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How can we solve port congestion in Nigeria?

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CPCS | February 12, 2020

A type of truck ‘appointment’ scheduling system may be exactly what Nigeria needs to avoid another cashew debacle at its ports

  • 6,000 idle trucks queuing up at the ports at all times
  • Congestion costs Nigeria US$19 billion a year
  • Scheduling tool can save up to thousands per truck

A clog to growth

Bloomberg reported in 2018 that more than 50,000 tons of cashew nuts worth US$300 million festered in container trucks while waiting to enter the Lagos Port Complex. The delay put a damper on the seasonal export target of 260,000 tons and left local cashew farmers without any contract money to work the fields.

Truck gridlocks leading to massive economic losses like the cashew debacle are not uncommon in Nigerian ports. The Lagos Chamber of Commerce and Industry estimates that truck congestion in ports is responsible for losses of US$1.65 billion in customs revenue and US$6.9 billion in corporate earnings every year.

Add illegal charges and safety hazards to the mix and the country stands to lose US$19 billion at its ports. That’s 5 per cent of the gross domestic product.

“Solving the port congestion problem can do wonders for Nigeria’s economy and improve the quality of life for Lagosians,” says Vivek Sakhrani, transportation expert at CPCS. “It would free up time and resources to tackle other issues such as health and education.”

Numbers tell a clear picture 

CPCS estimates that an average of 16,000 container trucks comes in and out of Lagos every day.

Around 6,000 of them queue up at the Lagos Ports Complex at any given time. On average, a truck spends two to six days in queue. Congestion of this scale means that only 1 truck in 5 transacts business on any given day.

Congestion outside the port area is problematic too. Our research shows that trucks average less than 30 km/h in their first or last leg of the trip. This leg alone costs shippers around US$400 per truck.

“Given that Nigeria is a fast growing economy, it’s likely that congestion will get worse if nothing is done,” believes Vivek.

How to free up congestion at the ports?

Nigeria is eager to clear up its bottlenecks. However, current efforts have yet to bear fruit.

The country has been trying to promote rail transportation to relieve pressure at the ports. But here’s another obstacle: Nigeria’s 3,505 kilometre-long rail network hasn’t kept up with the times since inheriting it in 1960.

Rail service in Nigeria is currently a work in progress; it cannot serve as an alternative to road shipping just yet. Efforts in expanding the railway are not the short-term solution the country needs.

Another idea is to improve road infrastructure: widening the roads around the port area and fixing potholes breaking traffic flow. The problem is that construction will disrupt traffic movements and just intensify current conditions. According to some experts, better roads just mean even more trucks for the next four or five years. 

Opening up other ports in Nigeria to reduce activities at the Lagos Ports Complex is off the table as well. These ports currently cannot accommodate the bigger ships that regularly dock at the Lagos Ports Complex.

Turning to Information and Communications Technology (ICT) 

“Given the lack of immediate solutions, the best way to go for now is ICT,” claims Vivek.

Information and Communications Technology (ICT) is a quick win at Nigerian policymakers can consider.

Currently, container trucks queue up for miles as they wait for port authorities to call them up to load or unload merchandise. As one truck is mobilized, the others idle on the expressway waiting for their turn.

Here’s the kicker: trucks don’t need to wait on the road and obstruct traffic. What if they can be parked in a lot and mobilize only when needed?

A Truck Appointment System (TAS) makes all this possible. It’s a remote and automated scheduling tool that calls up trucks at port gates only when they have confirmed appointments to do business.

With a large parking lot to accommodate idling trucks, the TAS can free up roads around the port area. It can also and save time and money and reduce greenhouse gas emissions.

Port of Manilla: A success story

Our research on the Port of Manila in the Philippines shows that a TAS really works. Since implementing the scheduling tool, the Filipino port has increased business transactions by 25 per cent during peak periods and reduced truck idle time from 130 minutes to 100 minutes. Better, this progress was made without a parking lot.

In other words, Nigeria can reap even greater gains to the extent it can provide a sufficiently large parking lot.

We expect the TAS to reduce the length of business transactions for each truck, saving roughly US$1,200 per truck. Swifter operations also promise to save at least one million tons of greenhouse gas.

The best part about the TAS? It’s easily the most cost-effective compared to other infrastructure options. Basic ICT equipment is sufficient to support the service. It also helps that Nigeria already has a large area that can be readily converted to a parking lot on Tin Can Island, which is right next to the Lagos Ports Complex.

“It makes perfect sense from a logistic and economic point of view,” says Vivek. “But it’s up to port management to develop and enforce the regulations.”

Looking ahead

Among all the potential solutions the Nigerian government can carry out, the TAS is the quick fix with the biggest immediate payoff.

This is not to say that Nigeria should let up its efforts modernizing its railway networks, roads, and ports. These infrastructure sectors are necessary to invest in as the country continues to grow.

But for now, let’s focus on wiping out congestion.

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