The completion and commencement of commercial activities at the $1.5 billion Lekki Port, an automated port with 16.5 meters draft, will spur competition and enable economies of scale that will automatically save cost for consignees, stakeholders have said.
The business of moving containers in Nigerian ports is marred by inefficiencies due to excessive use of manual processes that result in cargo clearing delays and additional costs for the consignees.
Nigerian ports are said to be among the most expensive in the West African sub-region due to long dwell time of cargo, high cost of doing business resulting from cargo clearing delay, high level of manual processes, and human interference.
These factors, port users say, limit the competitiveness of the ports.
According to projections, Lekki Port would be the first smart port in Nigeria where automated cargo inspection processes would be used in place of human involvement.
The port is expected to create a competitive business environment that would bring about efficient service delivery, compel other operators to compete and reduce the cost of doing business at ports.
Mohammed Bello-Koko, managing director of the Nigerian Ports Authority (NPA), said the completion of Lekki Port would create serious competition among terminal operators.
According to him, the introduction of competition in Nigeria’s port system will compel existing terminal operators to up their games, which will help to reduce cargo dwell time at ports.
He said Lekki Port would enable the Nigerian port industry to regain some of the business lost to neighbouring West African countries due to draught limitations in the existing ports.
Dinesh Rathi, MD/CEO of Lagos Free Zone, who confirmed that there were a lot of inefficiencies regarding the container business in Nigeria, said the presence of Lekki Port would significantly bring down the cost of logistics for those who import and export in Nigeria.
BusinessDay findings show that a deepwater port comes with huge economic gains, particularly in the area of cost reduction. Containers berthing at Lekki are expected to come with cheaper freight cost.
Emma Nwabunwanne, a Lagos-based importer, told BusinessDay that terminal operators would make efforts to avoid losing their existing customers over inefficiency.
“Currently, many terminal operators in Apapa and Tin-Can Island Ports have started re-strategising by introducing automation in the clearing process, and seamless mode of cargo evacuation using barges,” he said.
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Nwabunwanne said manual cargo inspection by government agencies contributed a lot to the delays experienced by consignees, adding that the use of scanners by Customs for inspection would eliminate such delays and reduce the cost of doing business for cargo owners.
On the part of economic regulation, Emmanuel Jime, executive secretary of the Nigerian Shippers Council, said the completion of Lekki Port would bring about economies of scale, which would transform commercial activities in the Nigerian port industry.
“Lekki Port has been something Nigerians have been looking forward to. With the draft that we are going to have at Lekki, Nigeria’s maritime domain will, for the first time, have the kind of vessels that never berth in Nigeria,” he said.
Jime said that with the use of automation in cargo processing, and clearing as conceived by the developer, businesses would be conducted in an efficient way and service delivery would be done in a way that would be cost-effective for consignees.
According to him, Lekki Port will transform cargo clearing processes.
“Human involvement has a downtime in a way that is affecting efficiency and service delivery. If we cut downtime in doing business, that ultimately affects the way we are going to save cost in delivering our services; this port is going to reduce the cost of doing business,” he added.
Lekki Port is expected to be completed in September and to commence pilot operations by December this year.
