It costs much higher to ship both 20-foot and 40-foot containers to Lagos ports from Port of New York.
Nigerian importers pay freight cost to shipping lines in excess of $2,400 on 20-foot and $3,500 on 40-foot containers that are bound for Nigerian ports, a new report by Quartz Africa has found.
Much of the high cost of shipping to Nigeria arises from inefficiency at the country’s ports, including slow inspection process by the Nigeria Customs Service (NCS) and other government agencies, leading to longer cargo dwell time.
Shipping goods to Nigeria by sea from the United States can leave a big hole in your pocket, according to the Quartz Africa report titled ‘It Costs More to Ship Goods to Nigeria from the US than Any Other Destination’.
According to the report, analysis on overseas cargo and freight costs by MoverDB, an online resource for international shipping, shows that high costs of shipping to Nigeria do not correlate with distance, and shipping from New York to Nigeria is nearly double the cost of shipping to South Africa even though Nigeria is closer.
A breakdown of the cost shows that shipping a 20ft container from Port of New York to Apapa, Lagos (Nigeria) costs about $4,982 compared to shipping the same 20ft container to Cape Town (South Africa) which costs $2,542 ($2,440 less).
Similarly, it costs $7,436 to ship a 40ft container to Apapa as against $3,795 to ship the same size to Cape Town ($3,641 less).
“The slow pace of inspection of cargo means that congestion and bottlenecks are nearly perpetual in Nigerian ports. The ports’ inefficiencies have for years enabled and incentivised corruption from official and unofficial middlemen that clear goods for a ‘fee’,” said the report.
A further breakdown shows that shipping a 20ft container to Beirut (Lebanon) from Port of New York costs about $1,943 while 40ft costs $2,900.
Also, moving 20ft container from the same location to Zayed (United Arab Emirates) costs $1,723 while 40ft container costs $2,572; 20ft container to Haifa (Israel) costs $1,729 while 40ft costs $2,581; 20ft container to Montevideo (Uruguay) costs $1,816 while 40ft costs $2,711.
Similarly, shipping 20ft container from Port of New York to Buenos Aires (Argentina) costs $1,993 while 40ft container costs $2,975; 20ft container to Auckland (New Zealand) costs $2,645 while 40ft costs $3,949; 20ft container to Sydney (Australia) costs $2,797 while 40ft costs about $4,175, and 20ft container to Jeddah (Saudi Arabia) costs about $3,086 while 40ft costs $4,606.
Margaret Orakwusi, chairman, Shipowners Forum/CEO, Morbod Group, said recently that ports in African region, particularly Nigeria, are currently the least efficient in the world.
Dwell time of cargo in African ports, she said while presenting a paper titled ‘Maritime Industry as a Socio-Economic Enabler in Nigeria’, is nearly quadruple the dwell time in Asian ports, which explains why no single African port ranks among ‘the 70 Most Productive Ports in the World’.
According to her, despite the Executive Order on Ease of Doing Business launched by the Federal Government in 2017 to ease import and export flow, nothing has changed as none of the Orders has been fully implemented.
She called for full automation of port operation to ensure efficiency and corruption-free port. This, according to her, would result in reduction of cost and delays at the ports.
BusinessDay finding shows that containers dwell between 20 to 30 days in Nigerian ports due to bureaucratic bottlenecks involved in cargo clearance as well as inability to use automated processes in cargo inspection.
Reacting to issues of cost of doing business, Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA), said over 90 percent of cargoes coming into Nigerian ports are being examined physically by all the agencies of government.
“This automatically translates to congestion and we want the minister of transportation to intervene by calling on Nigeria Customs to deploy scanners in our ports. We need to facilitate inspection of cargoes at our ports using scanners in order to eliminate delays and cost,” she said.
Hassan Bello, executive secretary, Nigerian Shippers Council (NSC), who expressed worry over the high cost of doing business at Nigerian ports, said Nigeria needs to have comparative advantage because its ports are competing with others in the neighbouring countries.
According to him, Nigeria has proximity and historical bond with Niger Republic that does millions of tonnes of cargoes annually, but instead of using Nigerian ports, Niger importers get their goods through Cote d’Ivoire, Benin and Togo because of cost differentials.
Bello called on the minister of transportation to check the excesses of government agencies, especially their charges, because unregulated charges have direct consequences on cost.
“There is need to remove extortions and ensure that processes are automated to cut down delays. With Ease of Doing Business, Nigeria will have more volumes and more revenue. We need to institute reform no matter how painful they are,” he said.
AMAKA ANAGOR-EWUZIE
