Low cargo volume a time bomb

While the government of Nigeria struggles to reposition the ailing economy, experts are of the view that beyond official grandstanding, theorizing and gobbledygook, the government should make real its promises. It is only when there is food on the table of the common man, when hunger in the land is reduced to barest minimum that the government will sound believable.

Right now there is tension in all sectors of the economy. The Nigeria ports especially in Lagos used to be a beehive of activities. Now it is no longer so. Imports have remained very low because of the restrictive policies of the Central Bank of Nigeria and this is sending shock waves to all sectors of the economy.

At the ports, no importer wants to burn his fingers importing what he cannot sell because of high exchange rate. Clearing agents whose job is mainly cargo movement have been thrown out of job because of little or no cargo to clear. Looking at the number of Nigerians involved in this business, it is obvious that if the trend continues, there will be trouble in the land.

Recently SHIPS&PORTS DAILY reported that following a crash in freight rates, three major shipping lines have withdrawn their vessels and diverted same to other routes in the past four months. The reason given was that due to crashing freight rates, it has become unprofitable for shipping lines to operate along the Asia-West Africa routes.

The shipping firms, Japan’s Nippon Yusen Kasha popularly known as NYK Lines, Taiwan’s Evergreen Line, and Messina Line, were forced to withdraw from the West Africa route due to growing losses as a result of the twin jeopardy of low freight rates and declining volumes. The top Japanese shipping line had operated the Asia-West Africa service, which it dubbed WAX, alongside Hapag-Lloyd and Gold Star Line (GSL).

The report said, “The service featured two calls in Nigeria, Lagos-Apapa and Lagos-Tincan. Evergreen Line has also announced the withdrawal of its vessels from the Asia-West Africa route, which had regular calls at the Lagos Port Complex Apapa. Hull Blyth Nigeria Limited, which acts as shipping agent to Evergreen Line confirmed the withdrawal of the service to the media.

“Managing Director, Hull Blyth, Christian Holm, said: “After three years of serving the market, Evergreen decided to discontinue their service due to losses sustained due to widening disparity between rate levels and costs. Rate levels, especially from Asia, have fallen over 50 per cent in the period with the cost levels remaining disproportionate.”

Chairman, Shipping Association of Nigeria, (SAN) Mr. Val Usifo, described the development as terrible.

He said, “The withdrawal of shipping services by these firms does not affect Nigeria alone but the entire region.

“It is a serious situation; it is not only that the traffic is down; the freight rates have virtually collapsed. Importers are finding it difficult to pay for their imports because of the restriction in dollar.”

Also, private terminal operators, otherwise known as concessionaires, operating at the nation’s seaports are facing difficulties in their operations as the cargo volumes they handle continue to decline. The hardship faced by the operators is compounded by the inability of most of them to procure dollars to meet their hard currency obligation.  The inability of the government to generate the required foreign exchange to oil the wheel of the economy posed a great challenge, reports say.

Also apart from the inability of importers to source foreign exchange to import cargo, power has remained a big challenge at the port.

At the recent tour of calabar port, General Manager, ECM Terminals Ltd, Kingsley Iheanacho, said that the terminal no longer earned revenue from yard operations.

He said that container vessels and clearing agents were not coming to the port.

“Presently, we are having 25 per cent utilisation and that is what Calabar port is all about,” he said, lamenting that the management of the terminal spent a lot of money monthly to maintain equipment.

Recently there were fears among dock workers as unconfirmed reports claimed the Minister of Transportation had given approval to the management of NPA to disengage about 3500 dockworkers. This development threw the ports into restiveness and apprehension as the Maritime Workers Union of Nigeria (MWUN) made it clear that on no account will it accept the sack of the workers or as a consequence the ports will be shut indefinitely. It accused the NPA of a deliberate plan to stop the retention of the Tally Clerks and Onboard security men in favour of the cargo surveyors it (NPA) allegedly brought into the system through the back door.

The truth is that the government has to think out of the box to save the situation on ground.  Nigerians think a little more delay may lead many to crime while creating problems that the government may find difficult to contain.

Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.