‘High Freight Cost Due to Poor Land, Sea Link’

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  • ‘High Freight Cost Due to Poor Land, Sea Link’

Stakeholders in the maritime sector have identified the poor connection between hinterland and major ports as the main cause of high freight charges in Nigeria.

They said this at the maiden edition of the International Association of Ports and Harbours conference held in Abuja between Monday and Wednesday.

While speaking as a member of the panel discussing the challenges of port and hinterland connectivity and the way forward, the Managing Director, APM Terminal, Mr Martin Jacob, who was represented by the General manager of the terminal, Mr Austin Fisher, said if vessels with capacity of over 20,000 TEU (Twenty-Equivalent Unit) berthed at Nigerian ports, the volume would drive down the freight rate.

He said, “If these high capacity vessels call at Nigerian ports, of course this will drive down the freight rate but these vessels cannot call at ports that are not efficient; and ports cannot be efficient without hinterland/port connectivity. The way of getting their cargo to the hinterland is important for vessels and this can reduce the cost.”

He added, “The World Bank has described ports in Tema, Lome and Cotonou as hubs of maritime because of the hinterland connectivity. When the Nigerian ports were on concession 12 years ago, there were lots of benefits to Nigeria; connectivity to the ports was better; freight rates dropped because larger vessels would call at the ports.

“Before the concession, capacity of container vessels that called at the ports was about 1,900 TEU. Today, we have about 4,900 TEUs vessels calling at the Nigerian Ports.”

Jacob noted that currently, shipping companies were building vessels with capacity of 19,000 to 20,000 TEUs.

He said, “The benefits enjoyed by Nigerian ports from the concession are not appreciated by the end user when there is no hinterland connectivity. The ports are not supposed to be warehoused in places where cargo transit is difficult.

“Even when you bring in vessels that have 22,000 TEU to Nigerian ports, the hinterland connectivity is important because although there are about 200 million people in Nigeria, only about 10 per cent of them live in Lagos. The cargoes that come in have to be able to move around the country.”

The Senior Private Sector Specialist, Trade and Regional Integration, World Bank, Olivier Fremond, said that the problem of most ports in Africa could be traced to increase in ownership of vehicles, siting of the ports in metropolitan areas prone to high human and vehicular traffics.

He said some countries in Africa were landlocked and that amounted to high cost and delay while trying to access them from the ports.

According to him, the solution is in establishing parking areas outside the ports.

He said the World Bank was focusing on bridging the infrastructure gap, designing trade and transport facilitation programmes for Lagos, Abidjan, Bamako and other trade corridors, adding that templates of reforms were tailored to specific characteristics of the trade corridor with a view to fixing it.

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.

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