Nigerian ports, the costliest in West, Central Africa — investigations

Abiola Seun

Nigeria Seaports have the highest shipping freight rates among its contemporary in West and Central African countries, investigation has revealed.

It was however observed that the high freight rate is fuelled by insecurity, outsourcing of security architecture to private security companies who charge foreign shipping companies to safeguard their vessels, high turnaround time of vessel and inefficient cargo evacuation on the port access roads.

However, the above mentioned inefficiencies have reflected in the costs of shipping goods to Nigeria as analysis on overseas cargo and freight costs by MoverDB, an online resource for international shipping, showed.

It showed that the cost of shipping both 20-foot and 40-foot containers to Lagos ports from New York is the most expensive in the world of the 47 major port destinations analysed.

And the high costs are not based solely on distance either. Shipping from New York to Nigeria is nearly double the cost of shipping to South Africa even though Nigeria is closer, by nautical miles, to New York compared to South Africa.

According to the analysis, it takes $2,542 to import a 20ft container from New York to Cape Town in South Africa and $3,795 for a 40ft container while it takes $4,982 and $7,436 for 20ft and 40ft containers into Nigeria ports respectively.

Also, according to icontainers.com, an ocean freight quotes website, shipping from New York to port of Douala, Cameroon takes $3,150 for 20ft container and $3,765 for a 40ft container while New York from Nigeria to neighbouring Cotonou port is charged $2,811 for 20ft and $3,102 for 40ft.

According to the website which has over 250,000 ocean freight quotes and get the latest international shipping rates from any carrier said between $2,811 for 20ft and $3,102 for $40ft container from New York to port of Lome, Togo.

To import a fully loaded 20ft and 40ft container to Ghana Port, Takoradi, importers pay $3,129 for 20ft and $3,659 for 40ft.

However, maritime stakeholders have called for holistic approach which included restoring sanity to the waters and owing vessels so as to negotiate freight with foreign shipping companies.

Speaking, the executive secretary, Nigerian Shippers Council (NSC), Barr Hassan Bello said surcharges slammed on Nigerian bound cargoes by foreign shipping companies are responsible for high freight rate to Nigerian seaports.

According to him, the council is engaging the Global Shippers’ Forum on how surcharges slammed on Nigeria bound cargoes and why the council should be included when arriving at freight rate.

He said, “The high freight rate is because of surcharges. These are abnormal charges carriers always place and this could be bunker adjustment, currency adjustment or security, which is called war risk and many others.

“Unfortunately, we are not being able to determine what these charges are and that is why our engagement with the Global Shippers’ Forum is instructive. We are trying to find out what is happening and I’m sure most of these surcharges are supposed to be temporary because if there is no congestion there is no surcharge.”

“We are about to host the Global shippers Forum in March 2020 where all this issues will be tabled before the foreign shipping companies. There is also the issue of security because when it is reported that there is Piracy on our waters, the carriers will take that as indicator of lack of security so, we have to be very careful here on how we reports attacks but Nigeria shippers Council is fighting these surcharges and at least, the council should be part of the decision making on increasing charges,” he said.

Also speaking, the president, National Association of Government Approved Freight Forwarders (NAGAFF), Increase Uche urged for the establishment of a national carrier for the government to negotiate freight with foreign shipping companies.

According to him, high freight rate is also fuelled by insecurity he also asked the government to stabilise port operation by making necessary infrastructure available.

His words, “high freight rate is caused by insecurity on our waters and because we don’t owe any vessel as a country, because if we have vessels today we can use it to negotiate with other countries that are bringing in cargoes into Nigeria. The freight rate wasn’t as bad as this during the time of the defunct Nigeria National Shipping Line (NNSL), and NUL.

Speaking on Insecurity, he said, “The insecurity is where the multinationals are capitalising. Nigeria is a maritime nation without owing vessels so, why will Nigeria be a maritime nation without owing vessels? if we have our own vessels, it will make us to become more competitive in shipping business and another things is for us to understand the issue that culminate in high shipping cost which has to do with the system in operation because government is yet to stabilise the entire system, ” he said.

Uche also said third party outsourcing of security architecture also fuel high cost of charges.

He said, “There is no need for outsourcing if the Nigerian Maritime Administration and Safety Agency (NIMASA) as the lead agency to provide and regulate shipping and to ensure safety and the Navy is there to help in providing security.

If they know they can do it seamlessly without involving any third party, that will reduce cost of doing business and even freight charges,” he said.