The gridlock at Lagos ports has deteriorated to a level that it can cost over $4,000 to truck a container 20 kilometres to the Nigerian mainland these days, nearly as much it costs shipping one 12,000 nautical miles from China, the Financial Times reported on Monday.
A perennial problem at the Apapa and Tin Can Island ports, both the principal commercial entry points into the Nigerian economy, has been made worse by the coronavirus-induced economic slowdown and the recent turbulence created by the #EndSARS anti-police brutality protests.
Shipping has become more cumbersome in Lagos with vessels idling in droves at sea, just as a great many trucks are stuck in traffic jams for days or weeks on end, waiting to enter and exit the port.
“During the pandemic, there was a lockdown and then curfews, so dock labour couldn’t resume work as scheduled.
“That lowered productivity and extended the long stays of the vessels,” Otunba Kunle Folarin, chairman of the Nigerian Ports Consultative Council, said.
The pandemic outbreak has pressured international supply chains and is now upsetting global trade.
The port area in Lagos is now more congested at this hectic year-end period, with the Seaport Terminal Operators Association projecting the congestion to be costing Nigeria $55 million every day in lost commercial activity.
With only few days to the take-off of the Africa Continental Free Trade Area agreement, businesses in Nigeria groan that higher costs make it difficult for them to compete.
Jumoke Oduwole, who heads the agency in charge of improving Nigeria’s business ambience, said “we all know that the congestion at the ports is bad for the economy.”
Muda Yusuf, the director-general of the Lagos Chamber of Commerce and Industry, said “the government has been talking about ease of doing business. But if there is one sector where we have not felt the government effort . . . it’s in the ports (shipping), where practically nothing has changed.”
The capacity of the port has remained unchanged since 1997, although the population of Lagos has almost tripled. Africa’s biggest economy imports several raw materials and virtually all finished goods, and the gridlock is creating production delays for multinationals.
The spot rate for shipping a 20ft container from Shanghai to Lagos averages around $3,000 this year, according to Shanghai Containerized Freight Index data provided by Dutch shipping consultancy Dynamar, which is around $3,750 to $4,000 for a 40ft container.
At the moment, the spot rate is $5,000.
Cargo ships typically wait for over one month off the coast before they are able to offload their goods at the port – approximately the time it takes some of them to move from Lagos to China.