African shippers are currently experiencing a tragedy in liner services, with historic port bottlenecks now compounded by increases in freight rates, making shipping operations difficult for many.
Alphaliner has released new data showing that due to the disruption of the supply chain in the COVID era, shipping companies are using greater tonnage on the profitable east-west, transpacific and transatlantic trade routes. Specifically, the data showed that the capacity of liner services to and from Africa had decreased by 6.5 percent compared to the previous year.
As an example, the data analysis company named MSC, which had relocated around 13,000 TEU of shipping capacity from African trade routes to the Pacific. The report found that the main reason for the shift was the high revenue along the east-west trade routes.
This has a significant impact on African senders. Nigeria, for example – the largest economy in sub-Saharan Africa – has been unable to overcome persistent inefficiencies in port operations. As a result, exporters lost about $ 218 million in perishable and other damaged products over the past year due to traffic congestion in the port of Apapa.
In an interview with The Guardian Nigeria, Jonathan Nicol, president of the Shippers Association of Lagos, said that some trucks took three months to reach the filled terminals because there was no space for export containers.
âThe infrastructure on the ground cannot cope with the freight volume in the port and at the same time the costs are uncontrollable. This results in exporters renting barges and berthing on the sides of ships to load directly from the barges onto the ships, âNicol said.
Former chairman of the Nigerian Chamber of Commerce, Kolawole Awe, also said operational inefficiencies in Nigerian ports have resulted in multiple empty runs.
âThere are hardly any ships that dock on time and therefore some of them avoid certain ports in Lagos. They go to other ports because they must have the problem [wait] 21 to 30 days in Nigerian waters, âsaid Kolawole.
In Kenya, the manufacturing sector is hardest hit by the rise in sea freight rates as the cost of imported raw materials from international markets has risen sharply. According to a recent survey by KPMG and the Kenya Association of Manufacturers (KAM), 23 percent of the companies surveyed said they had laid off some of their workforce, compared with 18 percent in 2018. In addition, fewer companies (15 percent) have the Adjusted salaries of their employees compared to 27 percent of companies in 2020 due to lower productivity.
On average, one-way container prices from China to Africa ranged from $ 2000-2500 last year but have doubled to $ 4000-5000.
In a recent research note, IHS Markit analyst Turloch Mooney found that berth productivity is an important factor in removing port congestion. Berth productivity in Asian ports is consistently around a third higher than in North America and around 25 percent higher than in Europe. This difference is due in part to round-the-clock operations, the quality of the terminal facilities, and sufficient physical capacity to handle sudden spikes in demand.
âAll of the world’s major ports have room for efficiency gains through more intelligent use of digitization and data exchange to streamline port calls. The current congestion phenomenon is accelerating such programs and is further supported by the industry’s decarbonization agenda to reduce global emissions from container shipping, “Mooney wrote.” As port and terminal operators come under pressure to improve, we anticipate more programs . “around initiatives such as automation and extended operating times.”