$100m shipping surcharge, others imminent over Apapa shutdown

April 11th, 2018

fromA�Anthony Nwachukwu,A�Lagos

With less than 40 per cent of the cargoes able to leave the Lagos ports due to the present state of the Apapa roads, the Seaport Terminal Operators Association of Nigeria (STOAN) has warned of over $100 million in shipping lines surcharge should there be a total closure of Wharf Road as planned.

A�A�A�Economic implications also include a force majeure, especially on their contractual obligations of throughput and other fees to the Nigerian Ports Authority (NPA), as well as commitment to shippers and shipping lines, among other stakeholders.

A�A�A�The warning followed the announced plans by A.G. Dangote Construction Company Limited to close both sides of the Wharf Road for four weeks, just as the Federal Ministry of Power, Works and Housing wants to shut the Marine Bridge for permanent repairs at the same period.

A�A�A�With the Mile 2-Tin Can-Wharf axis dilapidated and almost impassible, the total shutdown of the only other route into Apapa will also mean a total shutdown of operations by the four seaport terminals at the Apapa Complex, namely APM Terminals, ENL Consortium, Apapa Bulk Terminal and Greenview Development.

A�A�A�According to the terminal operators, the simultaneous closure of Wharf Road and Marine Bridge will spell economic doom through a build-up of cargo inside the port and ultimately, congestion.

A�A�A�a�?While we commend the efforts of the Federal Government to address the issue of bad roads and the poor state of the bridge, the closure of both roads at about the same time will cause serious problems to the ports, especially the Lagos Port Complex, Apapa, and the Tin Can Island Port,a�? STOAN said.

A�A�A�a�?The bridge and the Wharf Road are the two major entry points into Apapa and shutting down both will mean cargoes will be trapped inside the ports. The implication is that there will be a build-up of cargoes at the various terminals and port congestion will inevitably set in.

A�A�A�a�?In no time, vessel queues will return. Once vessel queues return, shipping lines congestion surcharge, which could amount to as much as $100 million per month, could be slammed on Nigerian ports and this cost will ultimately be borne by the market.a�?

A�A�A�It suggested instead that the repairs be done one after the other and alternative routes opened before any is shut, as a�?failure to create alternative routes before the major repair works begin will create major crisis in the ports.a�?

A�

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