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The trials of shipping into Lagos

May 08, 2019
Steve Jordan talks to Kehinde Arowoselu from Koeman Nigeria Ltd about the difficulties of shipping into Lagos and the alternatives that should be considered.

Congestion on the road to the terminal in LagosAnyone who has ever had the pleasure of shipping to Nigeria will know that it’s a place that has its difficulties.  For decades the main port of Lagos has been plagued by delays caused by a lack of infrastructure, strikes, corruption and poor communications.  But few would be aware of just how bad things are.  In this story The Mover interviewed Kehinde Arowoselu from Koeman Nigeria Ltd to find out.

Nigeria is a country that relies heavily on imports.  In 2018, imports increased by around 48% to US$2.5billion, 80% of which makes its way into the country through the Lagos terminals at Apapa and Tin Can Island. According to Kehinde, the terminals are woefully ill equipped to service the demand.

Kehinde Arowoselu“The port is inadequate,” he said, “both at the terminals and the quayside. This is largely self-inflicted because most of the terminals have been handed over to private companies to operate.”  Kehinde said that they lack the facilities and the equipment effectively to operate the ports. “There is not enough lifting equipment for containers to discharge from the quayside, not enough trucks to move the containers to the terminals, and then the terminals themselves are so crowded. You can have 10,000 TEUs in a terminal and just one piece of equipment working to position them for inspections and deliveries.  If that piece of equipment fails during operations they are scrambling for the engineers to fix it, and that could take all day.”

This, of course, causes congestion – but there’s much more to cause delays than just the port operations. The infrastructure surrounding the port is in disrepair. “There are huge potholes in the roads that can swallow a family car,” said Kehinde, “they are massive. There is so much neglect from the government, which is a tragedy.”  To be fair, the government is trying to make improvements, but the construction works on the roads only makes the problem worse. “This is a major issue.  Huge sections are blocked off.”

The result is a port that doesn’t work, at least not in any practical sense.  This means that the delays incurred trying to retrieve a container from the port and then return the empty are horrendous. “You can be ready with your paperwork and have paid the charges, but vehicles have to wait in line for up to two weeks just to get the container out of the port,” said Kehinde. “It’s the same on the way back. Meanwhile the shipping company keeps collecting demurrage and the charges on the empty container while we are trying to return it. We have to pay for every day (per diem) and pay for the truck and driver.” This cost is even higher if the moving company is using hired transport that will charge detention while the truck and driver are employed. The congestion at sea, outside the port, can also drive steamship lines to take drastic action such as unloading at a neighbouring country such as through the port of Cotonou in neighbouring Benin.

And so, the costs accrue.  According to Kehinde the total cost when importing a container through Lagos, for demurrage, detention and per diem charges, can amount to around US$3,000.   There has to be an answer.  There is.

Kehinde says that if a consignment’s final destination is outside Lagos, agents should consign the cargo to one of the ports in Eastern Nigeria, Port Harcourt or Onne.  Here clearing time is much faster, maybe four working days, and so the costs are much lower, typically US$400 per TEU.  The ocean freight is likely to be higher to these ports but, overall, the costs will be lower.  “It will also help to keep your customers happy,” he said.

Finally, there is the option of air freight.  For most destinations the bar is set quite low when choosing between air freight and ocean freight when considering cost only.  However, in Nigeria the bar may need to be set a little higher. The country has nine international airports and anyone sending consignments of less than 1,000kg should seriously consider this as an option.  Freight costs are higher but, when customer service matters and deadlines need to be met, it may be the best option.

Photo: Kehinde Arowoselu, Koeman Nigeria Ltd

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