Home / I CARE INTERVIEW / 2017: Cargo Freight Increased By Over 120%, 2018 May Be Worse

2017: Cargo Freight Increased By Over 120%, 2018 May Be Worse

2017: Cargo Freight Increased By Over 120%, 2018 May Be Worse

Mr. Olalekan Alabi

By Kenneth Jukpor

Mr. Olalekan Alabi is the Operation Manager at Advanced Motors and Logistics limted (AML) Terminal. In this exclusive interview with MMS Plus, he bares his mind on several pertinent transport sector issues as well as giving an assessment of the transport sector in 2017, from a bonded terminal operator’s perspective. Enjoy it:

Let’s start by taking a holistic look at the Nigerian Transport sector, how did the sector fare in 2017?

When you look at transportation, it is very broad. I would like to narrow it down to shipping. Shipping supposed to be moving well but when you consider the issue of transportation in the country, there are bottlenecks. One of the problems here is the issue of movement of containers, from the seaports to the bonded terminals or the dry ports. So, when you look at the cost implication of that it is very high and it increased significantly in 2017. Containers we used to carry for about N50,000 increased to N100,000- N120,000 while those which formerly cost us N100,000 before now cost about N300,000, due to bad roads.

When you go to Apapa you will see a lot of trucks lying down on the roads, due to the bad state of the roads. The business is supposed to be moving fine but as a result of the dilapidated state of the roads the cost of transportation, it is nothing to write home about. This is the summary of 2017 from an operational point of view as a bonded terminal operator.

With this challenge in mind, what are your expectations for the sector in the year 2018, are you optimistic about the sector this year?

This year has just started and we are hoping for government’s involvement, hoping for government participation in the maritime sector to make things easier. If the roads leading to Apapa, either from the Ijora axis or Berger area, are in perfect condition I don’t think we will have any problem. But if the roads are left unattended I think this year would be more horrible than last year in the aspect of the movement of goods via trucks.

Dry ports are set to spring up in several parts of the country, Kaduna Inland Dry Port was commissioned on January 4th, how does this aid or mar your operations or revenue?

It does not affect our revenue. Dry ports should exist and be functional in the real scenario of maritime operations. You see this in some other parts of the world, especially in developed countries. The way they operate there, if some containers are meant for some companies in other regions, the manifest will read the address of those areas where the containers are going to and by the time those containers are offloaded from the vessels, they would be arranged and transferred to the cargo trains to be conveyed down to their destinations. When this is done, you find that the nation has been able to reduce the movement of heavy trucks on the roads as we find in Nigeria.

Effective use of dry ports will also make sure the lifespan of the roads is elongated.  The introduction of dry ports also means the nation would reduce the rate of accidents that are caused by the heavy trucks and other long vehicles on Nigerian roads. This is because by the time these containers are offloaded at the terminal they will be transferred through the trains. A train can carry up to 200 to 300 containers at once to their different destinations; from there the individual owners and corporate owners of the different containers can clear them. It does not affect our own margin at all.

Bad roads remain a recurring decimal in the nation as you highlighted earlier. Is there hope in sight and what should the Nigerian government do to fix this?

There is no government that will come on board and say they will not provide some social amenities that are necessary. The current government equally made promises to solve this problem but little has been done so far. Maybe it is the economic implications that might be delaying the work. But I have the hope and I believe that very shortly the roads that need repairs will be repaired and the ones that need to be reconstructed will be reconstructed.

How about the rail lines; does the development also aid your operations?

The effective development of railway will help our business a lot. Supposing we want to transfer containers from Apapa to the North or to the Eastern part of the country, it will be easier for us to route them through the rail lines, without having fears of an accident happening on the way.

Also the containers will get to their destinations faster and in good conditions, unlike the trucks which take longer days to arrive their destinations. You will not be at rest when your containers are on the road in transit to somewhere else in the country. You have to be at alert, making calls to find out where they are at any given time and if there has been an accident on the way. The rail eliminates this worry and there will be no issue of the goods been diverted. You know some of the truckers are of questionable character; they can divert some of the containers and offload some of the goods before taking the containers to their destinations. Such issues will no longer be there.

The introduction of palletization policy in the loading of goods for exports and imports is raising a debate as a result of the economic implications and the absence of scanners at the ports. What’s your view?

There are some items that can be better protected when they are in pallets, especially items that are in cartons. If they are in pallets and it hits water, they will be protected because water will not touch them.

Secondly, palletization will make it easier for the Customs to calculate whatever is involved. For instance, if the items are in cartons and they are palletized, it will be easier for Customs to pick up a pallet and know how many cartons are in there and be able to do the calculations. There are also other benefits of this policy.

As you go about your business, in your career what are the major challenges?

The challenges we are facing have to do with the long days it takes for our clients to carry out their containers and the huge demurrage we have to pay to the shipping lines because of the delay as a result of the bad state of the roads. It can take you up to two weeks before you carry out one container out of this place (Abule-Osun office) and one can pay up to N500,000 or more on demurrage alone. This is a very big challenge in the business.

 

 

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