By Jeph Ajobaju, Chief Copy Editor
In three years, the cost of transporting a goods container from Apapa Port to Ikeja has risen more than 460 per cent, from N300,000 in 2018 to over N1.6 million in 2021, but the cost from Ikeja to Kano remains at around N600,000.
Oluwemimo Joseph, Strategy & Projects Head and Chief Financial Officer of JET Motor Company, who made the disclosure, said this is a major challenge for importers of goods and raw materials.
“The cost of trucking a container from Apapa to Ikeja is [more than] twice the cost of taking the same container to Kano or Kaduna. The cost increased from N300,000 in 2018 to N1.6 million by January 2021.
“The major cause of this is because the truck owners will tell you that such task, which should have taken them two days, will end up taking six or more days due to congestion at the port,” Joseph told Nairametrics.
Rupani Sanjay, JET Motor Company’s Director of Sales and Marketing, explained that the gridlock at the ports costs importers a fortune, and urged Abuja to aid the eliminate the bottlenecks.
“Aside from the congestion, the government needs to help us reduce some of the back and forth processes at the port, which most times, forces goods to enter demurrage,” he said.
“Most of the time, we have to pay demurrage because of the back and forth processes at the port. The port operators don’t consider the fact that such is caused by the nature of the regulatory functions, as they insist the levy must be paid.
“This, to a certain extent, affects the cost of importation and ease of doing business in Nigeria.”
Gridlock impact extends beyond monetary costs, as freight companies and operators wait more than a month off the coast before they can offload their goods in the port – roughly the same time they spend in transit from China to Lagos.
Port congestion stokes inflation
Congestion is a long running thing at the Apapa and Tin Can Island Ports, the main commercial sea entry points to Nigeria, Africa’s largest economy.
Part of the problem is attributed to poor transport infrastructure as 90 per cent of cargo is transported by road.
Nairametrics reported last December that the gridlock at the Lagos ports cost businesses more than $4,000 to truck a 40ft container 20km to the hinterland, nearly as much as it costs to ship it about 12,000 kilometres from China.
Shanghai Containerised Freight Index data provided by Dutch shipping consultancy, Dynamar, shows that
· The average spot rate in 2020 to ship a 20ft container from Shanghai to Lagos was about $3,000.
· It cost between $3,750 and $4,000 for a 40ft container. The current rate is $5,000.
The high cost of transporting containers out of the Lagos ports requires the attention of the government as cost adds to the price of goods which stokes inflation.