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Why Nigerians prefer ports in Lagos as cargo destination

Tuesday, 22 May 2018 | 00:00

Nigeria as one of the leading maritime destinations in the West African sub-region has six fully developed and active seaports where import cargoes can be destined to from any seaport in the world.

The six ports include Apapa, Lagos; Tin-Can Island, Lagos; Rivers, River State; Onne, River State; Calabar, Cross Rivers and Delta in Delta State.

Out of the six seaports, export cargoes can only be allowed to move from Apapa or Tin-Can Island both in Lagos, making them the only legitimate exit gate for all Nigerian exports irrespective of their origin.

Statistics has shown that despite the nearness of Eastern ports to markets in the North and the East, importers in these locations, have continued to make ports in Lagos their preferred destination for taking delivery of their consignments.

By implication, businesses in cities like Enugu, Aba, Onitsha, Nnewi that take the highest volume of Nigerian-bound containerised cargoes, still travel long distant journey to Lagos to take delivery of their consignments rather than patronising ports that are closer to them.

For this reason, Eastern ports have increasingly become less competitive as against Lagos ports that are currently congested largely due to the growing volume of cargo throughput and over utilised infrastructure.

BusinessDay understands that the rising security threats along the water channels leading to the Eastern ports as well as widening infrastructural gap are the major reasons why Eastern ports are starved of business activities. These result to significant reduction in the number of ships sailing through the Niger-Delta coastline to the ports in that region.

Also, the shallow draught of the water channels leading to some of the ports in the East, limit bigger oceangoing vessels with higher capacity from berthing in those ports.

Further investigations showed that the combined volume of businesses taking place in Calabar port, Rivers port, Onne port and Delta port (all in the East), had become very little at about 25 percent annually while the greater chunk of businesses estimated at about 75 percent, take place in Lagos.

Confirming this, a recent Nigerian Port Statistics released by the Nigerian Bureau of Statistics (NBS), shows that in 2017, a total of 43,019,889 metric tons of cargoes were handled in the six Nigerian ports. Out of the total number, Apapa handled 17,523,313; Tin-Can handled 14,623,239; Rivers handled 2,332,967; Onne handled 1,947,347; Calabar handled 2,078,542 while Delta handled 4,514,481.

Also in 2016, the cargo throughput handled in the six ports totaled 43,381,114 metric tons. A breakdown of this showed that Apapa recorded 17,714,959; Tin-Can recorded 14,384,944; Rivers recorded 2,559,973; Onne recorded 1,665,731; Calabar recorded 2,273,939 while the remaining 4,741,568 metric tons were recorded in Delta Port.

Industry analysts believed that importers take their businesses to the Lagos ports because they are considered more secured. In addition, taking delivery of consignments from Lagos has an added financial implication considering transport fare to come from importers’ base to Lagos as well as the cost of transporting the goods by roads to their warehouses.

“Taking delivery of cargo from Lagos is not only cheaper and more secured, but also faster”, said Tony Anakebe, managing director of Gold-Link Investment Limited, a Lagos based clearing and forwarding company.

The shallow draught of water leading to ports like Calabar, Anakebe stated, restricts bigger vessels with capacity to achieve economy of scale (by hauling huge number of cargo at once), from berthing at some Eastern ports. He also observed that high cost of freight is another reason Eastern seaports are less competitive than Lagos.

For instance, if it cost an average of $2,000 and $3,000 as freight charge on 20 feet and 40 feet containers to come from China to Lagos, it would cost about $4,000 to $6,000 to bring the same sizes of containers from China to any ports in the Eastern Nigeria.

Meanwhile, for the above listed reasons, East-based importers use Lagos ports, and pay extra N300,000 or more to truckers to bring their containers down to their base-state.

From their perspective, foreign shipping liners that call Nigerian ports pointed there is ease of doing business in Lagos ports. This is because ports in Lagos, according to them, are fully developed with good cargo handling equipment that enables efficient operations and faster turnaround time of vessels.

On the other hand, turnaround time of vessels in the Eastern ports is usually longer due to lack of sufficient equipment as well as infrastructure shortfall.

For Lizzie Ovbude, managing director of Ports and Terminal Operator Nigeria Limited (PTOL), an operator of Terminal ‘A’ of Port Harcourt Port, Eastern ports with the exception of Onne, are grossly under-utilised.

She called for uniformity in freight rate on imports for both Lagos and Eastern ports cargo. Lack of uniformity, she noted, has failed to create level playing field for all terminal operators.

On this ground, analysts believed that the Federal Government needs to take decisive action to curb the menace of terrorism and piracy along the Niger-Delta coastline, ensure continuous dredging of the water channel and level the freight on shipment in order to attract more business to the Ports in the East.
Source: Business Day Online

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