Port and Shipping Express Management: The Challenges Faced by West and Central Africa in This Century

doi:10.4236/ojapps.2012.24043

Paper Menu >>

Journal Menu >>

Open Journal of Applied Sciences, 2012, 2, 294-297

doi:10.4236/ojapps.2012.24043 Published Online December 2012 (http://www.SciRP.org/journal/ojapps)

Port and Shipping Express Management: The Challenges

Faced by West and Central Africa in This Century

Regine Adele Ngono Fouda

Department of Logistics Management, Shanghai Maritime University (SMU), Shanghai, China

Email: [email protected]

Received September 26, 2012; revised October 26, 2012; accepted November 12, 2012

ABSTRACT

Shipping industry has become more capital intensive, technically more demanding and subject to major global regula-

tory reforms. As a consequence, the number of African shipping lines has been severely reduced. International trade of

the WCA countries remains weak, limited to 30% of their Gross Domestic Product (GDP). The go al of this paper is to

provide a comprehensive overview of the port and shipping convey management in the WCA region, and of course to

describe what has been achieved since then and what still have to be done to better its infrastructures and port commu-

nity.

Keywords: WCA; Shippin g Con vey; Port s Sect ors; Ineffectiveness & Dispr o po rt io n; Constraints; Contai neri zat i on;

Port Reforms; Competence & Management

1. Introduction

Maritime transport is growing at a high pace. In a global

context, WCA maritime transport and port sectors face

several long-term trends such as: Ship size, (container

ships), unstable tariffs, and port infrastructure. The ap-

plication of measures to enhance security, by th e Interna-

tional Ship and Port Facility Security Code (ISPS) Code,

requires continuing attention. Also Poverty reduction

mainly depends on economic growth, of which trade ex-

pansion is a linchpin. For the past decades, WCA ports

remain largely outside several global trends. However,

due to current traffic and port efficiency, shipping lines

strategies seem legitimate. Africa accounts for less than

1% of world container traffic. Moreover, WCA need to

improved links between a port and its hinterland, these

are the only solutions for small ports to ensure increased

traffic, which will result in decreasing maritime transport

tariffs. Otherwise, ports will become increasingly mar-

ginalized. These global developments challenge the

countries in WCA, but also offer [1] an opportunity to

implement overdue reforms like improving areas around

ports and better management.

2. Shipping & Port Sectors in WCA: An

Amalgamation

2.1. Port Ownership and Management Mainly

Public Service Model

WCA lags behind in terms of global trends affecting port

sector because port concentration is predominantly pub-

licly-owned. For example, Lagos, Abidjan, Dakar and

Douala. These ports account for almost 30% of the total

port traffic in WCA (even though not a single port is

ranked in the top 70 ports worldwide) (see Table 1).

2.2. Containerization Lingers Low despite

Efforts

In Africa, containerization has grown (10% annually)

more than three times compared to economic growth.

However, containerized rate of traffic remains low and

marginal in the world.

2.3. Ports Are Costly for Shippers and Shipping

Lines

Due to numerous constraints, port charges are high for

shippers. Shipping lines face congestion costs (about $5

million) and poor port productivity. So, Delmas calcu-

lated 146 days in 2004.

2.4. Shipping Lines Strategies to Cope with

Constraints

The agreements between shipping companies, known as

Conferences in WCA. Changes in such agreements have

resulted from mergers and takeovers in shipping lines

industry, because of the 1974 Code of Conduct for Liner

Conferences and the 40-40-20 rule. UNCTAD [2,3]

recommended reforms based on: 1) Liberalization with

R. A. N. FOUDA 295

Table 1. Total container traffic in west and central Africa

(in TEUs).

Côte d’Ivoire Abidjan 670,000

Nigeria Lagos 650,000

Ghana Tema 342,882

Senegal Dakar 331,191

Angola Luanda 235,411

Cameroon Douala 156,000

Benin Cotonou 97,801

Guinea Conakry 47,000

Congo, DRC Matadi 46,000

Gambia Banjul 44,152

Togo Lomé 42,240

Gabon Libreville 39,000

Congo, Rep. Pointe Noire 30,000

Sierra Leone Freetown 25,000

Mauritania Nouadhibou 21,000

complex mix to ensure the competitiveness; 2) Regu-

latory and promotional policies, to ensure national ope-

rators and best available conditions for users.

2.5. Inadequate Shipping Services

Shipping lines face increased costs in WCA mainly for

poor port efficiency, low traffic and inadequate/insuf-

ficient port equipment. Although the number of vessels

docking at West African coasts has grown from 15,000

to 20,000 during the year 2000, there is still a lot more to

do.

3. The Ineffectiveness and Disproportion of

WCA Ports

3.1. Ports Organization Greatly Impacts Port

Competence

3.1.1. Impact of Port Efficiency on Port Productivity

and Costs

Systematic comparative information is not available on

cargo handling performance in many ports of WCA.

Therefore dwell time may vary between 7 days in Abi-

djan and 17 days in Douala [4,5].

3.1.2. Importance of a Legal Setting

The institutional framework of a port in WCA depended

primarily of French or the British model. The French

model usually placed the ports under établissement pub-

lic, (an incorporated government agency). While British

model, port authorities were also incorporated but usual-

ly enjoyed autonomy.

3.2. Awkward Measure and Poor Links to

Hinterlands Diminish Port Competence

Port’s need quality and fluidity of land transport net-

works (which costs relatively high in WCA, on account

of distances) [6]. e.g. Lomé’s port implemented a pro-

gram, “Solidarity on the water” aiming to promote tran-

sit operations destined to landlocked coun tries.

3.3. Port Physical Constraints in WCA

3.3.1. Location Constraint for the Sustainability of

Certain Ports

The location of many long established ports such as La-

gos-Apapa makes them difficult for their sustainability in

the future.

3.3.2. Port Capacit y Usually Results from Inadequate

Maintenance

Only Abidjan (3 cranes), Lagos, Tema, Dakar and Do-

uala, (2 cranes) are equipped with gantry cranes in con-

tainer terminals [7].

3.3.3. Port Capacity Could Become a Serious

Challenge in the Future

Larger ships are more demanding in terms of installa-

tions. The ship to shore gantry cranes need to be suffi-

ciently large to reach all the containers (a depth up to 14

meters) [8-10].

3.4. Port Performance in WCA, Slow Motion as

Seen in Table 2 Below

Table 2. Average port delays… [11].

Region Range of truck

cycle times Range of container

dwell times

East Africa 3.5 hours to 1 day 5 to 28 days

Southern Africa 2 to 12 hours 4 to 8 days

West Africa 6 hours to 1 day 11 to 30 days

4. Thriving Model: Case Study of Nigeria

Port Sector

Nigeria ports have for a long time been globally recog-

nized as one of the least efficient. Nevertheless approval

was by the President or the Minister. In 2005, a reform

process was initiated, with the adoption of the “Land-

lord” model, where the public sector is responsible for

regulation of the sector, port planning, and the ownership

of port land and infrastructure. The private sector would

be responsible for marine and terminal operations, super

R. A. N. FOUDA

296

structure and equipment. The agreed reform included:

Creation of two Autonomous Port and Harbor Authori-

ties Creation of a National Transport Regulatory Com-

mission; limiting the role of the Government, while Pri-

vate operators perform operations, reforms as: Legal and

regulatory reform and Labor reform. In 2006 the initial

concessions became operational. Within a few months of

private operation of the Lagos container terminals, pro-

ductivity went up. Chronic delays for berthing space had

nearly vanished, leading to the reduction of congestion

(surcharge from Euro 525 in March 2006 just before

concessioning to Euro 75 in January 2007). Therefore

reduction in congestion earned Nigerian economy about

$200 million annually. As part of a broader program of

port reform in early 2006, the Nigerian Ports Authority

awarded a concession to APM Terminals to manage,

operate, and develop the Apapa container terminal, in-

creasing capacity from 220,000 TEUs/year to 1.6 mil-

lion TEUs. Within months, shipping lines reduced their

congestion, saving their economy $200 million a year.

By early 2009, new gantry cranes had been acquired.

However, although the port’s equip ment is able to handle

more than 500 containers per day for customs examina-

tions, the majority are returned to stacking by the end of

each day. By January 2009, the port was clogged by un-

collected containers, and at the end of February, the Ports

Authority announced a temporary suspension of ship

entry, lasting until mid-April, to clear “alarming” back-

logs. The controller of Customs Service for Apapa

blamed the low clearance volume on the need to physi-

cally examine every container because of high false dec-

laration by importers. However, even cleared containers

were not collected. By January, end, out of 9741 con-

tainers, only 851 had been cleared by customs, with all

charges paid with documentation by agents. Ports Au-

thority consequently proposed demurrage charges of $4

per TEU in a bid to force owners to move their contai-

ners. In their turn, the containers’ agents blamed a lack of

trucks, arguing that many had been booked.

(Source: Press reports assembled by C. Bert Kruk,

World Bank, ILO) [12].

5. Strategic Analysis

The Nigerian ports as well as WCA ports have not been

able to integrate into global trends. Yet, their current

challenges may be an opportunity in future development.

Due to their new reforms, the Apapa port has witness a

lot of progress, which has increased capacity from

220,000 TEU per year as well as the economy to $200

million. Congestion has gradually reduced. This let me

evaluate, that the port operation by the public (president

or minister) is costly and worthless, while the private

operators have made it possible that larger ship can be

served, infrastructure consideration, productivity to mini-

mize turnaround time and country’s economic stability.

Government operators can only appraise administratively,

whereas, businessmen see into a future expansion of the

port terminals. Though all these notions, more improve-

ments are needed.

6. Recommendation and Conclusions

In recommendation, eventually in conclusion, the re-

cently observed development of larger vessels calling

WCA as well as prospect for even larger vessels being

used, offers an opportunity for reduction in shipping

costs, provided that necessary maritime transport, land

transport and port reforms are undertaken. The main ob-

jectives of upcoming reforms for Governments should be

aimed at: *facilitating procedures and controls in ports,

such as procedures affecting turnaround time, dwell time

and handling costs [13]: *facilitating trade and land trans-

port outside the port on the main trade corridors: *

im-

proving port access in view to develop multimodal trans-

port. Areas around ports are usually cong ested and inves-

ting in road infrastructure to improve port access: *fos-

tering private sector participation both to provide invest-

ment for new installations and equipment: *increasing

competition among shipping lines in countries where

informal barriers to market entry still prevail: develop ing

knowledge sharing between ports and countries on cur-

rent port reforms in the region: *carrying out cost-benefit

analysis of current port management and efficiency in

countries facing very high port charges and high mari-

time transport rates.

Moreover, there is need to reduce dwell times and

handling costs, countries need as well to invest in infor-

mation systems, communications technology, and modern

customs practices. Customs procedures, in particular, act

as a bottleneck to port efficiency when they are out-

dated or open to corruption. Also, Striving for efficient

ports must be complemented by associated measures to

increase transparency and reduce corruption in customs

administration [14]. The African ports, like all world

ports, must create port community systems not only to

improve productivity and efficiency but also to respond

to the growing importance of and future obligation in

supply chain security. I personally th ink that, if all WCA

port follows most of these recommendations (even 50%

of it); there will be a drastic charge in their respective

ports, which will shoot them at a top world record.

REFERENCES

[1] B. Slack, C. Comtois and R. McCalla, “Strategic Alli-

ances in the Container Shipping Industry: A Global Per-

spective,” Maritime Policy and Management, Vol. 29, No.

1, 2002, pp. 65-76.

[2] A. K. C. Beresford, B. M. Gardner and S. J. Pettit, “The

R. A. N. FOUDA

297

UNCTAD and WORKPORT Models of Port Develop-

ment: Evolution or Revolution?” Maritime Policy & Ma-

nagement: The Flagship Journal of International Ship-

ping and Port Research, Vol. 31, No. 2, 2004, pp. 93-

107.

[3] J. Hoffmann, “Maritime Statistics and UNCTAD’s Re-

search about Ports,” 2004.

[4] C. Ximena, D. David and M. Alejandro, “Port Efficiency,

Maritime Transport Costs and Bilateral Trade,” Journal

of Development Economics, Vol. 75, No. 2, 2004, pp.

417-450.

[5] R. J. Sanchez, J. Hoffmann, A. Micco, G. V. Pizzolitto,

M. Sgut and G. Wilmsmeier, “Port Efficiency and Inter-

national Trade: Port Efficiency as a Determinant of Mari-

time Transport Costs,” Maritime Economics and Logistics,

Vol. 5, 2003, pp. 199-218.

doi:10.1057/palgrave.mel.9100073

[6] T. Conte, “Shipping Africa—A Special Case in Liner Ship-

ping,” Presentation during the 3rd Intermodal Africa 2005,

Dar Es Salaam, 2005.

[7] T. Vaneslslander, “Cost Structures in Container Handling:

How about Economies of Scale?” Presentation at Annual

Conference of the International Association of Maritime

Economists, Melbourne, 2006.

[8] K. Cullinane and M. Khanna, “Economies of Scale in

Large Containership: Optimal Size and Geographical Im-

placations. Optimal Size and Geographical Implications,”

Journal of Transport Geography, Vol. 8, No. 3, 2000, pp.

181-195.

[9] Drewry, “Annual Review of Global Container Terminal

Operators,” 2006.

[10] C. Woodbridge, “Global Operators Consolidate Hold on

Terminal Market,” In: M. G. H. Bell and B. Khalid, Eds.,

Containerization International Handbook: The Port Sec-

tor in South Africa: Towards an Integrated Policy and In-

stitutional Reform, World Bank, Washington DC, 2007, p.

16.

[11] M. G. H. Bell and B. Khalid, “The Port Sector in South

Africa: Towards an Integrated Policy and Institutional

Reform,” World Bank, Washington DC, 2007.

[12] C. B. Kruk, “World Bank, ILO,” Press Reports Assem-

bled, 2004.

[13] N. Van and C. Henriëtte, “Port Reform and Concession-

ing in Developing Countries,” Maritime Economics and

Logistics, Vol. 7, 2005, pp. 141-155.

doi:10.1057/palgrave.mel.9100129

[14] A. Frémont, “Shipping Lines and Logistics,” Transport

Reviews: A Transnational Transdisciplinary Journal, Vol.

29, No. 4, 2006, pp. 537-554.