The Hub

April 14, 2016

Just before the next Armada

Just before the next Armada

By Josef Omorotionmwan
NCE beaten twice shy. Like the Word of God, history is forever settled and the sooner we begin to live by its tenets, the better for humanity.

Nigeria is today going through hard times, particularly as a result of the lingering fuel scarcity throughout the country. All the same, our prediction here is that the worst is yet to come.

What we have now is strictly not fuel scarcity – where the product is still available, even if the price is gradually pointing towards the N400 per litre mark. The biting scarcity is defined by that final moment when the product is not available at all; but you look up to the high sea and, all you see are very many ships laden with the product, unable to berth. This phenomenon in Nigeria is called port congestion.

Meanwhile, in just the same way that the sea has been clogged up with incoming ships, every available land space within the vicinity of the port is also clogged up with trailers and tankers that have come ostensibly to convey the same unavailable products – unable to move forward or backward. Everywhere is locked up and there is no product! There is an armada.

The dictionary meaning of armada is a large number of ships that move together. History is replete with cases of armada whose missions end up rather disastrously albeit the leaders had very noble intentions; hence some have come to the conclusion that the armada is a failed altruism.

With just a little push, we see in Lagos, a port congestion of unimaginable magnitude, waiting to happen.

We are quickly reminded of the “Cement armada” of the early 1970s. Nigeria had just emerged from a bitter civil war and needed lots of cement to embark on reconstruction efforts.

What the military administration of the time did was to issue import licenses to every Tom, Dick and Harry to bring cement into the country.

Before we knew what was happening, over 450 ships laden mainly with imported cement and general goods were stranded at the Lagos anchorage, awaiting berthing space for months on end. Some of the ships ended up waiting for upwards of 180 days before setting on their way and freight surcharges ranging from 30% to 100% were incurred by many parties.

At the peak of the congestion, Brigadier Benjamin Adekunle, (aka Black Scorpion) was appointed Port Commandant to try to introduce some semblance of order into the hopelessly confused situation.

That was the genesis of port congestion in Nigeria. Since then, there have been other cases of congestion, including the current one that has been lingering since 2008.

Today, most streets and roads in Apapa area and, indeed, the entire Lagos Metropolis, are still saturated with heavy-duty trucks waiting to load commodities.

Propelled perhaps by the spirit of altruism on the part of the current administration, it is now commonplace that some 36 ships laden with petroleum products and general merchandise are already on their way to Lagos. To be forewarned is to be forearmed. It is our hope that adequate containment plans have been put in place for the expected cargoes. Hopeless port congestion is the least that Nigeria desires today.

The problems associated with port congestion are many: apart from a very long queue of ships waiting to berth, congestion is also marked by container- and general cargoes block-stacking; more movement of containers to off-dock facilities; frantic search by agents to locate their consignments, hectic time to position goods for inspection; difficulties at the customs desk; problems with trucks and traffic jams at port entrances and immediate port environment; rowdiness of port workers; and lots of pressure on those operating the terminals.

There is no magic wand in all these. Failing to plan is planning to fail. Importation of goods far in excess of the installed capacity of the ports is a direct invitation to the emergence of port congestion. This case showed up in the cement armada of the early 1970s, when we placed order for 20 million tonnes of cement needed for post-war reconstruction; and we wanted all delivered within 12 months when the total capacity of all the ports in Nigeria at the time was barely 6.5 million tonnes per annum.

Again, the lack of rail transportation is a serious impediment to the clearance of goods from the ports to off-dock facilities or to inland container terminals. In essence, rail wagons that could easily convey bulk liquid cargoes and containers out of the seaports are not there and the heavy burden simply falls on trucks, a bulk of which are shaky and poorly maintained.

Have we really sat down to consider the debilitating effect of port congestion to the national economy? First, there is the loss of income by stakeholders, public and private. For the clearing and forwarding agents, when their containers cannot be found, they lose their handling charges.

Disputes and associated legal costs are inherent in port congestions when parties to a contract fail one way or the other to meet arising conditions.

For example, if a shipping line agrees to divert its ship from Lagos to Port Harcourt, most consignees will object to such diversion. The reason is simple – if equipment meant for a factory located in Lagos or Abeokuta was being shipped in the diverted ship, who pays the cost of conveyance back to Lagos or Abeokuta from Port Harcourt? This is the type of added question that port congestion brings about.

Lest what was intended as a plus turns a deadly minus, we must quickly sharpen our containment plans for a looming petroleum armada. And in the long run, industrialization remains perhaps the only panacea for port congestion; when we shall curb our appetite for imported goods and tackle squarely the issue of infrastructure, particularly power supply, because no economy ever thrives on generators, we shall then import only what must, of necessity, be imported; and port congestion will be put permanently at bay.