Port and landside congestion the big issues facing West Africa container trades

London, 13.01.2015 – West Africa ports could face even greater congestion pressures from the cascading of larger container vessels into the region’s trades, delegates were told at the TOC Market Briefing: West Africa, which took place in Tenerife on 10-11 December.

Michel Donner, Senior Advisor at Drewry Maritime Advisors, told the conference that mega container ships have implications for all ports, not just those on the Asia-Europe route. As many as 61 ships of between 8,000 TEU and 11,000 TEU are likely to be cascaded into other trades in the next 15 months, so the market is speculating as to where these are likely to go.

Mr. Donner believed that as soon as two or three West Africa ports are able to handle larger vessels, more will “swarm to the region”, although they may not necessarily be operating on maximum draft.

The bigger the ship…

However, several speakers noted that the West Africa region faces potentially greater congestion issues than other regions that will also attract larger and larger ships. West Africa’s ports are almost entirely dependent on road transport, therefore the bigger the ship the more severe the landside congestion in the surrounding cities.

Delegates heard that it was not uncommon for container ships to spend several days at anchor awaiting berths, and a further week discharging and loading. Olaf Merk, Administrator Ports & Shipping at the OECD, referred to thousands of trucks bringing gridlock to West African cities as they await containers that may not have even arrived at port, given the poor standard of communication between stakeholders.

In fact, Mr Merk described West African facilities as probably “the least efficient of all global terminals”.

UASC Agencies line manager for Nigeria, Marcus Brinkmann, said that Nigeria suffered the same problems as other West African nations: an erratic supply of electricity and chronic road congestion.

Nonetheless, the construction of hub ports was thought by many speakers to be the only solution to coping with this potential flood of containers attracted by the region’s growing demand.

Mr. Donner added that by 2020, terminal projects in West Africa could provide deepwater capacity for an additional 11.5 million TEU a year. All these projects have draft of at least 15m and are aiming at handling vessels from 7,000 to 19,000 TEU.

Landside issues

But even if all of these hub port projects come to fruition, significant challenges remain outside the port gates.

Ziad Hamoui, President of Ghana-based Borderless Alliance, said various studies show that transport and logistics costs in the West Africa region are among the highest in the world. In fact, transport prices for most African landlocked countries range from 15–20% of import costs, which is three to four times higher than in most developed countries.

Key trade challenges include not just long delays at ports and borders, but inland transit corridors can be subject to constant harassment, mainly from uniformed services, and corruption is a serious problem in moving cargoes both within individual countries and particularly across national boundaries.

Agricultural products are subject to persistent tariff and non-tariff barriers, he said, while inefficient Customs procedures, ‘non-authorized’ checkpoints, and unduly high taxes and levies even on certified non-dutiable goods add to the problems facing expeditors.

Moussa Diop, Commercial Director for Inland Services West Africa at APM Terminals, described the opportunities represented by a rapidly expanding and urbanizing sub- Saharan population, and the urgent need for significant infrastructure investment in both port and inland logistics to satisfy the projected demands of some of the world’s fastest-growing economies.

Citing a recent African Development Bank (ADB) report on African trade, Mr. Diop pointed out that while shipping a 40ft container from Shanghai to Mombasa, Kenya, costs less than US$1,000, moving the same container from Mombasa to the city of Bujumbura, in Burundi, in Central Africa, a distance of approximately 2,000km, costs US$7,000. While the sea voyage from China to Kenya takes 28 days, the roadway journey by truck from Kenya’s primary port into land-locked Burundi requires 40 days.

“The key to success in Africa is integrating port capacity with inland access,” he said. “It is critical to establish inland capabilities and operations that serve adjacent and hinterland markets, including dry ports and cargo depots. Effective intermodal transportation and inland services involves logistics, trucking, stevedoring, warehousing, storage, cargo handling, storage, container depots and refrigerated container operations. Our goal is to apply our expertise and inland network to solve supply chain bottlenecks and thereby boost trade,” Mr. Diop added.

ENDS