Market News

By Adaku Onyenucheya

The long-awaited standard gauge expected to provide the needed alternative to the movement of cargo on the road to solve the persistent gridlock around the Apapa seaports will kick off operation before the end of this quarter.  

  The rail is expected to aid the evacuation of cargoes from the ports, facilitate export, reduce gridlock on port access roads and curb the huge revenue losses to the bottlenecks at the ports.     The project, which is being executed by the Nigerian Railway Corporation (NRC) and AMP Terminals, is designed to run alongside the existing narrow gauge from the Apapa Seaport to the NRC terminal at Yaba.     It is projected to deliver 500 wet and dry cargoes daily. This is expected to reduce the volume of cargoes moved on roads.       The Director of Operations, NRC, Niyi Alli, said the narrow gauge rail line has been functional while the standard gauge, earlier delayed by the COVID-19 pandemic, would make a significant change in the volume of hauled through the rail.   

Alli said the two railway lines would increase the efficiency of the delivery of goods from and to the port, adding that the NRC is hoping to move about 500 containers by rail daily when the project is completed.    He noted that once transportation efficiency would crash the prices of goods in the country.   He explained that the NRC is working with the Nigerian Shippers’ Council (NSC) and the Nigerian Ports Authority (NPA) to reduce inefficiencies at terminals. Part of the plan, he said, is to ensure that the trains leave the port an hour after arrival.   Recall that African Centre for Supply Chain (ACSC) practitioners had disclosed that congestion at the Nigerian ports was negatively impacting Nigeria’s gross domestic product (GDP) and that the country loses $14.2 billion to the challenge yearly.

The electronic call-up system, which commenced operation recently amidst tall expectation that it would end the Apapa gridlock, has experienced multiple setbacks with some stakeholders alleging sabotage.     On how the expected rail operation would affect the electronic call-up system, Alli said it would not take the whole market. He envisaged 4:6 sharing formula in favour of roads.     “The electronic call-up system will still be there, we are going to complement each other. What you will find is that the ease of doing business and transportation would be greatly enhanced because we won’t have all the drivers come into the port anymore, so Apapa will become a beautiful place again like it used to be,” he stated.     On the cost of moving cargoes, Alli said: “We don’t have a set price template. But obviously, the market forces will eventually determine the charges. We have to be competitive as road operators are in the market.”

APM Terminals Apapa and NRC had last year announced the restoration of rail service for the evacuation of containers from the Lagos Port Complex Apapa as part of efforts to decongest the port access roads.

    They developed a new Standard Operating Procedure (SOP), which was facilitated by the Nigerian Shippers Council (NSC) to bridge the communication gap and ultimately lead to more efficient cargo evacuation by rail.         Under the new arrangement, containers will be discharged at Alagomeji terminal in Yaba, Lagos, and Ijoko Terminal in Ogun State while trucks would be deployed to both locations to collect the containers and return empty, which the NRC will convey back to the port.     Besides, port operators have expressed hope and fears about the reality of the rail service as they await its full operation.

The National President, African Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Frank Ogunojemite, clamoured for rail for years, adding that an efficient multimodal system will help ease the transportation of cargoes and reduce pressure on the roads.

     He said while the railway is still under construction, putting it to use would promote port efficiency, reduce the gridlock and increase the lifespan of the roads while reducing road accidents.      Ogunojemite said if used properly, the turnover would be rapid. He said while it takes two-three weeks to deliver a container to other parts of the country by road, rail would spend a few days to get to any part of the country.      He, however, noted: “I believe that there are some cabals that may sabotage the efforts because they make money from the trucks on the roads. When the rail begins to work, efficiency will go up while the cost will reduce. They will not be able to extort anymore. Around December and January, the cost of taking containers just from the port to the Lagos mainland was over N1 million,” he said.

The President of Shippers Association, Lagos State (SALS), Jonathan Nicol, recalled that the rail facility was very active and efficient in the 1970s and 1980s but that lack of interest in the development of ports killed the system.    The National Deputy President, Air Logistics, the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Segun Musa, said Nigeria can never experience effective trade facilitation or clearance of cargo without the support of the rail sector, which essence is to facilitate movement of import and export goods in and out of the port.    He said, while the railway will reduce the cost of clearance and facilitate cargo clearing at the ports, there is a need to put the railway into proper use to build up the Inland Container Depots (ICDs) that have not been functional.

Musa said this will enable consignments to be rolled down to ICDs in the northern and eastern corridors, where owners of the consignments would go to clear their cargoes instead of coming to Lagos State to clear them, as it would reduce the cost of delivery of the cargo.      “This railway will help reduce the cost of transportation of consignment. Haulage is not meant to deliver cargo to any distant area, the essence of haulage is to distribute cargoes within and that is why we have not been having an effective transportation system in the delivery of cargo because there is no way you can use haulage and get it at a reasonable cost or faster.    “Railway is very cheap, it carries a high volume of cargo from one point to the other, so the function of haulage is to compliment the effort of the rail sector in the distribution of cargo.   “We are hopeful that the government will not only link the rail line to NPA, APM terminal, and NRC but will also give space for trans-loading and also get us enough coaches that can pick containers, vehicles, general cargo from the port to final destination,” he said.

Musa said when the rail line is put into proper use, it would reduce the gridlock as there won’t be a need for haulage, adding that while the rails can take over 50 containers at once, about 50 trucks would be taken away from the road per day.   “The essence of haulage waiting on the road would reduce because more of the containers – we have about 5, 000 containers to move out of the port in a day and the rail has taken almost 3, 000 definitely, we will be needing fewer trucks to take the remaining 2, 000.      “The main cause of the gridlock is because we don’t have enough space in the port for most of those trucks to go in at the same time to load their cargo for delivery. The space in the port is so small and when you have to allow a large number of haulage to come inside, it brings congestion within that corridor, which is not limited to bad roads.      “Now if we have an effective rail system, we will have lesser trucks on the road, especially with the effort of the call-up arrangement for haulage, it will reduce the number of trucks on the road,” he added.

The National Coordinator of Save Nigeria Freight Forwarders, Importers and Exporters Coalition (SNIFFIEC), Dr. Odita Chukwu, said the railway system would expedite movement by creating seamless container movement and drastically reducing to minimal the containers that go up the country.   He said while there are 50 trucks to transport containers on the road, thereby creating gridlock and congestion at the port corridors, the railway will take up those 50 containers at a stretch.

 “Why most of the vessel stay in anchorage is because they did not see space to drop the container they have, that is why you see them lying at the anchorage till the permit comes for them to come into berth. If consistently the rail officials maintain the status quo and continue working effectively, you will see that nothing at all will disturb the system.       Chukwu called for the sustainability of the rail line, adding that the management of the railway should be handed over to private partners for it to be maintained and serviced adequately for it to last for a longer period.

National President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said what causes our roads to be destroyed is the wet cargoes, stating that experts should be contacted while the railway is being developed.      “Heavy tonnage destroys the road. The railway is made for heavy cargo/tonnage and it is faster, cheaper, better, and safer. The rail will move most of the cargoes from the road especially the wet cargo, those are the heavy cargoes we have to move from the road to the rail,” he said.      Amiwero said if Nigeria must achieve a proper transportation system in the movement of cargoes, the railway system distribution level should be taken to the hinterlands where the North and East can benefit from it, rather than a short distance from the port area to neighbouring environs within the west.    “We must look at the distribution level of the rail, it is not just to build rail, there must be a utility programme of that rail. If you are taking rail from Lagos-Kaduna or Lagos-Kano, then it can supply the Northern area, what we have now is the same rail system within the western zone. It is so short. When you look at people who have cargoes within the port, most of them transport it to the North.

“The advantage of rail will be better when it is linked to Kano, Kaduna and it can supply the corridors within the North, that will be an advantage and they are land lock zones because they don’t have ports,” he said      Speaking on the cost, Amiwero said: “Moving cargoes by road is more expensive because of the complexity we have within the port area where we have human interference and involvement in trying to see how they can fill their pockets.”      Amiwero expressed fear on the durability of the trains that would be used for the service, while charging noting that the trains should not be acquired, saying: “China products are not too good and Nigeria believe in using their product.”

Speaking on displacing trucks out of the road, Former Vice-Chairman, Nigerian Association of Road Transport Owners (NARTO), Lagos State Chapter, Abdullahi Inuwa, said the railway system would not put truck drivers out of job, but would rather improve the transportation sector and create more jobs for truck drivers in other regions of the country away from the port.    “The railway will not affect the truck drivers, it would rather improve the transport sector. What this means is that the movement of trucks to long distances would reduce because some of the truck drivers that are far away from Lagos would drive down to the nearest railway station to pick the containers to the final destination.   “That is, the railway will reduce the influx of trucks coming down to the port environment, as most consignments are taken to the northern and eastern part of the country. It will create another job for some of our members within that corridor. It would also reduce their stress of coming down from the north to the port in Lagos to cause congestion,” he said.