Enhancing Eastern Ports Viability With Barge Operations

By Kenneth Jukpor

Lagos seaports have become a burden to the city residents as well as the port users as a result of the perennial traffic gridlock. Meanwhile, it is open-secret that utilization of the ports in other parts of the country, especially the Eastern ports could decongest the Lagos ports and eliminate the traffic along the Apapa and Tin Can ports access roads, but several challenges have made this viable option only a theoretical knowledge.

Beyond decongesting Lagos ports, utilization of Eastern ports in Calabar, Onne, Rivers and Warri would also grow the economy of the states with Small and Medium Enterprises (SMEs), other maritime support services  and logistics components enhancing the economic opportunities in such areas.

As part of efforts to address this problem, the Nigerian Ports Authority (NPA) has held several stakeholder engagements in Warri, Port Harcourt, Onne and other Eastern port locations. Last year, the Authority also introduced a 10 percent discount on harbour dues in all concessioned terminals at the Eastern Ports.

Several factors mitigate against the viability of Eastern seaports, with piracy and the consequent high cost of placing armed security onboard vessels recorded as biggest challenges. The draft of the ports and the channels also remain a major impediment.

In December 2019, the nation recorded the largest vessel calling at the Eastern ports in Onne precisely, and there has also been an increase in vessels calling at Calabar that never occurred in the last twelve years according to shipping experts.

Flat bottom vessels as well as additional container vessels have been calling at Calabar, while Port Harcourt port recently witnessed the berthing of an NLNG vessel, a feat that hadn’t been accomplished at the port before.

Notwithstanding, there is a need to build on these modest success stories at the Eastern ports. This was what led to the strategic virtual meeting organized by the Chartered Institute of Logistics and Transport (CILT) Nigeria last week.

At the virtual summit titled, “Boosting the Activity Levels in the Eastern Ports: The Barge Concept” experts analyzed the challenges ranging from insecurity to natural impediments, political will, corruption and politics, among others and they also proffered solutions.

Although the fate of the Eastern ports have been in limbo as the emergence of larger vessels with deeper draft as well as the potentials of economics of scale with bigger vessels make the Eastern ports unviable, experts posited that efficient use of barges could spring up activities at the ports.

The Lead speaker at the summit, Dr. Gildado proposed cumulative discounts for users of Eastern ports, urging NPA to ensure that such attractive incentives are introduced to drive traffic at the ports.

“The incentives given by NPA are commendable but the Eastern ports need more to enhance patronage. There is a need for provision of rebates and waivers, particularly in cumulative discounts for users of the Eastern ports. The more port users patronize the ports, the fewer dues they should pay to encourage them to return,” Gildado said.

Speaking on the economic benefits of increased activities at Eastern ports, the Vice President West, CILT Nigeria, Mrs. Margaret Ogbonna stressed that economic growth is bound to be recorded at all Eastern port locations if the enabling environment is created to allow the ports thrive.

She observed that the critical factors include curbing piracy and other maritime offences in the region, while dredging of the inland waterways was also necessary to enhance cargo movement to the Eastern ports.

“The challenges with the Eastern ports aren’t new. They include piracy, poor port facilities, and dilapidated terminal jetties, among others. However, the barge concept can be a useful tool to move cargoes to the Eastern ports and other coastal areas,” she said.

Also speaking at the conference, the President, Barge Operators Association of Nigeria (BOAN) Mr. Kelikume Edeme, posited that commencing barge operations at the Eastern ports is long overdue.

“When barge operations started in 2017 in Lagos, it took a long time to gain grounds and be accepted by the port sector. Today, barge operation is the norm and I expect that in the next year or two years, barging should be going on in the Eastern part of the country,” he said.

According to him, the major factor differentiating Lagos ports from the Eastern port is security risk.

“Today in Lagos waterways, you can move your batches from Apapa to Epe heading to Agbara without fear of being attacked. We have few instances where some hoodlums try to jump on your boat and harass the Captain or break containers, but such cases are very rare. For the Eastern ports to achieve this, NIMASA, Navy, Marine Police and others have to be involved in a collaborative effort,” he opined.

The recent decision by NPA to divert ships at Lagos ports to the Eastern ports if the Lagos ports were congested also sparked a debate at the conference with some speakers stating that such initiative of diverting cargo or ships was against international trade practices.

Contrarily, others argued that legislation was needed to allow NPA explore such tough policies especially if the Authority intends to sustain it.

According to Gildado, if the nation can prove that it is more cost effective to redirect ships waiting at Lagos to clear their goods at Eastern port and speedily curb demurrages and cost of waiting at Lagos, the initiative would be accepted by all parties.

“We have all proved that it is more cost effective and it creates more benefits to the economy in Lagos. In this regard you find out that a carrier shall deliver the goods safely, that we can guarantee. Also, deliver at an agreed place or in some cases it has been delivered at a proper place other than the agreed place. For example if a ship is supposed to go to Lagos and it goes to Warri. If that happens, as long as the carrier delivers safely and delivers at an agreed place or circumstances which the delivery will be on time, with the proper mode of transport and received by the proper person; this is a formal way of forwarding cargo,” he explained.

Edeme, however, posited that such development would be in breach of international trade practices as she said: “When you look at the arrangement between cargo owner and ship owner as far as the port destination is concerned there are laws that can’t be decimated with an executive order or an instant policy. Can Vessels meant for Lagos port be redirected to the Eastern port? It is not possible. It doesn’t work that way; the international laws are much bigger and much respected than the national policy and we must begin to look at this.”

However, when quizzed about the infringement on the consignee’s right to route his cargoes to choice port of destination and additional cost for the consignees, the Managing Director of NPA, Ms. Hadiza Bala-Usman described the intervention as an emergency situation.

Her words: “This is an emergency situation that we find ourselves in and everybody has to be mindful of the fact that when there is an emergency there would be casualties. What we said was that in the first instance we would divert cargoes into the Lagos ports so that a vessel stemmed for APMT, for example, would be taken to other terminals in the Lagos area in the first instance.”

“What we seek to do is to have vessels come into the Lagos area and fill up the terminals in Lagos and when we still have some with long waiting period at the anchorage we would send them to the Eastern ports. So far, that measure hasn’t been required because we have been able to accommodate the vessels within the Lagos area. We have vessels stemmed at Eko Support, ENL, and others are taken to the Tin Can Island.

She stressed that what is important is that vessels can’t be waiting outside the anchorage for thirty days to berth when the consignees can take it to Onne and have it delivered in one week.

“The consignees have to look at the opportunity cost in terms of the waiting period vis-a-vis the additional cost needed to move the cargo from the Eastern ports to Lagos. NPA is mindful of its role and trying to prevent a situation where there is congestion because certain persons don’t want their cargoes taken to Onne. At NPA, we wouldn’t permit a vessel to wait at the anchorage for thirty days when it could be taken to the Eastern ports and offloaded within two days. It is an issue of national interest that we can’t have that manner of congestion in our country when other ports are idle,” she posited.

Although the challenges facing the Eastern ports are multifaceted, it is important to note that a document known as Eastern Ports Enhancement Report is available at the Ministry of Transportation and Nigerian Shippers’ Council (NSC).

Mrs. Dabney Shall-Holma, former Director, Commercial Shipping Services at NSC, stressed this last week even as she noted that it analyzed the several issues surrounding the peculiarities of existing ports in the region, with emphasis on the policy framework, operations and enforcement plans.

“The recommendations were also broken down into short, medium and long term plans. It was a product of a robust inter-Ministerial committee with brilliant officers from NPA, Shippers’ Council, Nigerian Maritime Administration and Safety Agency (NIMASA), terminal operators and organized private sector. The management Economic Team was also part of it and the Coordinating Minister, Mrs. Ngozi Okonjo-Iweala personally attended the meetings,” she said.