Dysfunctional rail system raises cost at Kaduna Dry Port
Absence of a functional railway system has increased the haulage cost of moving import goods from ports in Lagos to Kaduna Dry Port including moving export cargo from Kaduna to Lagos ports, shippers have said.
They said that the essence of investing in the development of Inland Container Depots (ICDs) across the six geo-political zones in the country by the Federal Government, which was to bring port business closer to the users, will be defected if shippers are compelled to pay for high cost of moving cargo, due to absence of functional rail system.
The Kaduna Dry Port, which was commissioned and opened-up for business in January 2018, was built to allow importers and exporters in and around Northern Nigeria, to import and export directly into and from Kaduna without having to travel to Lagos.
Commencing business operations in Kaduna port, was also geared towards saving cost and time by doing same business with ease from Kaduna, and also helping to decongest Lagos ports.
Speaking in a telephone interview, Tony Anakebe, managing director of Gold-Link Investment Limited, a Lagos-based clearing and forwarding company, who pointed that the idea of building ICDs was to reduce cost for shippers, also said that cost efficiency in ICDs will be difficult to achieve without a functional rail system.
According to him, such situation will discourage shippers from using the dry port due to cost, which will make it very difficult for the concessionaire, Inland Container Nigeria Limited (ICNL), to recoup its investment in the port.
Anakebe called on the Federal Government to encourage the new consortium led by General Electric (GE), to whom the management of the rail lines in Nigeria was recently concessioned to.
Confirming this, Yusuf Ismail, managing director of the ICNL said recently in Lagos that the inability of the Nigerian Railway Corporation (NRC) to move cargoes from the Lagos port to the Kaduna Dry port, has affected economic activities at the port.
Ismail said that the high freight cost of containers to the Dry port by road from Lagos to Kaduna is taking toll on the business, which, according to him, has increased by 100 percent, making the port uncompetitive.
The cost of transporting cargo from Lagos to Kaduna port would have been cheaper if the rail line was in perfect condition. But, since the rail is not working, we are forced to be using road and the condition of roads in Nigeria is bad. This has increased cost of transportation such that instead of spending N400,000 for to move one by 40-foot container, we spend N800,000 to move one 40-foot from Lagos to Kaduna,” Ismail said.
Assessing the competitiveness of the port, Ismail said that transportation cost from Lagos to Kaduna; ocean freight; terminal charges and cargo handling charges must be put together to determine the cost effectiveness of the Dry port compare to shippers coming direct to Lagos to take delivery of consignment.
Kaduna port has the capacity to handle a minimum of 29,000 twenty-foot equivalent units (TEUs) of containers annually. The port targets transit cargo for neigbouring countries like Chad and Niger, whose owners would have opportunity to clear their cargo in Kaduna without having to go to Lagos.
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