• Severe congestion disrupts supply chains at Nigeria’s major seaport

    11 March 2020

    On February 10, berthing times for vessels anchored at the Port of Apapa in Lagos, Nigeria’s major seaport, peaked at up to 42 days. While congestion in the port area has been a long-term issue, it significantly intensified after the government reached a unilateral decision to indefinitely close its land borders on October 14, 2019, forcing more carriers to enter Nigeria via its main seaport instead.

    Several governmental agencies have tried and failed to impose measures to decongest the port area since the beginning of 2019, including the Nigerian Port Authority (NPA), the Lagos State Government, and the Federal Government. For instance, a presidential decree ordering transporters to vacate access roads to the port fell on deaf ears in May 2019. In the latest attempt to decongest the area, the NPA announced new emergency measures in January 2020. Since January 27, vessels are to be diverted to other terminals or nearby ports if they cannot be served at the Lagos Port Complex within four days. However, data on berthing times collected by Resilience360 suggests that the measure had no significant effect so far since its implementation.

    Source: Resilience360

    Neither the port’s long-term infrastructural and operational problems nor the closure of Nigeria’s land borders are expected to be resolved in the near future. However, those shipping to Nigeria and Western Africa via Lagos have several short- and medium-term solutions at their disposal to mitigate the impact on their regional supply chains.

    Longstanding operational and infrastructural problems cripple port activities

    The Port of Apapa in Lagos, also known as the Lagos Port Complex, is Nigeria’s biggest and busiest port complex and one of the major gateways into West Africa, handling over 80 million tons of cargo per year. However, the costs of doing business via the port complex have risen significantly in recent months due to ever increasing congestion.

    The main reasons are the perpetually congested access roads caused by trucks parked along the roads, lack of holding and parking bays for trucks, the absence of a functioning rail connection, and additional traffic due to factories located in the port area. The port also suffers from faulty cargo-handling equipment and corruption among law enforcement agencies, customs officials, and transporters who take money from truck drivers in exchange for expedited access to the port area.

    Long delays at the Lagos Port Complex have already disrupted the shipping schedules of operators such as Hapag-Lloyd, Maersk, and Safmarine, forcing them to adjust delivery schedules in some cases. Nigeria is also facing significant economic consequences due to the ongoing congestion. The Lagos Chamber of Commerce and Industry estimates that Nigeria may lose profits amounting up to five percent of its GDP per year, while the Abuja Chamber of Commerce and Industry warns of impacts for businesses across Nigeria as costs of moving cargo in and out of the country continue to rise. It also pointed to the possibility of Nigeria losing business for good if those doing business in the region decide to permanently reroute their shipping lines to less congested ports in neighbouring countries such as the Port of Lome in Togo.

    Adjust shipping routes and schedules to mitigate congestion impact

    As short term measures, such as replacing faulty equipment and firing corrupt officials, have failed to decongest the port, authorities are now intensifying efforts to fix the long-standing infrastructural issues. Reconstruction of several access roads as well as a railway connection within the port area are ongoing but are expected to be completed by the end of 2020 at the earliest. Authorities have also started work on improving other Nigerian Ports such as the Port of Onne, Ikorodu Lighter Terminal, and Warri Port to take pressure off of the Lagos Port Complex but slow construction processes have hampered this initiative.

    While congestion varied in intensity over time, it is unlikely to cease in the foreseeable future as the government struggles to address its underlying causes. As a solution, some operators have started to move cargo out of the port area using barges and tugboats, traveling along Nigeria’s inland waterways to reduce waiting times. However, only a limited number of licenses have been issued to barge operators to move cargo out of the port area by barge so far and those are already in short supply due to high demand. Others chose to reroute some of their ships to other Nigerian ports nearby. However, this is often only an alternative for smaller barges as ports such as the Ports of Calabar, Warri, and Rivers are not yet deep enough to accommodate larger ones. Security concerns due to piracy also remain a problem in some parts of Eastern Nigeria.

    Supply chain managers should get in touch with their freight forwarders to coordinate schedules for current shipments passing through the Lagos Port Complex and make adjustments to accommodate longer waiting times in Lagos. Those using Nigeria as a gateway to the wider region are also advised to consider rerouting their cargo to less congested seaports in neighboring countries, such as Togo or Benin, and subsequently move their goods across the continent via road.

    * = Mean Value
    Week 45, 2019 = 13 – 16 Days
    Week 47, 2019 = 12 – 14 Days
    Week 50, 2019 = 20 – 25 Days
    Week 51, 2019 = 21 – 28 Days
    Week 1, 2020   = 15 – 28 Days
    Week 7, 2020   = 32 – 42 Days
    Week 8, 2020   = 33 – 40 Days
    Week 9, 2020   = 36 – 37 Days
    Week 10, 2020 = 39 – 41 Days

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