How To Solve Nigeria’s Empty Container Conundrum – Osonwa

By Kenneth Jukpor

Barr. Emmanuel Chekwube Osonwa is the Legal Adviser, Clarion Shipping (WA) Ltd. Ahead of a novel barge operation to convey empty containers from Lagos to Cotonou, the veteran maritime lawyer sat with MMS Plus correspondent for this interview.

Osonwa brings his over twenty-five years industry experience to bear on a wide range of maritime issues; ranging from cargo evacuation to port access bottlenecks, the prospects and challenges with barge operations, the electronic truck call-up system, among others.

Enjoy it:

 

Clarion Shipping is set to carry out a new approach to evacuate empty containers from Lagos to Cotonou via barging. What inspired this venture?

We all know that an empty shipping container is a reusable equipment. Several years ago, prior to the port concession, people could take delivery of their cargoes from the ports and return the empty containers seamlessly in due time. However, the problems associated with return of empty containers started when the Nigerian Ports Authority (NPA) instructed some shipping lines not to bring in their empty containers because there was no space for the empties at the ports since the spaces allocated to such shipping lines at the quay apron were filled. Since those shipping lines didn’t have ships to evacuate their containers, the trucks were forced to turn back and the problems continued increasing until the port concession.

With the jaundice arrangement through which the ports were concessioned, the problems became exacerbated. Shipping companies were directed to provide holding bays which could be outside the port environment so that empties could be directed to such locations.

Today, it is unfortunate that these empties aren’t returned and people are losing their container deposits and paying additional charges for a fault that isn’t theirs. For the truck owners, the delay in dropping these containers leads to loss of revenue that could have been earned if the trucks speedily engaged in other businesses.

Bad roads have also worsened the situation in recent years but the major problem has been the empty containers which equally delays the turnaround time of ships at Lagos ports. This explains why the ships drop the containers they brought and return empty to their respective nations or other ports.

The situation has deteriorated to the point that Lagos State is being regarded as a dumping site for empty containers. You can see container littering everywhere in Lagos while shipping lines doesn’t have the containers to reuse. This problem led to a recent increase in freight cost from Asia and Europe recently. The price increased from $3000 per 40 ft container to between $12,000 and $15,000; however, this hasn’t solved the problem of insufficient empty containers overseas.

These problems led Clarion Shipping Company in partnership with Maersk Line to explore venture into barging empty containers from Lagos to Cotonou.

This will set the record as the first time empty containers are being moved directly to Cotonou port via barges. At Cotonou port, foreign ships have access to come in and move empty containers. Some of these ships aren’t willing to come here because of the numerous bottlenecks from Secure Anchorage Area (SAA) to draft and quay apron challenges. Since it’s easier for these ships to access Cotonou port, we decided to partner with Maersk Line to move empty containers to Cotonou via barges.

 

How many containers will be taken in this particular voyage?

This barge will take 480 containers because we have to adhere to safety and operational standards. The barge can take up to 500 containers but we are being mindful of lots of precautions. The engineers, who designed the barge with all required equipment, have advised we do 480 containers. The containers will be fastened with slugs and lashed together. Although the containers will be stacked five each, every container has two slugs as they are fastened to themselves and lashed together from the deck to the top.

Would you advise other shipping lines and logistics companies to explore this novel arrangement to have empty containers conveyed by barges to neighboring ports?

This is truly a novel arrangement but it is also a high risk and very expensive venture. It costs huge sums to get an ocean-going tugboat and a barge of such huge size. We chartered the tugboat from ENL and it is a top quality one that can transverse any waters. The tug is Beaufort Force 5 which means it can move at a very high speed.

Although this venture is very expensive, people should be willing to explore such options as long as they are delivering quality services. I would advise anyone who wants to make similar efforts to utilize quality barges and tugboats to prevent mishaps. This way, we can return most of the empty containers that have become a logistics burden for Lagos ports.

Barging has eased the burden of cargo evacuation from the ports in the last few years and Clarion depends largely on barge operations for its services. How would you react to the recent barge accidents that saw containers falling into the waters?

In Nigeria, once people see that a business is flourishing, everyone wants to delve in. At Clarion we have won some awards from our efforts to evacuate containers from the ports via barging to our Mile 2 annex. The problem is that the influx of people into barge operations has led people to join the business without utilizing top quality jetties, barges and other necessary equipment.

Some people hurried into the business without safety measures and they are responsible for most of the mishaps with barges. Sea trade is a very lucrative and beautiful business when done in the appropriate manner in adherence to global best practices, especially on safety.

For the maritime sector, there is a convention called Safety of Lives at Sea (SOLAS) which prioritizes safety and there are also other similar conventions. This shows that apex global maritime regulatory body, International Maritime Organization (IMO) understands the significance of safety in maritime.

Until the regulators can expunge people who practice barge operations without recourse to standards and safety precautions, these mishaps and accidents would continue. If you look at the barge going to Cotonou, you would observe some space in between so people can walk through and access any part of the barge during the voyage. You would also see generators and pumping machines onboard to pump out water in event of any leakage during the journey.

Following this feat to move empty containers to Cotonou, do you think shippers can begin to patronize barges to move consignments to the Eastern ports from Lagos?

If well-structured barges can convey goods from Lagos to the Eastern ports; however, such barges must be top quality and the containers properly latched. One of the problems with barging to the Eastern ports is the state of the channels. There are lots of sand bars along the channels and barges will run aground if they move through the sand bars.

There is a dire need for proper dredging of these channels so that they would be safe for barge operations. For instance, when you go across the River Niger bridge during the dry seasons and look at the river, you will find sand bars. It wouldn’t be possible to make such a trip to the Eastern ports via barges because of the sand bars. However, there is a huge potential if the channels are dredged and from Onitsha one can also access Baro River port via barges but sand bars are also on that channel.

How will you rate the new electronic truck call-up system recently introduced to regulate trucks access to the ports?

The effect hasn’t been felt by those of us operating in the Tin Can to Mile 2 axis. The result has been abysmally low. While the online platform has been successful in the Apapa area, the human element which breeds extortion is the major impediment on the Tin Can axis. Some of the challenges can be attributed to the ongoing construction in the Tin Can/ Mile 2 route, but the biggest challenge is the human interface.

NPA has directed shipping lines to send their containers to holding bays instead of the ports. The idea is to lessen the traffic on port access roads but these containers would eventually have to get to the ports to be exported. If this problem of port access isn’t resolved, how then will the containers get to the ports?

 

Can you give us the cost of barging these 480 empty containers to Cotonou port?

The figure is huge, but I can’t disclose it because the barge hasn’t left. It is also a partnership venture with Maersk Line. We have a challenge at the moment that has hindered the voyage. The problem is that the Nigerian Maritime Administration and Safety Agency (NIMASA) has placed Naval officers onboard to prevent us from moving until certain certifications are done.

Since the barge was hired for this voyage, we are paying daily in dollars but government agencies are more concerned about what they can get from us. The journey should be about three days, but we have kept the barge for over three days already and we are paying for it daily and also for the ocean-going tugboat. The regulators are placing some impediments that should have been waived knowing the importance of evacuating empty containers. These agencies are more interested in the forms rather than substance. Some of these certifications are irrelevant and inapplicable, but the agencies are more interested in these processes than the innovative initiative.

 

In clear terms, how have maritime regulators frustrated your efforts to utilize this barge to export empty containers?

The barge we chartered is a local one but Nigeria Customs Service (NCS) asked us to break-bulk. We were asked to show how the barge came in; when we didn’t come from outside Nigeria. The barge has been working in Onne under service boat arrangement before we took it for terminal operations and modified it for this purpose. It is a local barge just like others moving in the Lagos port environment.

Why should Port Health ask us to come for certification for a craft moving around the coast within the country? It is only when the barge is set to go international as it is at the moment that such questions or requirements should arise.

A barge that came to Lagos from Port Harcourt should have no dealings with Customs and Port Health; but that hasn’t been the case. These regulations are being applied out of context. It is also unfair that the regulators demand that if we don’t complete the processes we wouldn’t move out.

This barging initiative is being delayed by these bureaucracies while we are paying colossal sums daily in dollars for the tugboat and the barge.