Nigeria’s Empty Container Conundrum And Innovative Collapsible Shipping Boxes
With more than 200million empty container movements across the globe responsible for international trade via ships, some ports have become overburdened by the imbalance of shipping containers as lack of exports and port access challenges lead to the abandonment of empty boxes in most countries.
These empty boxes also pose environmental threats leading to a waste, while it also leaves an unpleasant carbon-dioxide equivalent from the number of metric tons of CO2 emissions as the world worries about global warming and the need to utilize low sulphur fuels.
In Nigeria, some of the biggest challenges with port operations are anchored around empty containers; space constraints following the concession of the seaports and mismanagement of empty boxes by shipping companies and terminals, non-refund of container deposits, lack of adequate container holding bays by shipping coys, among others.
There have been several policy directives in attempts to curb this menace with Nigerian Ports Authority (NPA) making several moves to get shipping companies acquire and operate holding bays that could absorb their empty boxes; the Nigerian Shippers’ Council (NSC) has been the mediator to wrestle shippers’ container deposits back from shipping companies, giving one week deadline that remains elusive. NSC’s well-celebrated move to replace container deposits with insurance has remained in the offing for over two years.
Recently, the Managing Director of Maersk Nigeria, Ms. Lara Lana lamented that the shipping company has over 12,000 containers stuck in several holding bays across the nation with no hope of getting back to the needed locations in China.
“As a shipping company, between January and October, 2021, Maersk Nigeria has lost about 3,000 containers and the value of each container ranges between $7,000 and $14,000 depending on the year when the container was made. If you go to retail sites like Jiji, you will see our containers for sale. There are numbers to call to buy our containers that we aren’t officially selling. In Maersk Line, when taking the commercial decision on the container, we consider the value of the cargo because we can’t collect demurrage or detention above the value of the cargo or above the value of the container,” she said.
As the nation’s port sector grapples with this empty container conundrum, perhaps the solution could be found in innovative approaches to address the world’s empty container challenge such as the creation of adjustable containers that could be folded to occupy only 25% of its actual size.
Holland Container Innovations (HCI) has developed the 4FOLD foldable container, a business started in 2008 as a spinoff from the Delft University of Technology in Netherlands. After 5 years of dedicated development, it managed to build the world’s first fully ISO and CSC certified foldable container that helps shippers and shipping lines implement real supply chain innovation.
Since 2015, the 4FOLD Foldable Container has been used on all modalities with different shipping lines all over the world. In 2016, the European Union included the 4FOLD foldable container in the Horizon 2020 research and innovation program. As a result of this endorsement from the European Union and the corresponding financial injection, HCI has a production line that allows mass production of 4FOLD on a large scale.
In 2019, HCI started collaborations between shipping lines and shippers to use the foldable containers on a dedicated route in order to bring efficiency and reduce emissions.
Our correspondent interviewed several stakeholders in Nigeria’s port sector in a bid to get their positions on the technology.
The National President of the Association of Nigerian Licensed Customs Agents (ANLCA) Hon. Tony Iju Nwabunike stated that a move to utilize innovation via collapsible containers could be the best solution to the empty container crisis in Nigeria.
“We need something like this to decongest the ports and assist shipping constraints. While the moves by NSC on insurance is one that should still be pursued, the utilization of such containers would also address the congestion at the holding bays because most shipping companies have run out of space at their holding bays. This is something that should be encouraged,” Nwabunike said.
The ANLCA boss encouraged the port regulators, terminal operators and shipping companies to explore the possibility of using the collapsible containers which he described as ideal for the nation’s port environment.
Similarly, the President of the African Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), Mr. Frank Ogunojemite said the innovation is a welcome development and posited that Nigeria should embrace it.
His words: “Government should encourage terminals and shipping companies to use this type of containers. However, I’ll not be surprised if the terminals and shipping companies are unwilling to support this innovation because they make money from the chaotic port situation in the country.”
According to Ogunojemite, the emergence of the African Continental Free Trade Agreement (AfCFTA) is another reason Nigeria has to avoid being a dumpsite for expired containers.
“If the globe has evolved with the type of containers, it’s only a matter of time before this new one becomes the benchmark and Nigeria has to be conscious about this. The developed world is already thinking in this light. I’m sure several foreign countries are utilizing these containers, so Nigeria shouldn’t be left behind,” the APFFLON President argued.
Speaking from the prism of a seaport terminal operator, the Port Manager, Ports and Terminal Multiservices Limited (PTML), Mr. Babatunde Keshiro noted that he would support the innovation based on the principle that proper application of technology proffers solution to challenges and helps achieve better performance.
He, however, stressed that the challenge at Nigerian ports is not mainly an element of space constraint, but also other issues bothering on harmonization of processes, parallel authority of critical government agencies, ethical governance and non-compliance of traders.
“The fundamental constraint is the long dwell time of imported consignments and government’s attitude to overtime and abandoned cargoes at the port. Hence, priority should be automation and improved work processes,” the port operator said.
On his part, a former President of the National Association of Government Approved Freight Forwarders (NAGAFF), Chief Eugene Nweke observed that the globe is witnessing a new introduction in containerization which is charter take-away.
According to him, some shipping companies like Maersk Line have invested massively in this initiative and it sees the shipper keep the container with his or her consignments.
“What they have done is to reduce the quality of steam and utilize lesser quality in terms of the metals. So, when such containers are sent to the shipper, it’s a complete package because the consignment comes with the container and the shipper can dispose or use the container for whatever purpose after receiving the items. However, the use of such containers is more popular in the Asian market and in America.”
“Cargo handling on a vessel has seen 40ft and 20ft as the more unique sizes but several special cargoes or project cargoes utilize other kinds of containers. The handling gears at the port of discharge also have to be considered when settling for these container types. Terminal operators and shipping companies collect additional charges for containers that aren’t 20ft or 40ft,” Nweke said.
He stressed that the changes in container dynamics is why some experts posit that shipping lines are taking advantage of the absence of proper regulation in Nigeria with regards to empty containers.
“Shipping companies can’t dump containers in Asia or America because they’ll be taxed. So, they opt to ship the disposable containers to these areas while they keep using the conventional containers in Nigeria and the entire African market. It also explains why shipping lines aren’t keen on the return of empty containers. They know what they’re doing and they are also taking advantage of the absence of a regulator for shipping lines. There are extant codes of conducts for these shipping operations under UNCTAD but they don’t follow the rules,” he said.
The leadership of freight forwarding associations have also been accused of making the Nigerian environment more chaotic because some of these issues can be addressed by the leaders, the veteran freight forwarder stressed.
“During my tenure as President of NAGAFF, I collaborated with the then ANLCA President, Prince Olayiwola Shittu and we were able to avoid the empty container crisis we have today. Our major concern at that time was to reduce the container deposit to about N150,000,” Nweke posited.
Nigeria is yet to strike a balance in its foreign trade with imports grossly outweighing exports. There is a dire need to correct this trade imbalance, not only to address the shipping container issues but also address the forex pressure on the nation.
Meanwhile, there should also be discussions on how the nation’s shipping industry could guarantee that the assets of shipping companies are protected, not destroyed or carted away. The absence of containers stuck in countries like Nigeria also lead to an economic consequence of higher freight costs of shipping to the country as observed with the recent hike in freight to Nigeria by shipping companies.
Efforts to address the nation’s port access challenges have to be intensified. Perhaps, it’s time to have an open discussion on these new containers that occupy less space. All port stakeholders also have to collaborate in a bid to attain solutions that will be mutually beneficial to the parties involved.