The cost of moving imports from Nigerian ports to other parts of the country has continued to rattle goods, manufacturers and operators of logistics.
Experts have linked the exorbitant cost of movement of goods at the ports to the high cost of goods in the country, especially imported vehicles and consumables.
Daily Trust findings showed that it costs around N1.6 million to transport a 40 feet container from Lagos to Kano from the previous N900, 000. The same 40 feet container costs N1.2 million to move to Abuja from the N800, 000 that was previously charged.
A logistics expert, Alhaji Mohammed Danlami, described as “a nightmare”, the process of transporting containers and goods within and outside Lagos from the TinCan Port, in Apapa, Lagos.
Truck hirers now pay at least N800, 000 per truck for intra-city haulage while inter-state cargo movement costs between N1.5 million and N2 million, depending on the location.
Confirming Daily Trust’s findings, Alhaji Danlami said it costs about N180, 000 to N200, 000 to move a single vehicle out of the Port to Abuja or Kano.
He said in addition to the bad roads leading to the port, there are tankers and trucks parked by both sides of the road, narrowing it and causing heavy traffic.
He said it takes a minimum of five days for a truck driver to gain access to the port or for someone to move a vehicle out of the port due to the gridlock and the slow security checks involved.
“If you don’t know your way or who to bribe, it may take you up to 10 days to gain entrance into the port. This is why haulage is now expensive and many people have gone into it to make money as well,” he said.
The Managing Director of Mardi Maritime Services Limited, Bello Jada Hamidu, said despite the presidential taskforce, the situation is getting worse.
Hamidu said: “The situation at Tincan Port is the worst. We spend between seven and 14 days on the queue just to get into the port.”
He added that to deliver a 40 feet container within Lagos currently costs around N600, 000 to N700, 000.
Reacting to the development, the Vice President of Abuja Chamber of Commerce and Industry on Mines, Dr. Anene Somadina, told Daily Trust that the high cost is a major concern to manufacturers and industrialists in the country.
He said the cost is finally borne by the final consumer as manufacturers factor such expenses into the cost of production.
He said the high cost impacts negatively on prices of goods and services, leading to inflation.
He added that production deadlines are disrupted most times due to delay in the movement of the goods, thereby disrupting proposed supply schedules, leading to loss of revenue for manufacturers.
He called on the federal government and other authorities concerned to, in addition to fixing the roads leading to the port, decongest it and simplify all processes to promote the ease of doing business in the country.
Alhaji Abdullaziz Hassan Umar, an importer who spoke to Daily Trust in Kano, described the system as very effective, even as he decried the recent restriction on haulage of goods occasioned by restriction of movement because of the coronavirus pandemic.
“We don’t have issues clearing our goods at either the ports of origin or ports of destination provided that you operate within the ambits of the law.
“Mostly we pay for clearance from the country of origin, where we are importing from, like India, China or Dubai, from there we pay the clearing agents everything. By that the clearing agent will now be responsible for transporting these goods from either China to the port in Lagos and from Lagos port to Kano.
“However, with this lockdown, our problem has been with the restriction on the haulage of goods from ports as a result of which we are afraid that some of the goods may go into demurrage having overstayed in the ports because of the restriction on movement” he added.
Another businessman at the Sabon Gari market in Kano who imports foot wears, Abdullahi Hassan, said an average 40-feet container of shoes costs around N6.5m as landing cost from China to Kano.
He equally lamented that businessmen in the state who import commodities via ports face serious delays as the goods spend months before they are cleared and transported to the state.
“You can buy shoes from China for instance and have them delivered to the Lagos port within 40 to 45 days. But, before they are released, they could spend good four to five months there”, Hassan said.
He added, “There was a container of goods I bought in December last year for example, it arrived the shores of Nigeria around January but was in Lagos port for good five months before it was cleared. The goods only arrived Kano this month.”
Abubakar Tijjani Danbatta, the chairman and founder of Abu Mahar Textiles in the popular Kantin Kwari textile market in Kano, told Daily Trust that the time taken before goods arrive has forced many of them to switch to air cargoes despite being more expensive.
He said, “I have since stopped importing goods through the sea port as it takes 8 to 10 months to arrive.
“This, plus other factors such as high cost of clearance, customs duties and the time taken before releasing them from the ports has affected small businesses particularly in the north”, Danbatta added.
He also lamented being charged around N1200 per kilogram to import textile materials from Dubai to Kano and the price increased recently due to the effect of the coronavirus on the economy and increase in exchange rate.
The Chief Executive Officer (CEO) and Managing Director of FAE Ltd, manufacturers of envelopes, Princess Layo Okeowo, said the high landing cost of raw materials at the ports is negatively affecting manufacturers.
The cost, which she said is now 20 times higher, is affecting the cost of production, which in turn is transferred to the consumers. The cost of transporting a 40-feet container from the Port in Lagos to Ogba has risen from N150, 000 to N750, 000.
“In fact, in December last year, the cost of transporting the same container went up to N1.6million because of congestion and the transporters were charging higher because they do not have many trips to go but do only one or two in a week,” she stated.
She also said charges that accrue from failure to return containers to the port after offloading, are high as they charge per day.
“All these multiple costs, which is no fault of ours is becoming a burden to manufacturers and is being passed on to the consumers,” she noted.
According to her, there are numerous challenges at the port ranging from the multiple agencies trying to outshine each other and duplicating responsibilities to the shipping companies that are also not helping.
“Due to the pandemic, when the federal government asked shipping companies to give waiver on demurrage, the big shipping companies complied but the smaller ones and the bonded terminal did not give waiver, especially the bonded terminals. Even when they were approached, they remained adamant. The agencies too are fond of serious problems as they are the ones causing congestion at the port,” she said.
She said even before the pandemic, the reason for the bonded terminals was to address congestion because of people who don’t go to pick their containers at the port on time but now, as soon as the containers are landing, they would be shifted to the bonding terminal, they don’t allow clearing agents to clear them. Ordinarily, containers taken to the bonded terminals are supposed to be those whose owners are not readily on ground to clear.
Also speaking, an exporter and CEO of Jon Tudy Interbiz Nigeria Limited, Mr. Jon Kachikwu, said businesses, especially SMEs are not finding the situation of landing and clearing costs at the port easy.
He said despite the fact that the economy is biting very hard and Nigeria is almost going into recession, government agencies at the port and the shipping lines have been frustrating.
He decried the demurrage fees being charged for importation of goods while insisting that in other parts of the world, they do not charge demurrage during the pandemic.
He advised that a monitoring team should be in place to check security men and other agencies as well as parastatals of government.
“The country is losing. Instead of employing more workers, we are retrenching and it should not be. Government should ensure that the policies and laws they formulate have backups,” he said.
Recently, About 376 manufacturing chief executive officers urged the government to consider reconstituting the presidential task force on port decongestion.
This was the position of the CEOs, following the release of the latest Manufacturers CEOs confidence index report for first quarter, 2020.
Information presented in the report is based on the responses of 400 CEOs of manufacturing companies during the fieldwork of the survey. Data collected on the performance of the macro-economy and the business operating environment from the CEOs was analyzed using a simple percentage.
According to the report, 94 percent of the CEOs interviewed agreed that congestion of ports significantly affects productivity negatively.
They urged the federal government to issue relevant guidelines that would make the Nigeria Customs Service and other agencies at the ports, shipping companies and terminals operators more responsible for service lapses.
The National President of the National Association of Government Approved Freight Forwarders (NAGAFF),Mr. Increase Uche, said aside the review in foreign exchange, a whole lot of other factors also contribute to the high cost of doing business at the nation’s seaports.
He noted that the lockdown occasioned by COVID 19 brought its own pressure on the cost of doing business.
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