Trading

Nigeria loses $55 million daily to port congestion

Widespread congestion at the Nigerian ports is costing the nation about $55 million (about N20.8 billion) per day, going by the latest report by Dynanmar.

The Dutch consultancy firm said solutions to the persistent congestion at Nigerian ports are multiple and must include a collaborative element.

Dynamar expressed worries that the congestion in Nigerian ports is persistent, but that stakeholders are all busy pointing fingers at others rather than developing solutions.

Senior Shipping Analyst and Consultant at Dynamar, Darron Wadey, said: “This is a very joined-up problem, with no single cause and therefore no single solution. The solution will, therefore, need to be joined-up and tackle all the issues raised.”

The report stated that: “Services have been diverted from Lagos terminals at Tin Can and Apapa to ports as far as 1,500km south of Lagos, in Pointe Noire in the Republic of Congo, with transshipment back to Nigeria.

“Even carriers such as CMA CGM and Maersk Line, who have vessel calls in Lagos ports have diverted cargo, as the delays to ships were approaching 30 days on weekly services.

“The services diverted included CMA CGM’s joint services with Maersk Line, the FEW2 and the Midas/Mesawa from the Middle East to the Indian Subcontinent. Both these services were diverted to Pointe Noire.

“A joint service operated by Arkas, CMA CGM, and Hapag-Lloyd placed two extra vessels on the WAS/EuropeAfrique2/MWX service from the Mediterranean.”

The report added that: “Even these were insufficient to return it to a weekly operation. In addition, the service decided to skip the APMT Apapa facility. Cargo destined for there would be discharged at Tin Can and barged at Hapag-Lloyd’s account, to the Bolloré operated inland KCT Terminal in Lagos.”

According to Wadey, these were the practical consequences of the situation in Nigeria, and there appears to have been little or no improvement this year.

Dynamar believes that the economic consequences of the congestion now exceed $55 million daily, and the situation has increased the cost of inland connections.

“Rates for inland haulage were quoted as perhaps being as high as US$1,100 for a 20’ container, and maybe US$2,700 for a 40’, depending upon final destination,”Dynamar stated.

The report observed complaints at the high level of physical examination of cargoes required, and the fact that consignees or their representatives are required to complete documentation at the port.

In addition, the report points to the state of local infrastructure as another major cause for concern and a significant factor in the ongoing and substantial delay in Nigerian terminal facilities.

It stated: “Ultimately, the solution to the West African congestion problems in Nigeria has to be a combination of the regulatory authorities working with liner operators and terminals, and those authorities that operate customs and other processes to find solutions.

“Without that collaboration, shippers to and from Nigeria will continue to count the cost of major delay to their cargo.” It stated.

 

 

Source: Voice of Nigeria