Why Nigerian shipping firms concentrate on wet cargo-Umar
President of Nigerian Shipowners’ Association, Aminu Umar
BY FRANCIS EZEM
Strong indications emerged that Nigerian-owned shipping companies might go into container and other bulk shipping activities any soon as expected by many stakeholders due to some inherent natural barriers, says President of Nigerian Shipowners’ Association NISA, Aminu Umar.
Some stakeholders in the shipping and maritime industry had over the years called for the extension of the Coastal and Inland Shipping Cabotage Policy, which restricts carriage of cargo within the coastal and inland region to only fully indigenously owned shipping firms to the container and other bulk segments as part of measures to grow and develop indigenous shipping business.
Umar, who spoke in an exclusive interview, disclosed that most Nigerian ship owners will continue to concentrate on the lifting of wet cargo, especially oil and gas because of some major natural barriers in the bulk and container shipping segment which is dominated by the few well –established firms globally.
According to him, under the oil and gas industry, there are jobs for the movement of wet cargo under the Cabotage policy within the coastal and inland region such as from Lagos to Port Harcourt or from the refinery to another depot and vice versa, which are not available in the container and bulk cargo shipping business.
He noted that a container ship coming to Nigeria for instance from Europe, Asia or America for instance sails from its transshipment centre from Las Palmas, Lome, Ghana or even Gibraltar to Lagos, Port Harcourt, Calabar or Warri seaports in the country, which forecloses the provision of any shipping service by the indigenous shipping companies, many of which cannot do deep ocean shipping for now.
“I think it is good if Cabotage is extended to the container segment of shipping, however, if you look at the container traffic in Nigeria there might be challenges. In the oil and gas sector, you have movement of cargo from Nigeria’s port to another Nigeria’s port, may be from refinery to other depots or from a seaport in Lagos to another in Port Harcourt. This is not the same in the container traffic.
“The major problem here is that we do not have the cargoes that do this kind of movements in container shipping. There is no container cargo leaving Lagos to Port Harcourt, Warri or Calabar. The container vessel movement is either they come from their transship centre Las Palmas, Lome or Ghana and they go to Lagos, Warri, Port Harcourt or Calabar directly. So there is no movement of containers from Lagos to Port Harcourt, Warri or Calabar and vice versa”, he said.
This development makes it difficult for the indigenous ship owner under the Cabotage regime to come effective container shipping because they come from their transshipment areas abroad and move straight to their port of destination in Nigeria.
It was gathered this same natural barrier applies to bulk and other general cargo vessels, especially dry cargoes such as bulk cement, wheat or gypsum, which move from port of origin of the cargo, make routine stops at some transshipment centres and move to the final port of destination in Nigeria, which might be Lagos, Port Harcourt of Calabar.
Investigations also showed that the retention of the trade policy, which makes for the carriage of Nigeria’s export products including crude oil on the basis of Free on Board FOB, while her imports including containers and bulk cargo on Cost, Insurance and Freight CIF, has not helped matters since a Nigeria importer cannot determine or influence the mode of carriage of his imports.
Umar, who doubles as Managing Director of Sea Transport Services Nigeria Limited, an indigenous shipping company however says that even in the face of these seeming barriers, Nigerian investors could go ahead to invest in general, bulk or container carriers.
“But that does not prevent anybody from investing in general, bulk or container carriers. If you look at the container business, there are few restricted liner services, who monopolise the entire business may be about seven -10 companies that are doing it worldwide. It is very difficult for you to come into this business to be doing Nigerian cargo alone because you cannot compete with somebody doing worldwide so for the bulk cargo it is the expertise and the market because all the cargo come in as imports, we are not exporting. So it will be difficult for one to invest in this segment of the market because you do not control cargo movement from there. That is why most of the Nigerian ship owners are in the oil and gas sector because the cargoes are originating from here, it is easy, you have control because you know the person buying and the person selling”, the NISA boss also said.