by Tola Adenubi | 9 December 2024
Checks by the Nigerian Tribune have revealed that multiple handling charges have left the $1.5 billion Lagos-Ibadan cargo train stranded inside the Apapa Port for weeks.
When the Nigerian Tribune entered the Apapa port last week, the locomotive and wagons were seen parked inside the port terminal, with very few cargoes on it.
When our correspondent asked a port worker why the train has not left with the cargoes on it, the port worker, who pleaded anonymity, explained that the train has been there for weeks with those cargoes without leaving the port.
According to the port worker, “At times, the train spends weeks waiting to be fully loaded. The train doesn’t get fully loaded on time because of issues bordering around high cost of charges and lack of door-to-door delivery problems.
“When cargoes arrive, many importers opt for road haulage instead of rail haulage because of the high cost associated with rail haulage. And the train won’t leave except it gets a specific amount of cargo. So, at times, the Lagos-Ibadan cargo train spend weeks waiting for cargoes.
“If the prices can come further down, more cargo owners will use rail haulage and the train will get filled faster than the way it currently operates.”
When contacted, the Lagos District Manager of the Nigerian Railway Corporation (NRC), Engineer Augustine Arisa, debunked the claim that the Lagos-Ibadan cargo train is not getting filled on time due to high charges.
According to Engineer Arisa, “It’s not true that our charges are high. Our charges are the lowest. Our problem is the other charges that are levied on cargoes that want to use the rail haulage.
“Its true we don’t do door-to-door delivery services like the trucks do, and its also true that there is a specific number of containers that must be loaded on the train before it can move. We run on diesel, and cannot leave with maybe one or two or even five import units of containers. For us to balance our operating cost with what we earn, the train must have a specific number of containers loaded on it before it can move.
“However, we won’t force the cargo owners to use rail haulage. When the cargoes arrive, the owners have the right to choose which mode of exit they want their cargoes to use and exit the port. Many cargo owners prefer road haulage because it offers them door-to-door delivery options.
“Again, the issue of multiple handling charges is forcing others who want to use rail haulage to have a change of mind. Imagine if you had to pay rail handling charges after paying cargo handling charges. When the cargo arrives, the terminal operator loads the container on the truck or on the rail, depending on what the importer wants. If the cargo is loaded on a truck, the cargo owner only pays the cargo handling charges and settles the truck owner. However, if the cargo is to be loaded on a train, cargo owner pays the cargo handling charges and also pays the rail handling charges. After paying cargo handling charges and rail handling charge, the train takes the containers to a rail station close to the container destination, where it is then loaded on to a truck. Here, the cargo owner also pays for the loading of the container to a truck for onward delivery. So, due to these multiple handling charges, importers prefer trucks if the import unit of container is just one or two.
“It is importers that have large units of containers to move that make use of rail haulage more often. For an importer who wants to clear just one or two containers, such people use road haulage, and many of such cases abound at the port. So, our prices are not high. It is the door-to-door delivery issues and the multiple handling charges paid on cargoes that want to use the rail services that force many importers to prefer road haulage.”
Comments:
2 months ago
HOW NOT TO RUN A RAIL FREIGHT BUSINESS.
The Lagos district manager wouldn’t say what he’s reportedly said if his livelihood depended on the success of the business. As it doesn’t, he would appear unperturbed whether his product is competitive or not. He should ordinarily be alarmed that it is taking him a week to load a train, which coincidentally they’d promised would run 3 round trips per day but are apparently running one outbound a week.Why would any shipper patronise them when they take longer and are more expensive than the roads competition?
Rather than hand wringing, the district manager should be providing his plans for overcoming his deficiencies. He should be telling us what steps he is taking to level the playing field on handling charges. When he cites the cost of diesel as the reason why he can’t despatch his train until he has enough cargo, he shows a lack of understanding of his market and business. It’s what you may call “penny wise pound foolish”. Shippers value reliability, cargo tracking, good customer service and compensation for damages or loss. None of which the NRC excels at. So how can they win?
The fundamental truth is that railway cannot compete on a shortline like Lagos-Ibadan, which is only about 150km. Railway needs at least 600 km to be competitive. We were told by no less the Hon. minister Sen Alkali presumably because that’s what he had been told, that the narrow gauge would pick up the containers from Ibadan and ship to Kano. Is that happening? What about the transhipment costs at Ibadan? Even if it were which it isn’t, a freight train every 5 days or so is not a sustainable service and will no sooner pack up.
As the pre-eminent railway stakeholder, the NRC can do a number of things to improve the prospects for sustainable railway business. The problem as always is, you can’t give what you don’t have.
Unless we hurry up and unbundle this NRC so that those who have the capacity can invest and run the operations, we are unlikely to ever see any change in the fortunes of the railway regardless of the billions of dollars invested in the infrastructure