Recently, some private jetties began the movement of empty containers from port channels near Tin-Can Island port in Lagos to undisclosed points in Cotonou and Lome ports, raising outcry from importers that the port reform regulation of 2006 is being flouted. In this report, TOLA ADENUBI digs deep to unravel why Nigeria has new entrants in container handling business. Excerpts:
The 2006 port reform agreement was signed between the Federal Government, represented by both the Nigerian Ports Authority (NPA) and the Bureau of Public Enterprises (BPE) with the terminal operators (private investors) who now operate under the name Seaport Terminal Operators Association of Nigeria (STOAN). The agreement restricts handling of containers that arrive Nigerian ports to the terminal operators. However, prevailing development at the nation’s ports have meant that other parties have ventured into container handling.
Why jetties now handle cargoes
For some shipping companies, the involvement of private jetties in cargo handling business is a strategy deployed to save importers from unnecessary loss of funds that is lost while containers are waiting to be returned back to the ports. Speaking exclusively with the Nigerian Tribune, Acting Chairman, Shipping Association of Nigeria (SAN), Mr. Andrew Lynch, explained that the decision to use some jetties to move empty containers to neighboring ports of Cotonou was arrived at in-order to beat the congestion inside the ports.
According to Mr. Lynch, “I am aware that some barges went from KiriKiri to Cotonou with empty containers. They did so many times, so I can only assume they had necessary permissions both in Lagos and Cotonou to operate.
“I do find it ironic that some of the same port terminals that rejected empty containers being returned to them (empties that they had previously enjoyed as high paying full imports) which led to so much traffic congestion and high cost for the container owners are now complaining the empties are bypassing them.
“If the port terminals/concessionaires did not restrict empty container returns, no one will look to barge empties out of Lagos port, which is very expensive to do.”
Also buttressing Mr. Lynch’s view, an official of one of the private jetties being used to move empty containers to Cotonou from Lagos explained that the move has already helped in relieving the ports of its chronic congestion.
In the words of the private jetty official who wouldn’t want his name in print as he is not authorized to speak on the matter, “The move to move empty containers via some private jetties was arrived at when the port terminals were rejecting return of empty containers due to insufficient yard space.
“Most of the terminal operators were battling to take in more empty containers due to lack of yard space, and in the process, importers were losing money because while trying to return empty containers into the already congested ports, they lose all their Container Deposits Fee (CDF) paid to the shipping companies as collateral to return the containers.
“So, in order to help importers recoup their deposits, the shipping firms came up with the idea of moving empty containers via some private jetties. What happens is that instead of the truckers driving straight to the ports where they have to wait for weeks and months because everywhere is filled up, the truckers head straight to the jetties where the empty containers are loaded on barges and moved straight to Cotonou where some shipping companies have terminals where they manage or operate; and from there, the empties are returned, thereby saving importer money that would have been lost while waiting to return same empty containers through the already congested port terminals.”
NPA at a crossroads
Prompted by the news that some unlicensed jetties now carry out container handling businesses at the ports, the NPA on the 3rd of February, 2022 summoned the Shipping Association of Nigeria (SAN), a body of shipping companies who bring cargoes to Nigerian ports.
According to impeccable sources who attended the meeting, the NPA became helpless given the dire straight of conditions inside most port terminals and the fact that Nigerian cargo owners are losing their cargo deposits due to this situation.
“The meeting between the NPA and the SAN executives was centered on why some empty containers were leaving the country via private jetties that had not been originally approved to carry out such logistic role at the ports.
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“However, when the SAN executive told the NPA Acting MD that Nigerian cargo owners are losing billions of Container Deposits due to their inability to promptly return empty containers back to the ports as a result of congested port terminals, the NPA Acting MD became helpless.
“Also, the SAN executives told the NPA acting MD that the move to bypass the already congested port terminals and move empty containers through jetties onto barges has started helping importers to recoup their Container Deposits.
“With this explanations, the acting MD simply couldn’t ask the shipping lines to jettison the idea. It became a case of either maintaining regulation at the expense of Nigerian importers or relaxing regulation in order to reduce the loss incurred by importers. If the acting NPA MD asked the SAN executives to stop moving containers through jetties and revert to the port terminals, importers will lose their Container Deposits because the port terminals are over stretched and lack enough space.
“So, the shipping companies were admonished to ensure full regulatory compliance inside the private jetties just as it exists inside the port terminals. The NPA was forced to make though with this decision because the port terminals are filled up. Nigerians are losing billions of Container Deposits because truckers cannot return empty containers back to the ports.
“The move to bypass the port terminals and move empties through the jetties is really helping importers to recoup their Container Deposits as more empty containers are being loaded on barges and moved to neighboring ports of Cotonou and Lome,” a port official who attended the meeting between the NPA and the SAN told the Nigerian Tribune exclusively.
Recall that the Nigerian Importers Integrity Association (NIIA) recently called on the NPA and other relevant agencies including the Nigeria Customs Service, National Inland Waterways Authority (NIWA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) to halt the activities of unregulated private jetties and oil service centres that have converted their facilities to container terminals.
The President of the association, Godwin Onyekazi had said some private jetties operating on the Kirikiri channel and oil service facilities now engage in handling containers.
He said, “Hundreds of empty containers are loaded from unlicensed jetties on the Kirikiri channel onto big barges which then discharge these containers in neighbouring countries. It is not clear who licensed these barge operators and the jetties if these barges and jetties are registered with all relevant authorities and finally if they are paying the statutory dues to NPA and all other governmental agencies.
“Only port operators, concessioned by the Federal Government through NPA can engage in container handling operations. Loading of empties from any other facility is illegal and should be investigated.
“The jetties in question are now illegally operating as container terminals. Empty containers are loaded from the sub-standard jetty in Kirikiri on barges and sail straight out of Nigeria to the ports of neighbouring countries, especially to Cotonou and Lome ports.”
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