• Monday, June 24, 2024
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Haulage operators groan over high fuel prices, illegal tolls

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Haulage operators that lift imported and export goods at the nation’s seaport have decried the rising cost of doing business, following the rising cost of fuel, spare parts, and payment of illegal tolls within the port access roads.

BusinessDay gathered that the development has eaten into the profits of the haulage businesses, compelling many operators to either sell off their trucks or close shop.

Remi Ogungbemi, chairman of the Association of Maritime Truck Owners, said the rise in the cost of fuel had negatively affected their business and even made it extremely difficult for many truckers to break even.

According to him, the costs of other components and spare parts have also gone up significantly such that maintaining the trucks has become a huge problem for operators.

Ogungbemi, who spoke to BusinessDay on the phone, said the demand for haulage at the port had reduced drastically due to the low volume of imports and off-season factor.

“It is not only the cost of fuel that has increased, but even the cost of running transportation business within the port environment has also increased, particularly when you consider the impact of extortion on haulage businesses,” he said.

On the likelihood that operators may adjust rates to match the increasing running costs, Ogungbemi said that haulage operators had even before the increase in the cost of fuel been contemplating on how to achieve a standard rate for haulage at the port.

He said, “The problem with the adjustment of freight rate now is that there is low demand, and it is demand that determines the cost. Currently, there is always someone who is ready to do the job for less in order to earn a living.

“But when demand is high, it will be easier to increase haulage costs. Notwithstanding, consultations are ongoing to see how truckers at the port can come together to decide on how to have a standard rate.”

Adeshina Ajibola, another haulage operator, who noted the rising cost of fuel, particularly diesel, said the price of diesel had been unstable in recent weeks, rising by over 90 percent from about N300 per litre in late January to N650, N700 and N800 per litre, depending on the location or the marketer.

Ajibola, who described the current hike in the price of diesel as ‘price disruption’, told BusinessDay by phone that the rising price of diesel had increased the cost of running haulage business, particularly in Nigeria’s port environment.

Read also: ‘Maritime sector has suffered neglect despite its ability to stimulate the economy’

According to him, the development is eating into the bottom-line of port haulage operators such that many have either sold off their trucks or closed shop for lack of capital capacity to sustain the rising cost of operation.

Beyond the cost of fuelling the truck, Ajibola said the cost of spare parts for maintaining the trucks had also skyrocketed since the rise in the exchange rate of the dollar to naira.

“A unit cost of a truck tyre is now sold at an average of N150,000 for one, depending on the brand, and when you multiple by units that a truck has, which in most cases is above 12, one can imagine the amount. We are also dealing with issues of extortion by members of the traffic enforcement team, and even thugs and touts mount checkpoints along the port access roads to demand illegal tolls,” he said.

On whether the haulage operators are considering the idea of adjusting freight rate in line with the economic reality, he said the operating environment and the disruptive nature of the price of fuel had made it difficult for operators to adjust the rate.

“Though adjustment in rate will only add to the already high inflation, which currently stands at over 15 percent, operators who are able to withstand the shock, will at the end, find the need to adjust the rate if the current rate fails to cater for the overhead,” he added.