$1.5bn Lagos-Ibadan cargo rail: Seaport charges reason why importers opt for road, barge haulage — NRC

The Nigerian Railway Corporation (NRC) has said that additional seaports charges slammed on cargoes by terminal operators at the Apapa Port is a major reason why importers opt for road or barge haulage of their cargoes instead of rail haulage.

Speaking at the weekend in Lagos during a One-Day Stakeholders Sensitization Summit on Limitations To Rail Transportation of Cargo In Nigeria which was organised by the Nigerian Shippers Council (NSC), the NRC Director of Operations and Commercial Services, Mr. Akinwunmi Oshinowo explained that if those seaport charges can be removed, more cargoes will be moved by rail from the Lagos port.

According to the NRC Director of Operations and Commercial Service, “The only port we are connected to as of the moment is Apapa Port. We are not connected to Tin-Can Port, Lekki Port, Onne Port and Warri or Calabar Port.

“For cargo haulage from the ports to the hinterland, there are incidental charges hampering these services. This is one of the areas we expect the Nigerian Shippers Council (NSC) to help us look into and stop because these costs are not allowing cargoes to be moved by rail from the Apapa Port efficiently.

“In the logistics chain, people often forget that movement of goods in one stage affects the other. Many of our customers at the ports are always telling us that our services are too expensive, that we must bring down the cost of cargo rail services at the APM Terminals in Apapa Port.

“But we have tried to explain to many of our customers that the rail component of cargo clearance is one of the cheapest around compared to other modes of cargo evacuation. What is affecting rail haulage of cargoes at the port is a double handling cost and an extra charge that is slammed on cargoes by the terminal operator at the port.

“At Apapa Port, APM Terminals charges a fee for loading cargoes on the rail. Also when the train gets to its destination in Ibadan or before Ibadan, there is a fee also charged for the offloading of these containers.

“The problem is that the NRC does not have control over the charges slammed at both ends of the rail logistics chain. We don’t have control over the loading cost inside the Apapa Port and also don’t have control over the offloading cost at the destination end of the logistic chain.

Again, inside the Apapa Port, there is an extra charge for rail bound cargoes that doesn’t apply to road or barge haulage of cargoes. The extra charge is slammed on the rail bound cargoes by the terminal operator at the Apapa Port.

“We have asked several times, why put an extra charge on rail bound cargoes and exempt road or barge haulage from such charges? This is one of the things we have asked the Port Economic regulator, the Nigerian Shippers Council to look into. These are part of the things that build up to the cost of clearing cargoes out of the port via rail haulage.

“Late last year, when we were wrapping up the standard gauge rail construction, we had a meeting with the port stakeholders on these issues because for the customers who own the cargoes, it is about minimising cost during cargo clearance.

“We told the port stakeholders that the cost that they are adding to rail haulage of cargoes is making cargo evacuation by rail unprofitable. There is no way we can drop the price for rail haulage beyond the least reasonable rate because we must factor in diesel purchase in our operations. Government does not give the NRC funds to buy diesel, we source for diesel from whatever we make during rail haulage of cargoes.

“The cost of diesel has gone up about five times to what we used to buy. Other things we use like spare parts and engine oil have also gone up. Most of the spare parts that we use are imported, so we always consider forex issues when ordering for these spare parts.

“But unfortunately, after the meeting, nothing has changed. The charges are still being slammed on rail bound cargoes and this is what we want the NSC to help us look into as Port Economic regulator.”