Apapa Gridlock: Port Users’ Costs Rise by 400%

  • Apapa Gridlock: Port Users’ Costs Rise by 400%

The cost of doing business for port users has risen by 400 per cent and stakeholders have estimated that N1.5bn is being lost daily on transportation, storage charges and container deposits to delays in cargo evacuation at the ports.

Our correspondent gathered from freight forwarders and owners of cargoes that whereas the charge for transporting a 40-foot container from the port to any destination within Lagos was N40,000 a few weeks ago, it had recently gone up to N200,000.

The cost is not the same for containers going outside Lagos, which has increased from about N60,000 to around N300,000.

“The fares have increased because it takes the vehicle owners up to four days to pick up the containers,” the Chairman, National Association of Government Approved Freight Forwarders, Dr. Boniface Aniebonam, told our correspondent.

The NAGAFF Chairman noted that the amount of loss to stakeholders was huge and could not be properly quantified.

According to him, for overtime containers, the storage charge per day is about N15,000, and if one has about 20 containers, the person would be spending 300,000 every day.

He said the situation had been very frustrating for port users.

“There is a huge amount of time lost and time is money. I have pending business at the port but I cannot go there because I cannot climb a motor bike at this stage in my life,” Aniebonam stated.

The Coordinator of the Save Nigeria Freight Forwarders, Mr. Osita Chukwu, said that cargo owners were losing money every day on container deposits as they could not return the containers in time and the deposit was usually deducted every day until the total amount would be forfeited by the shipping companies and the cargo owners would even meet a debit note waiting for them by the time they were able to get into the port.

He stated that the container deposit, which varied from one shipping company to the other, ranged from N200,000 for a container going within Lagos, to N400,000 and N1.2m for containers going outside the state.

Chukwu explained, “When you go to pick up your cargo, you pay a deposit and you are expected to return the container the following day and have your deposit refunded to you; but when you fail to return it, the deposit is deducted on a daily basis; and if you end up spending four or five days on the road, the deposit is deducted and you may end up not getting any refund.

“This is what has been happening to some of us. Some containers stay up to one week on the road and if someone has up to 30 containers, he will lose money on all of them.”

Demurrage charges, which reportedly hit N6.7bn in June, have also continued to increase as the situation goes from bad to worse, stakeholders have said.

The Chairman, International Freight Forwarders Association, PTML Chapter, Mr. Sunday Nnebe, said that on the average, cargo owners were parting with N25,000 per container daily for cargoes trapped at the ports.

According to him, some people bring in about 50 containers at the same time and charges are paid on each of the containers.

Also raising the alarm about the rising costs, the Chairman of the Seaport and Terminal Operators of Nigeria, Dr. Victoria Haastrup, stated that the gridlock had led to congestion as there had been an increase in inward cargo throughput with ships lining up and waiting for weeks to discharge cargoes.

The congestion at the ports, according to her, has resulted in trucks parking on all available streets in Apapa.

She linked the parking of trucks in all available spaces to the July 19 incident when a tanker driver who parked in front of a bank was shot dead by a mobile policeman. Two banks were razed by the irate colleagues of the deceased driver.

Haastrup added that it was the first time in 11 years that Nigeria would be witnessing port congestion of this nature, adding that if the situation was not brought under check, the country would start paying congestion fees.

A sum of $100,000 is said to be the annual congestion fee that the Federal Government paid in the past when the ports witnessed congestion.

Owners of the goods have also said that the cost will be transferred to the final consumers.

“I expect the increase in the costs of these consumer goods to be over 300 per cent,” Nnebe said.

Currently, the cost of goods especially imported cosmetics, clothing items and accessories, have risen by about 100 per cent.

For instance, a pair of female stock trousers that sold for N5,000 last year, now sells for N10,000.

The same was observed for ladies’ jackets, which sold between N4,000 and N5,000 last year, but now going for between N10,000 and N12,000 at the Balogun Market.

Stakeholders urged the government to take practical steps to address the situation, while the road rehabilitation work lasts.

Nnebe said “They should pour gravel on the portions of the roads, especially the roads leading from Mile 2 to Tincan, that are bad so that trucks can pass without falling.

“The refuse removed from the gutters has been heaped on the Tincan road for the past one month, leaving only one lane for motorists. Recently, two containers fell on the road and it is quite difficult to pass at the moment.”

While the Nigerian Ports Authority, which is among those in charge of the road rehabilitation, noted that traffic control officers had been deployed to control traffic along the Apapa-Wharf axis, Haastrup pointed out that the traffic control officers needed to be deployed in large numbers and made to work round the clock if there was to be a change in the situation.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

Be the first to comment on "Apapa Gridlock: Port Users’ Costs Rise by 400%"

Leave a comment

Your email address will not be published.