NPA: Addressing deficient port infrastructure, through palliatives, incentives
The gridlock on port access roads in Apapa occasioned by indiscriminate parking of trucks, has no doubt been a major concern to stakeholders and port service users. In this report, FRANCIS EZEM examines some of the regimes of palliatives and incentives introduced by the Nigerian Ports Authority to cushion the financial burden and other effects of such gridlocks. These are in addition to many other long term measures that would ultimately make the ports globally competitive.
As a major exporter of crude oil and import-dependent nation, Nigeria’s economy relies heavily on seaborne trade, as over 70 per cent of the country’s external trade is routed through the Apapa habour. However, the poor state of access roads to the Apapa Habour, which houses the two biggest cargo seaports in the country, Lagos Ports Complex and Tin Can Island Ports Complex has grown into a national nightmare. This no doubt has a paralysing effect on socio-economic life within Apapa, including the evacuation of cargoes from the Lagos and Tin Can Island Ports respectively.
The situation has graduated into what is infamously termed “Apapa gridlock”, where nearly every open space within and around the port city has been turned into a trailer park. The gridlock has negatively affected operations at the two seaports in Lagos, the business of import and export has suffered significantly due to huge evacuation costs, as trucks spent weeks while waiting to gain access into the port terminal.
To demonstrate their anger and frustration, some residents of Apapa last November gave the Federal and Lagos State Governments a 21-day ultimatum to clear the armada of trucks that have, for years, made life a living hell for them and Nigeria’s economy at large.
Similarly, the Ladipo Market Traders Association raised similar concerns, especially at the over 200 per cent hike in haulage cost, resulting from the persistent gridlock experienced on the Apapa-Oshodi Expressway and other access routes linking the Lagos ports. The traders lamented that the increase in haulage cost was also responsible for the hike in price of goods in the market.
As part of the bold initiatives to arrest the impending port congestion, the Managing Director of Nigerian Ports Authority, Hadiza Bala-Usman, met with the key stakeholders at the Boardroom of the Authority on Friday December 14, 2018. Those in attendance include representatives of terminal operators, shipping companies, port managers and representatives of sister government agencies in the port.
Unlike previous interventions that focused mainly on off dock situational challenges, this meeting resolved to address the connectivity challenges associated with doing business at the ports. Arising from the meeting, the Authority rolled out a regime of palliatives and incentives to reduce the financial burden of shippers (importers and exporters) transacting business in the port, facilitate quick evacuation of cargoes and encourage faster return of empty containers to the port, among other benefits.
With effect from December 18, 2018, the rent-free period for cargoes stored at the terminals was increased from the current period of three (3) free days to 21 free days, for the next four months. The demurrage free period on return of empty containers was increased from the current five (5) day- period to 15 days as well. The review would result into millions of dollars in savings for shippers and their agents.
To further ameliorate the hardships faced by cargo owners, shipping companies were directed to immediately deploy barges to evacuate empty containers from the port and take steps to clear the backlog of empty containers under their purview.
To create more free space for cargoes arriving into the country, the Authority called on the Nigeria Customs Service to immediately commence the process of auctioning overtime cargoes littering the ports. These auctions should be carried out on the spot at port locations and every buyer would be given a stipulated short period to evacuate the cargoes out of the ports, failing which such cargoes will be re-auctioned.
In addition, terminal operators were advised to negotiate and grant waivers to consignees to facilitate the evacuation of these cargoes, and mitigate against huge financial loss for the terminal operator as well as the consignee.
Use of Holding Bays
Early this year, the Authority began to enforce the delivery of all empty containers at designated shipping companies’ holding bays, to manage the traffic in and around the Lagos ports. The Authority has also promised to come hard on truck drivers who fail to comply with the February 2018 Notice issued against the bringing of empty containers directly to the ports.
The Authority advised shipping companies to stop using their terminals in the port for storing empty containers and that no truck driver or owner must be allowed by any official of NPA and terminal operators to bring empty containers into the ports after delivering the goods to importers.
The terminal operators are also to declare the number of empty containers in their terminals periodically.
Over 40 per cent of the space at the Lagos Port Complex (LPC) and the Tin-Can Island Port is occupied by empty containers. It was discovered that many shipping companies do not operate holding bays, contrary to the terms of their license.
There was an attempt in 2013 to commence a scheduled freight service for the evacuation of cargo by rail at the nation’s premier port in Apapa, which houses the largest container terminal in West Africa. The option of use of rail for the evacuation of cargo from the seaports in Nigeria has not been optimised over the years. According to the Nigerian Railway Corporation NRC, out of the country’s six major seaports only Apapa and Onne seaports are currently connected by rail.
Despite being the cheapest mode of transport, the percentage of cargo evacuated by rail from the port, remains abysmally low. The intermittent congestion experienced at the Lagos Ports is as a result of the huge volume of imports being evacuated mainly by road over the years.
President Muhammadu Buhari had while addressing the maiden edition of International Association of Ports and Harbours IAPH Africa Region Conference hosted by Nigerian Ports Authority September, last year said: “After the issues of adequate security and transparency, the one other important factor deciding the competitiveness of ports is that efficiency with which cargoes are evacuated to and from the ports.
We understand that this interconnectivity will improve the country’s economic competitiveness as targeted under the Economic Recovery and Growth Programme ERGP. So for starters, I have directed that every port must have the compliment of rail infrastructure and our projection is that by the end of 2021, we will have standard gauge railway across the main North-South trading route.
Just as we have insisted on the stimulation activities on our inland waterways. Major inland river channels are being dredged with adequate channel markings for ease of navigation all the way through the East and Northern parts of the country. That is the only way to go if we plan to remain competitive in the maritime industry”.
In line with this, the Minister of Transportation, Mr. Rotimi Amaechi has already set in motion measures that would enhance the actualisation of the President’s directive as the ongoing national railways development and construction has now been recalibrated to link all the major seaports in the country. This will ensure seamless movement of cargoes out of the ports to all regions of the country.
Improved Cargo Clearance
The Authority, like other IAPH member seaports, is fully committed to the provisions of the Convention on Facilitation of International Maritime Traffic FAL and has adopted measures that would keep to a minimum, time spent for port traffic flow arrangements such as loading and unloading; customs clearance; and provision of aids to navigation).
Having succeeded in helping shippers to regain the right to choose the port to land their shipments, irrespective of the type and quality of the cargo, the current leadership of Nigerian Ports Authority equally stepped up collaborative efforts with the Nigeria Customs Service and other sister agencies on the implementation of the National Trade Platform (NTP).
The project has the capacity to revolutionize the cargo supply value chain in the country has it will make cargo clearance simpler, faster and more transparent. The project comprises the deployment of a National Single Window along with the provision of scanning services at all the ports.
End time for Apapa gridlock
It is believed that these palliatives and incentives introduced as one of the fallouts of December 14, 2018 meeting between the Managing Director of NPA and port industry stakeholders are emergency measures to resolve the artificial congestion arising from infrastructure deficiencies outside of the ports.
While the new regime of palliatives are set for a review by the end of March 2019, the Managing Director has assured that other measures to put an end to the hardship faced shippers doing business at the Lagos ports would be intensified.
These long term solutions include the reconstruction of the roads leading to the Apapa and Tin Can Island Ports, the completion of the trailer park near Tin Can Island Port, and the roll-out of the truck call up system that would sanitise the flow of traffic within Apapa.
It was further gathered that having identified the challenges, the Nigerian Ports Authority is working towards the establishment of a seamless intermodal system that allows cargoes to be evacuated from the nation’s seaports by road, rail and inland waterways, which would ultimately eliminate delays and make Nigeria’s ports globally competitive. Stakeholders have however commended these initiatives by the NPA, which have brought succor to port service users, insisting that it can only be better.