By Ade Jacobs
Freighting a container-laden truck from Nigeria’s two major seaports in Lagos, to any location within the city, costs as much as shipping a container from China, the Financial Times (FT) has said in a report.
The transportation cost in the nation’s seaports, the London based publication said, has become too expensive, that importers have now abandoned them for the Lome Seaport in Togo, to cut cost.
According to the FT report, it now costs more than $4,000 to transport a container from the two seaports in Apapa to any destination in Lagos for instance, adding that the situation is worsened by traffic congestion in the state, which made container laden trucks to be trapped in traffic for weeks.
FT claims in the report that the cost of transporting a container from the Apapa and Tin can ports in Lagos is the same as shipping a container from China, a distance of over 12,000 nautical miles, noting that Nigeria has lost its former status as the shipping hub in the region to countries such as Togo, Ghana and Cote D’ivoire, which have capitalised on the situation in the country to develop and make their seaports attractive.
The report said: “The average spot rate this year to ship a 20ft container from Shanghai to Lagos is about $3,000, according to Shanghai Containerised Freight Index data provided by Dutch shipping consultancy, Dynamar, the equivalent of about $3,750 to $4,000 for a 40ft container.
“The current spot rate is $5,000. Cargo ships often wait more than a month off the coast before they can offload their goods in the port — roughly how long some spend in transit to Lagos from China. Increased congestion at the end of the year has pushed prices for the transport of goods to the mainland higher.
The report further explained that multiple charges by various government agencies and shipping companies have exacerbated the problems at the nation’s seaports, apart from lack of automation and ageing port infrastructure.
“Rather than pay lower rates for a truck that could take several weeks to enter the port, while accruing costly terminal container storage charges, the report said, “most importers opt to pay spot prices to fleet operators, which charge N1.5m ($3,953) to drive a 40ft container from Tin Can to warehouses within Lagos, according to senior executives at logistics firms.
“Apapa is cheaper at the moment, with current rates up to N700,000, in part because it is thought to be a better run. That figure includes road access charges and bribes but does not include terminal or storage charges at the port, general costs — which can run into the tens of thousands of dollars — associated with ships parked at sea or money extorted by criminals and officials while trucks wait days in traffic jams.
“The port congestion is caused by ageing infrastructure, meagre rail transport that forces 90 per cent of cargo to go by road and an almost complete lack of automation, which means every container must be physically inspected by customs officials. It has been compounded by increased sea traffic since the closure of the country’s land borders to combat smuggling last year.
Meanwhile, the Governor of Lagos State, Babajide Sanwo-Olu, said his government will take over Apapa traffic management from the Presidential Task Force, in order to restore sanity to the area. The governor disclosed this on Monday, during a fact finding mission to end the traffic congestion in Apapa and environs.