Importers ‘lose N15tr to pandemic’ in Lagos ports

• Scores of cargoes stuck over infrastructure deficit, others • NPA deploys barges for evacuation
• Shippers demand concession • Clearing agents decry huge, unpaid demurrages

Millions of cargoes are currently wasting away at Lagos seaports owing to poor road infrastructure, bureaucratic processes, and unfavourable government policies.

Investigations by The Guardian revealed that many of the cargoes are now incurring high demurrage after enjoying three rent-free days from the time of discharge.

The stockpile of containers is also causing serious congestion due to the closure of access roads for repairs, even as lack of cargo scanners has forced the Nigeria Customs Service (NCS) to resort to physical examination. These, combined, have led some importers to seek solace in neighbouring ports.

Besides, Jonathan Nichol, Chairman, Nigerian Shippers Association (Lagos chapter), told The Guardian that importers have lost over N15 trillion to the coronavirus pandemic, which has limited importation and forced a lot of factories to shut down.

“The figure is even higher because importers cannot pay demurrage for most of the goods now trapped in the ports. Factories have shut down for three months and they don’t have money to pay demurrage. Then you say shippers refuse to come and take their cargoes. Government should introduce a blanket concession on demurrage from the period before COVID-19 to encourage importers,” said Nichol.

He lamented further: “You cannot get Form M to process import. The liquid value for the foreign exchange must be in your account, which you cannot withdraw. The money has remained there for three months. You cannot receive your goods. The bills are constant. Workers’ salary is constant. Transportation is higher. Servicing is constant, and many more. All on one importer! And then you begin to think of how to pay demurrage. The whole thing is just terrible!”

A terminal operator, who preferred anonymity, said cargoes are currently lying in the terminals due to factors beyond the control of the concessionaires.

“The major problem with the evacuation of cargoes is the infrastructure deficit at the ports. The ports need intermodal system. We should be able to fix access roads and make good use of water and rail transport. Apapa port was built about 107 years ago with rail lines, which were recently rehabilitated by APM Terminals. But it is so unfortunate that Tin Can Island port built 23 years ago does not have any rail link. This is a result of poor planning.

“The new deep seaport currently under construction in Lekki does not have a plan for rail link. It is a shame on us, if we cannot plan a perfect infrastructure. The Apapa port built by the whites has rail link but our modern facilities don’t. It is sad,” the source said.

President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, noted: “The problem we have is that there is no rail. Our coastal lines are not utilised and the roads are not good. The implication is grave. The impact on the economy is in trillions of naira. We have not done the full estimate. But we are in a terrible mess because the importers will move their cargoes through other countries.

“Our cost of doing business is one of the highest. We still do physical examination of cargoes. All these challenges make our ports unfriendly. That means we cannot be a trans-shipment port. We are talking of a country that has about 70 per cent of the cargoes in Africa and other countries that have less are sharing of these cargoes. That is too bad.”

Amiwero also regretted that clearing agents are yet to get the demurrage waiver granted due to the pandemic. He said: “As I am talking to you, we are yet to get the refund. NPA has directed them to refund but the shipping companies are yet to comply. They should be severely sanctioned for violating Federal Government’s directive. The importers are made to pay unnecessary demurrage and rents as a result of manipulation and unwholesome practices, infrastructure deficiency and interplay among the government agencies.”

MEANWHILE, APM Terminals Apapa and the Nigerian Railway Corporation (NRC) have resumed the evacuation of containers by rail from the Lagos Port Complex Apapa with a view to decongesting the roads. APM Terminals originally restored rail service in 2013, running thrice a week to Kano and Kaduna.

General Manager, External Affairs of APM Terminals Apapa, Daniel Odibe, said the Terminal and NRC have developed a new Standard Operating Procedure (SOP), which would bridge communication gap and ultimately lead to more efficient cargo evacuation by rail.

“This is an important milestone for the port. It is something we have always asked for. We want to have a Standard Operating Procedure for receiving trains into the terminal and servicing them. It definitely helps planning when you have adequate information ahead of time,” he said. Odibe noted that with the closure of a section of the Apapa bridge for repairs, the resumption of cargo evacuation by rail will help to reduce the backlog of cargoes at the port.

“Our intention when we constructed the rail line in 2013 and connected it to the national line was to provide an alternate mode of evacuation of cargoes to customers. So, improving on the number of containers we evacuate by rail line is coming at the best time with the bridge closure. It will take some trucks away from the roads.”

Lagos District Manager of NRC, Jerry Oche, explained: “A train is made up of 19 wagons, and each of these wagons can take one 40 feet or two 20 feet containers. So, if we are doing 40 feet, that is 19 trucks off the road, and if it is 20 feet that is 38 trucks off the road per trip. (But) we are starting with two trips per day, and we hope to increase it in no distant time.”

The Executive Secretary, Nigerian Shippers’ Council (NSC), Hassan Bello, said the revival of rail evacuation would help decongest the terminal and allow export cargoes trapped at various private garages and port corridors to access the ports through the road.

Bello, who was represented by the Director, Regulatory Services, Mrs. Ifeoma Ezedinma, at the official flag-off in Lagos, said export is key to the growth of the nation’s economy, and the terminals must be decongested for exports to access the Lagos port.

He said the evacuation of cargoes through the seaports would be done via railway and barges. And eventually, export cargoes would be mandated to come through the roads. He noted that the cost of freighting cargoes is less, compared to other modes of transportation. He also assured that the council would monitor the process for compliance and sustainability.

To this end, NPA urged all hands to be on deck to decongest the ports and ensure that the Standard Operating Procedure is entrenched in port operations.

General Manager, Corporate and Strategic Communications, NPA, Jato Adams, told The Guardian: “We have licensed about 21 barge operators to evacuate cargoes through the Lagos anchorage, and one in Warri. We are also trying to streamline the processes and procedures, to ensure that more containers are evacuated with ease.

“On the road, the NPA is working with the Ministry of Works to ensure that the port access road is completed on time. We are also liaising with the Ministry of Transportation and the Railway Corporation to ensure the connection of rail to the port. The entire necessary corridor where the railway line will pass to the port has been approved, as demanded by the Chinese contractor. Work is actually going on, and we are expecting that Tin Can Island ports will be connected with rail very soon.”

Adams also said the authority is turning the Lillypond Terminal in Apapa, Lagos, to a truck park, with the use of electronic call up system. “Private investors have taken over the port. What we are doing now is to draft a Memorandum of Understanding as to the mode of operation,” he said. He also disclosed that the NPA is working with the customs to facilitate the restoration of cargo scanners at the ports, even as he admitted that physical examination of cargo by the agency causes a lot of delay.

Also commenting, an industry chieftain, Ben Okoroga, advised that government policies should be re-examined to boost ease of doing business at the ports. He noted that the recent policy on end user certificate on security-related cargoes is a major setback to port operations.

“The economy has shut down for almost three months, with no interstate movement. The end user certificate is issued only in Abuja. But you cannot travel by air, not even by road. Even without the lockdown, you will spend at least six months to get the certificate. So, what do you expect?”