Hostile business environment scuttling N630bn air cargo business in PH

Hostile business environment coupled with lack of a well structured cargo clearing market in Nigeria’s oil rich South South region is scuttling N630 billion air cargo clearing business at the Port Harcourt international airport.

The relatively vague market operated by very informal agents in contrast to the well organised Murtala Muhammed International Airport, Lagos, has seen clients comprising Oil and Gas firms and government agencies operating in the region, opting to route their cargo to Lagos before hauling to Port Harcourt by road, a trend analyst say is diminishing the airport’s market status.

The Port Harcourt international airport which had been predicted by market watchers to serve as a regional hub for the South-South region currently attracts only 2.5 percent (valued at N5billion) of its potential 25 percent (estimated to worth N630 billion) of the total 250 million kilogramme of air cargo imported into Nigeria annually.

This under tapped potential is further plagued by lack of awareness of cargo clearing services at the international airport by clients, leaving the airport scrambling for only 17.5 million kilogramme of cargo, as freight forwarders are also expected to pay an additional N2.50 kobo per kilogramme to fly cargo into Port Harcourt as opposed to flying them into Lagos.

“The major challenge with cargo business at Port Harcourt airport is lack of a formidable cargo clearing market structure and the poor reputation garnered by the South-South region during the era of militants, when most foreign airlines aborted their services from the route including cargo airlines,” Femi Adewunmi, chairman, Prime Port Logistics told BusinessDay in an exclusive chat.

Adewunmi whose firm recently commenced offering clients Door-to-Door freights services and delivery within Port Harcourt and its environs disclosed that while some clients are unaware of the cargo operations at the airport, the fear of an extra charge caused by lack of cargo volume have also continued to affect client’s interest in ordering their freight fowarders to route their cargo directly to Port Harcourt.

BusinessDay findings also revealed that another reason compelling firms to route their cargo through Lagos rather than directly to Port Harcourt is the high cargo tariff charged by customs at the Port Harcourt airport.

Ebele Okoye, South-South/South-East regional general manager, Federal Airports Authority of Nigeria (FAAN) who confirmed this to BusinessDay, explained that plans are in top gear by the relevant authorities to form a synergy on how best to lower the rates and consequently attract more volume into the airport.

Okoye further noted that FAAN is determined to provide a veritable platform to attract more cargo clearing agents to the airport, pointing out that the international airport is currently under-actualising its potential.