Why NPA tariff slash can’t save Eastern Ports

In a statement signed at the time, NPA had specifically listed  the vessels types that would benefit from the new tariff.They are; Container vessels with at least 250 TEUs; general cargo vessels with at least 16,000 MT, Vessels with at least 16,000 MT and RORO Vessels with at least 250 units of Vehicles.

Initially when the NPA announced the 10% rebate, maritime industry stakeholders were divided about the move, some actually commended NPA, hoping that the eastern ports would begin to experience boom, while others condemned the move, saying that NPA does not have a grasp of the situation.Mrs. Obiageli Obi, Director-General of Nigerian Chamber of Shipping described the measure as an excellent policy that would encourage patronage of the Eastern Ports and help to address the perennial gridlock at the Apapa port.

According to her, about 80 per cent of the cargoes that will call at the ports located in that zone will end up in markets around the area anyway.

But two months after the NPA made this move, importers are still skeptical of routing their cargoes through the ports in the east.

It seems to be dawning on all operators now that the Eastern Ports may never be viable again except the Federal Government take some drastic steps and deliberately bring up polices to bring the ports to life.

Speaking with Nigeriamaritime360.com, President of Shippers Association Lagos State (SALS) Rev Jonathan Nicole argued that the NPA  has failed to address the real issues challenging the eastern port.

In his words, he said “There are many other things involved in the Eastern Ports, first of all you have to look at the security situation, the only place that I think is fairly manageable is Onne Port, but then it is very expensive to clear goods”

“Port Harcourt port is not too bad, but cost of bringing in goods from port Harcourt is also high, to truck the goods from Port Harcourt to Aba where we have the market, there are several security checks on the road and it is hopelessly bad”

“So, it is easier to bring goods from Lagos to Aba or to Onitsha than from Port Harcourt to Onitsha and to Aba. Before you leave Port Harcourt, first of all the local people will harass you and you can’t do without parting with money, some of them really go violent, they claim to own the Federal road, to avoid all these drama, you would prefer to send your goods Lagos because of the cost of clearing, though the transportation is high, but you would have peace of mind than in Port Harcourt”

“Much as we canvass that Eastern cargoes should go to Port Harcourt, Warri, Calabar ports, federal has a lot to do by removing the bottlenecks on the highway, because its like they just opened the whole place up for security agents to liter the whole road, some of them are illegal” he said

While giving reasons why the traffic gridlock may never totally be removed from Lagos ports, Nicole argued that apart from the insecurity in the east, importers feel that as soon as they clear their goods from Lagos, they have the market at Mile 2, Balogun, Trade Fair, Alaba market and so on.

He said that the 10% that NPA is giving as a rebate is peanut, compared to what Shippers face with Nigeria Customs Service.

“The 10% would be swallowed up by Customs alone. If 10% is given as rebate on cost of shipping and terminal operator, then it does not make any difference”

“The Federal Government should tackle all these challenges, and in addition they should reduce the Customs duties, they have a lot to do, it is when they have more cargo that they would have more money, they have to make sure the security is okay, they have to remove the checkpoints both authorised and unauthorised” he said

Also speaking,  Chief Increase Uche, President of National Association of Government Approved Freight Forwarders (NAGAFF) argued that out of the six ports in Nigeria today, it is only Tin Can and Apapa ports that seems to be viable, and it is viable because what is going on does not conform with shipping methodology.

He said that Eastern Port users do not have any other alternatives than to come to Lagos,even as he argued that the ports of Calabar, Port Harcourt,  Rivers Port, Warri have almost collapsed completely.

According to him, the reason why importers don’t use eastern ports is because the berth areas of these ports cannot go further than 8meter draft.

“They kept dredging and dredging, but as soon as a vessel enters through the channel, it drags up to four truckload of sand.
Also, there are some of these channels that are prone to siltation.
Looking at the draft of the waters, there is no way that all these mega ships can access the port”

“What has compounded the whole issue is that the time spent by ships in trying to access Calabar Port or River Port is almost four times higher than what it takes a vessel to leave the Commodore Pool here in Lagos to the berth in Apapa or Tin Can Port, the delay is too much”

“For instance, if it would take twelve hours to access the berth in Tin Can from Commodore Pool, in the East, it would take not less than three days to cover the same distance, it is a serious problem”

“The freight cost for any vessel going to the East is equally higher, it is almost three times of what you pay to move cargo from South Africa to Lagos”

“When these vessels get to the anchorage in Port Harcourt, before they are allowed to access the berth, we heard information that it takes up to three weeks and a month for vessels to berth” Increase said

It is however pertinent to mention that another major factor that would continue to affect eastern ports viability is the lack of political will of the government.

It is believed that if the government had before now heeded  the call for a deep sea port, all these challenges would have become a thing of the past.

The federal government can as well address the challenge through policies and laws. For example, some of the vessels coming into Lagos ports can be diverted to the Eastern Ports as the port terminals at Lagos ports, especially Tin Can Island port are congested.

Our correspondent investigations have shown that what the terminal operators do is to block-stack the cargoes inside the terminal by at least seven stacks, this causes delays and inventories are building up inside the terminals.

The sooner the federal government wakes up from its deep rooted sleep on matters concerning the eastern ports, the better for the economy of the nation.

It is ridiculous to note that a shipping company in Nigeria, Maersk Line spent $18million dollars yearly as security on their vessels trading at the eastern ports

Immediate past Minister of Transportation, Rotimi Amaechi narrated that some private individuals are now profiting from the insecurity situation at the eastern ports under the guise of providing private security.

The former minister described this as “free money” which if ploughed back into the economy of Nigeria could turn things around for good.

This also calls to question the $195m maritime security contract signed between the Federal Government and an Israeli firm, HSLi Global.
The federal government believes that this contract, coupled with the new anti piracy law is the answer.

But until then, importers would continue to storm Lagos to receive their cargoes while eastern ports continue to deteriorate.