How FG can reduce port congestion in Nigeria – Stakeholders

How FG can reduce port congestion in Nigeria

Stakeholders in the export and import industry, have reeled out solutions that would assist Federal Government reduce congestion at the ports for positive impact on economic activities.

This was contained in a communique issued after the end of the 1st Supply Chain Round Table for 2021 organised by African Centre for Supply Chain, ACSC, with theme, ‘Port Congestion: Implications for Nigeria’s Competitiveness’.

Various speakers at the Roundtable described port congestion in Nigeria as hydra-headed challenge that requires a detailed review, which they came up with multi-faceted solution or strategies to tackle the menace.

Speakers include Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf; Director, Consumer Affairs- Nigeria Shippers Council, Chief Cajethan Agu; Chairman Presidential taskforce on Apapa, Hon Kayode Opeifa; Supply Chain Practitioner, Mrs. Oluyemisi Whyte; and Managing Director, Truck Transit Parks Ltd Managers of Apapa Electronic Call-up System, Mr Jama Onwuaburiri.

At the roundtable members and non-members alike made submissions, which had three keynote speakers and four panelists who diagnosed issues with a view to identifying the causes and making appropriate recommendations.

Some of the burning issues identified include the EndSARS protest of October 2020, which led to backlog of trucks and import laden containers at the Tincan Port.

According to them it caused truck-pricing at the said port to skyrocket, reaching an all-time high of about N1.5 million for movement of 120 Foot Equivalent Unit from Tincan Port to Mile-2, Lagos.

The communique also pointed that the Lagos logistics ring identified as a major port nerve spans through Apapa-Iganmu-Orile-Mile 2-Tincan-Apapa, which houses the two Lagos ports, about 27 tank farms, other off-dock terminals, manufacturing and logistics facilities.

It added that the logistics ring has capacity to handle only 2, 400 trucks and tankers daily, whereas over 7, 000 transverse this ring daily. Additionally, speakers at the round table highlighted two major cost elements at the port namely; financial cost of services and taxes at the port, which include, statutory payments to terminal operators, shipping line, duties and taxes, and the financial cost of accumulated delays, which constitute about 40 per cent of the total cost borne at the port. This was referenced from the fall-out of a recent port consultative council meeting.

According to the communique it was noted that most port officials are not sensitive to the plight of importers as they sometimes delay cargo in an attempt to make the latter part with sums to fast track cargo evacuation. Allegations were made against port officials who handled the manual call-up, as it was observed that they called-up more trucks than the port capacity.

There were also allegations against security officials for corrupt practices. Speakers also raised concern on the impact of barging (RORO) operations on the e-call up system, stating that the system will not capture the trucks that come to the port by barge. Concern was also raised around the increasing number of accidents from barging (RORO) operations.

Meanwhile, the Communique highlighted causes of port congestion in Nigeria, which include Indiscipline amongst truckers, especially around the Lagos logistics ring; Weak technology application; Non-implementation of 24hour port operations; Manual cargo examination my customs; Low capacity utilization by terminals, leading to low inefficiency; Congestion emanating from public holidays, work free days and short working hours; Congestion of trucks within the port; Cargo congestion at terminal due to trade imbalance; Congestion of cargo at storage yards and sheds; Vessel congestion resulting from inadequate port facilities; Too many customs desk and 100 per cent physical examination of goods as against international best practice, which requires the use of scanners; Corrupt officials who delay processes as a way of forcing importers to part with cash; and dishonest importers, clearing agents and corrupt port and security officials

The communique’s observation also showed that some of the implications of congestion at the port on the business environment result to financial cost of accumulated delays which is unfair as these issues do not emanate from the importers who have to bear the brunt of the inefficiencies.

These include high shipping and terminal charges; Higher insurance premium on vessels coming to Nigeria; Cargo rollover; Local industries are not price competitive due to high cost environment; Astronomical increase in transport cost; Increased borrowing cost used for import transactions; Property values plunged around the Apapa environment; Slowdown in evacuation and delivery of cargo, with implications for storage facilities; Paralyses of industrial activities around Apapa; Lower capacity utilization and incessant inventory delays; Loss of customs revenue because of cargo diversion to neighboring countries; High demurrage charges as a result of burdensome clearance process.

High risk of business failure; Discourages private investment in the real sector; Nigeria loses its investment appeal in the global community; Frustrates ease of doing business; Poor ease of doing business ranking; Loss of economic activities to neighboring countries with functional ports; Discourages non-oil export due to spoilage; Negatively impacts GDP by $14.2bn; and it takes an average of 10 to 20plus days to clear a container from Apapa/Tincan ports, and another 10-20plus days move the container out of the port.

However, on the recommendations, the communique reads, “Some of the agreed recommendations reached at the round table; Customs: a.      Strengthen customs’ post audit system, reduce the number of customs desk that importers have to go through or collapse same to two or three, Introduce the use of scanners, evacuation of all over-time cargo from the terminals to create space and enhance terminal efficiency, effective consequence management for corrupt customs officials, dishonest importers and clearing agents, including naming and shaming of violators.

“Nigerian Ports Authority/Nigerian Shippers Council-Reduce the number of MDAs at the port, Enforce return of empties to container holding bays and not to the port, Resumption of 24 hours port operations at all terminals, Regular independent audit of all terminal operators, Enforce adherence to approved standard operating procedures and call-up system, The e-call up system to be extended to all categories of traffic within the Apapa eco-system, not just for trucks alone, The need for constant stakeholder engagement, Regulation of barging operations, especially RORO, which poses a potential threat to the management of trucking activities in the port, Publish daily or weekly freight pricing as a way of eliminating the challenges with middle-men at the port, Shippers council to continue to score terminal operators in terms of process automation and efficiency, Constantly receive inputs from private sector before taking decisions, Fast track the release of Nigerian ports process manual, Fast-track the release of operating manual for barging operations, Relocate tank farms from Apapa axis,Liaise with relevant authorities to fast-track the construction of the road network around the Lagos logistics ring, Export cargo movement to be well defined to reduce losses to exporters, and Implementation of single window platform that will involve the major port agencies for effective clearance of goods.

“Importers/Shippers- Hire only truckers that do not have empties on them, Deal directly with the truck owners and not with middlemen to avoid over-bloated trucking costs, and Be wary of corrupt logistics staff in their employs.”

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