youth service was interesting and probably was satisfying the reasons for which it was set up, say close to 80 per cent. It gives one the opportunity to travel to some places where one ordinarily would not bother about.
That interaction helps a lot of people because it will open your eyes to a lot of things – the behaviour, the culture, etc that exist in other parts of the country. Without that, someone can just stay in his own little space and think that life begins and ends there.
After my masters degree programme, I started work with a private company called RS Cargo Airline. From there I moved over to DHL. I was at DHL for some time before two friends and I founded our own company called Red Star Express. It holds the franchise of Federal Express, which is an American company. Now, the company is quoted on the Nigerian Stock Exchange.
It’s not easy to start a company from the scratch and grow it into a quoted company. The company started business in 1992 and we tackled all the challenges until the business stabilized.
You read Agricultural Economics and Business Management, how come you ended up in the cargo business?
It’s because of the first job I got. And don’t forget, I did business management for my masters.
Give us an idea on how you got your first job…
Actually, I was supposed to work in one of the merchant banks then. I applied there and also at the cargo company. Both companies called me for interview.
Incidentally, the owner of the cargo company wanted me to manage the business for him. The person running the business was a white man and the owner himself, a senior lawyer, didn’t have the time to look into the business very well.
He said since I had background knowledge in business, I should come and help put an eye on the business. That was how I got the job.
Is the person related to you?
Not really. He is from my town, but we are not related. I attended the interview like every other person. It was even after I was employed that I discovered we were from the same town.
So, you started loving cargo business?
Normally, when you finish from school, the first job that comes your way kind of defines the focus for the future; unless you have a preconceived idea of what you want to do. Otherwise, that first job will in most cases decide how you will finally move. That was what happened to me.
Can you tell us more about the Red Star business?
After I left RS, I worked with DHL International and it was from there that we (myself and two other people) founded Red Star Express. I was at Red Star for about 10 years as a director before I resigned from the board. I am still a shareholder in Red Star, but I left so that other people can take care of the business, especially now that it has gone to the stock exchange.
After I left, I gave my full attention to Prime Agencies, which is a freight forwarding business. Prime was incorporated in 1987 when it was registered, but became operational in 1992. It is a clearing and forwarding business.
Clearing and forwarding has undergone a lot of changes from that time and now. There have been a lot of changes in the way the Customs operate and the way those of us called Customs licensed agents operate.
We are called Customs licensed agents. What it means is that you have to get Customs’ authorization before you can operate in the ports; although there have always been young boys and ladies who operate without a license.
But if you want to do freight forwarding right, you have to get the licence. That is the only way you can stand out and expect big organizations to recognize you. If they ask for your licence and you don’t have, they will assume that you are not a serious person.
The business is good and it has so many sections. All you need to do as a new entrant into the business is carve a niche for yourself. Find out which market segment interests you the most.
You mean one cannot do everything?
You cannot do everything because it’s so big. All those traders in the market bring in containers. Some private businesses that do one thing or the other all bring in containers. Governments also bring in containers.
Of course, because you want money, the temptation is there to want to do everything. But you cannot be everywhere. Otherwise, you will mess the business up. You must focus on an aspect of the business you are more interested in or that feels easier for you.
So, which did you specialize in ?
I work with manufacturing companies. It’s easier for me because they tend to have appropriate documents for all their imports. It makes it easier and you have peace of mind when dealing with them.
It’s not like that when you deal with some others who want to cut corners. Of course, you make more money from cutting corners, but the hassle is too much.
You are always running away from the Police, Customs and even the owners of the business will be after you. When they give you N5 and you want to make money from that amount, then you will not deal appropriately with Customs and at the same time, the owner is looking for you asking for his container.
There are a lot of issues, dirty deals in this business which government has been trying to sort out, but because of our love for making quick money, it has been difficult for them to really sort things out.
Sometimes, people pay agents to clear their containers, only to discover later that the containers have vanished from the ports. What usually is the problem?
There are a lot of dirty deals going on there. You can see how quiet my office is. If you step into my office, you will not even know that there is business going on here because we know who we are serving.
But in places where you have those dirty deals (I cannot mention names), you may find the office closed. In some cases, you will find a police man sitting in front of the office so that you don’t walk into the office and see the kind of documents they are working with. Before you go in, the person inside would have taken care of some of the things they don’t want you to see.
Containers vanish for two reasons. If the content of your container is of high value and you go to the wrong clearing agent, it vanishes. Maybe you came to me and I said ‘duty and everything on your container is N3 million, because of what is inside.’ Some people will want to clear their goods for nothing.
You may then decide to meet one of the guys outside who will promise to clear it for N1 million. He will take N1 million from you; knowing fully well that he cannot clear the container with that amount of money. He can even spend the money and abandon your container at the ports. You will be looking for him everywhere, and you will not see him.
On the other hand, the agent, knowing the valuable nature of the container can clear it and sell it to buyers at a very low price. But what also happens is that many trailer drivers are also robbers. Many of the trailer drivers don’t have anything at stake other than they also want quick money.
So, honestly you can clear the container, load it on the trailer for delivery and the drivers will divert it. They will offload the container at night either into a warehouse or another container. By the following day, you can find the lorry and the container somewhere, but the goods are nowhere to be found. And the driver will vanish because he has nothing at stake.
May be the goods inside the container are worth N20 million, he can sell it for less that N5 million. And as far as he is concerned, he has made money. After all, he didn’t invest anything.
Those are major reasons containers vanish at the ports. It is either the agent sells it because he is also a tout (he has nothing to lose) or the driver makes away with the goods inside the container.
But if you give your container to a known agent, no matter what is inside it, nothing will happen to it. I have been in this office for about 15 years. So, if you give me a container and I sell it, where will I run to? You can always reach me.
So what are the licensed agents doing to curtail the activities of agents giving the business a bad image?
Like I said earlier, the industry has undergone a lot of improvements in the recent past. The association is getting stronger and also the government has stepped in. We now have a council that is like a mini parastatal of government that helps to monitor activities in the industry.
Unfortunately, unlike the professional associations where you must have a specific certificate before you can become a member, this one is an all-comers industry. If you are an importer importing so many containers, you can even tell your son to become a clearing agent so that the money will not go to an outsider. That is the reason we have that problem.
It is also because Nigeria is an import-dependent country; a lot of things come into this country. There are some things you will give me to clear and I will refuse. But you will always find somebody who is not doing anything that will be very glad to do that job.
The reforms in the ports are not perfect yet, but there are a lot of changes. In those days, there is a set of people called wharf rats. Those are the ones that will use the cover of darkness to open containers in the ports. They will take what is inside a container and close it back. Now, those things are gradually being stopped.
What is your advice for new comers into the business?
If you want to become a good freight forwarder, you need education. Everything is gradually being computerized and you will need deep knowledge to be able to compete favourably.
Then you must have very good interpersonal skills because it’s a PR business. If you have a container that you imported with your life savings, you cannot just give to someone that you don’t know to clear for you. The business requires a lot of trust. A good agent must know how to engender trust in people so that they will see you as reliable.
Up till now, there are some companies that I have done business with for over five years that I have not met any member of their staff. They still trust me with their containers. I clear them and send them by lorry to them. I send them my invoice and they pay me. I have never seen anybody from those companies till today.
How did you get them to trust you?
It’s through referrals. The people I have worked for referred them to me. It may be they were having problem with the person they were using and then someone whom I have worked for, referred them to me.
Also, a good agent must be a good marketer. You have to be able to market yourself and the services you render.
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