Due to vessel congestion at the ports of Los Angeles and Long Beach, importation into Nigerian seaports has receded as foreign shipping companies are abandoning Asian-African routes for commercially viable India-United States and China-United States routes.
It was learnt that congestion has increased the freight rate on the route to the two American big ports and has trapped large volumes of Nigeria-bound imports in Asian countries particularly India and China.
According to eeSea, a company that analyses carrier schedules, there are over 60 container ships full of import cargo stuck offshore of Los Angeles and Long Beach.
The company said there are more than 154 vessels as of Friday, September 24th, waiting to load export cargo off Shanghai and Ningbo in China to the United States.
The congestion is due to business rush to re-stock pandemic-depleted inventories and surging demands for imports as the US economy has reopened.
Retailers and manufacturers have rushed to place orders to restock their inventories, but the global shipping system is struggling to keep up.
However, tens of thousands of containers are stuck at the ports of Los Angeles and Long Beach, California, the two West Coast gateways that move more than a quarter of all American imports. More than 60 ships are lined up to dock, with waiting times stretching to three weeks.
“We’re definitely seeing carriers pulling ships from Asia-Middle East and Asia-Africa and putting them into the trans-Pacific trade,” Simon Sundboell, founder of eeSea, told American Shippers.
“While the number of ships in the world is finite, operators can shift ships to wherever they make the most money, and the trans-Pacific is now a particularly lucrative trade: Spot rates including premiums can top $20,000 per forty-foot equivalent unit (FEU),” Sundboell said.
He continued: “Whether it’s for one round trip as an extra loader or whether it becomes semi-permanent, I don’t even think the carriers know themselves right now. They’re just playing the market and if it makes more economic sense to take a ship from the Middle East and put it in the trans-Pacific, they’ll do it, whether it’s for one month, three months or six months – which is why nobody knows what this network is going to look like six months from now.”
However, stakeholders in the nation’s maritime sector are lamenting cargo drop in the last few months especially truck owners who are groaning under low patronage and that has crashed haulage cost drastically.
Speaking to LEADERSHIP, Yusuf Liadi, a truck owner, lamented that getting Termimal Delivery Order (TDO), is now herculean as there are so many trucks lying idle at the port.
According to him, trucking a 40ft container from Apapa Port to Sango Otta that used to be N440,000, is less than N270,000 presently while Ikeja that used to go for N350,000 is now less than N200,000.
Liadi further said that the port environs rate has also crashed saying Sunrise that used to go for N200,000 is now N120,000.
He said: “I have been at the port for over three days and have not seen a container to haul out of the port.
cally and this is because many trucks are after a few containers in the port,” he said.
Explaining why cargoes volume into the nation’s seaports is dropping, the managing director of Gold-Link Investment Ltd, Tony Anakebe, said no shipping company is willing to send vessels to ply either China-Africa or India-Africa routes except for cargo owners that are willing to pay the exorbitant costs for freight.
“There is serious congestion in ports around the globe due to the outbreak of COVID-19. There is a long wait to get containers overseas to freight goods into Nigeria and the cost of freight has now become extremely high,” Anakebe told our correspondent over the phone.
According to him, the development will seriously affect the prices of goods especially as raw materials are trapped in China and India.
He further stated that no shipping company is ready to invest in the production of new containers especially now that there is a global economic downturn where many businesses are running at a loss.
He said the development has become a source of concern to Nigerian shippers due to the fact that it has become a huge risk to invest in importation at a time like this where the table may turn, and the freight crash.
“The development is being compounded by the fact that empty containers of these shipping companies are trapped in African countries and the United States. And the presence of these containers has become a menace in countries like Nigeria due to the low volume of export cargoes to move out with these containers,” he added.
He, however, said shipping companies now divert their limited containers to service China-United States routes because freighting a 20-foot container from China to the United States is now as high as $23,000 due to the congestion in US Ports.