The cost of freighting containers from India and China ports to Nigeria is beginning to record a slight decline on the back of frequent ship sailing to Asian routes and an increase in the ability of importers to secure space onboard vessels due to the availability of empty containers.
Currently, moving a 20-foot and 40-foot container from India to Nigeria now costs between $4,000 and $7,000, down from between $7,500 and $15,000 previously charged by shipping companies in September 2021.
From China, moving a 20-foot and 40-foot container to Nigeria now costs between $7,000 and $11,000 instead of $8,000 and $16,000 that were charged in September 2021, when the cost of freight was at a record high.
Confirming this, Tony Anakebe, managing director of Gold-Link Investment Limited, states that importers are beginning to see a reduction in the cost of freight from countries like India and China to Nigeria.
According to Anakebe, moving 20-foot and 40-foot containers from India to Nigeria that used to cost between $7,500 and $15,000 now costs a little above $4,000 and $7,000, respectively.
From China to Nigeria, he says, importers that used to pay $8,000 and $16,000 to bring in 20-foot and 40-foot containers during the peak of the supply chain disruption in September are now paying between $7,000 and $11,000 to ship 20-foot and 40-foot containers, respectively.
Anakebe however notes that there is still a bit of rush among importers that want to bring in their goods from China to Nigeria, which made the cost of freight from China to Nigeria to still remain a bit high.
On why the cost of freight is beginning to normalise, he says suppliers in the countries of origin are producing several goods that need to be moved to countries where they are needed.
“The cost of freight started normalising around December 2021, and it has remained a bit stable till date because international shipping companies are now deploying more ships to India and China to lift containers,” he explains.
Currently, he says the number of ships calling India and China ports has increased and the ability of importers to secure space onboard vessels is also becoming easier because containers are being made available for people to load their goods.
On his part, Jonathan Nicol, president of the Shippers Association of Lagos, notes that freight costs are coming down but are still far from becoming normal.
“The US is beginning to charge shipping companies for leaving empty containers in their country that may form part of the reasons shipping liners are now deploying containers to ports where they are needed to load goods,” Nicol says on the phone.
While emphasising that shippers globally want the cost to come down in order to reduce the skyrocketing cost of doing business, he states that the Central Bank of Nigeria (CBN) does not allow Nigerian shippers to pay above $5,000 per month for freight charges.
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If a shipper has a freight that is more than $5,000, the shipper has to wait for another month to be able to pay up, according to Nicol.
Nicol, who notes that most of the goods are a backlog of as far as six months ago, however, attributes the rush in China to the upcoming annual holidays in China, which is forcing most of the suppliers to clear their tables.
“Chinese Lunar New Year holiday, which is scheduled to start on February 1, 2022, is almost here. And many Chinese suppliers and factories will shut down for over one week. This is why many importers are rushing to take delivery before that time,” he explains.
But, according to Container News, an online trade report, the freight rates may not soften anytime soon but would like to shoot up in the coming weeks.
It states that the current freight cost in China can be attributed to the COVID-19 variant, the changing purchasing patterns, the Chinese New Year that is around the corner, and the restocking of supplies that followed due to the rising number of COVID-19 cases in China.
“The current level of freight rates is a reflection or consequence of the disruptions in the market that are partially driven by the exceptional demand situation in the US and Europe,” Container News notes.
