Importers are solely bearing the heavy burden orchestrated by the high level of inefficiency in Nigerian ports that will continue to fuel inflation and increase cost of goods. And freight forwarders are worried that in addition to driving ship and cargo traffic to ports in neighbouring countries, Nigerians are being steadily impoverished by the costs, most of which are avoidable.
The gridlock on the access roads to Lagos, the major source of rising port costs, has led to high demurrage charges on containers by shipping companies and terminal operators due to the high turn around time in returning empty containers.
Other factors that have continued to push shipping and port costs higher include:
• high rent of goods paid to terminal operators due to delays caused by traffic gridlock and port inefficiency;
• astronomical increase in the cost of evacuating and transporting laden containers from Lagos ports to other parts of the country; and
• loss of container deposits by importers and freight forwarders due to late return of empty containers.
Also, all associated costs of port inefficiency and cargo backlog, including demurrage arising from industrial actions and work stoppages, are borne by importers and freight forwarders.
In a petition to President Muhammadu Buhari, the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) has called on the federal government to review the template for settlement of port costs and urgently address the difficulty trucks and port users experience in accessing Tin Can Island and Apapa ports as well as the lengthy and cumbersome procedures on the clearance of goods which results to the mounting of cargo back log in Lagos ports.
Calling for a review of the rising costs importers incur, the association urged the government to utilise existing laws and conventions to give importers a fair deal. “In line with the provision of the United Nation Convention on Carriage of goods by sea (Ratification and Enforcement) Act 19 of 2005, carriage of goods, offloading and delivery is the sole responsibility of the shipping companies/ NPA-terminal operators who are conveyer of the goods (carrier/shipping company) and first receiver of the goods(NPA-terminal operators) and finally delivers the goods to the importer to conclude the contract entered into.”
NCMDLCA in the petition signed by its national president, Mr. Lucky Amiwero, called for the transfer of backlog of cargo from the ports to off dock facilities to ease the congestion in Apapa.
According to him, the cost of transporting a 20ft container from Tin Can/Apapa ports to Alaba International Market in Lagos, has increased from N120,000 to N400,000 and 40ft container at the rate of N700,000, from N250,000 previously.
Similarly, the cost of transporting a 20ft container from Tin Can/Apapa to Kaduna has increased from N500,000 to N900,000, while it cost N1 million to transport a 40ft container from N600,000 previously. They also stated that it costs between N1.4 million and N1.5 million to transport a 40ft container from Tin Can/Apapa to Kano also in the North West and Yola in the North East respectively.
For transporting a 20ft container to Onitsha, the commercial nerve centre of the South-east, the cost has risen to N550,000 from N250,000, while that of a 40ft container is now N750,000.
On the cause of the cargo backlog of cargoes, Amiwero said: “The gridlock has assumed an alarming proportion with serious delays running into weeks/ months for trucks to access and exit the ports, which results to, additional cost to transport owners on the number of days the truck stays on the highway before accessing the ports.
“High transport cost from the port of Tin Can Island and Apapa ports, which has increased and sometimes more than the import duty and consumption of container deposit is as a result of keeping the empty containers on the truck for weeks/months. All associated cost of Port inefficiency and cargo back log is paid by only the importer/ licensed customs agents”, the group stated in the petition.