Shipping firms are putting extra surcharges on commodities headed for Nigeria, To cover the costs of rerouting ships to longer routes as a result of the continued attacks on the Red Sea.
Shipping lines that have imposed fees on cargo heading for Nigeria include Maersk Line, Hapag-Lloyd, and CMA CGM.
Consequently, companies in Nigeria are now having to pay more to import finished items and raw materials.
One of the largest shipping companies that ship goods into Nigeria, Maersk Line, recently informed its customers in a customer advisory letter that due to the growing effect of the Red Sea attacks on international supply chains, it will be imposing a new premium on import containers in June.
A few months prior, in January, Maersk levied a $150 Peak Season tax on twenty equivalent units (TEU) and a $300 tax on forty FEU of containers traveling to Nigeria from China, Japan, Taiwan, and other Asian nations.
German maritime carrier Hapag-Lloyd began imposing surcharges in mid-May on cargo traveling from Asia to several locations in Africa, including Nigeria.
A $150 per TEU surcharge was also applied to cargo headed for Nigeria by CMA CGM, a significant shipping line.
According to Tony Anakebe, managing director of Gold-Link Investment Ltd., “placing fresh surcharges on imported goods has increased shipping cost into the country as importers paying as much as $5,000 and $7,000 per 20-foot and 40-foot container from Asia to Nigeria would now pay an additional $500 or more in some cases.”
Anakebe, as an example, informed our reporter over the phone that, in addition to demurrage charges rising from N58,000 to N65,000, shipping lines had also raised rates on reefer containers from N126,000 to N160,000.
Jonathan Nicole, the immediate past president of the Shippers Association of Lagos State, provided insight into the reasons for the shipping businesses’ requests to impose surcharges, stating that the regrettable conflict between Israel and the Palestinians is to blame for the rise in freight costs.
He claims that this has caused instability that has had repercussions because usual routes are no longer being traveled to protect the crew and ships from rebel harassment.
According to Nicole, shipping lines use longer routes to prevent kidnappings and other potentially harmful trends that the rebels might start.
“Charges increase as a result of longer routes because liners impose surcharges. This drives up freight costs and raises carriers’ operating expenses,” he stated.
The News Chronicles found that the construction had an indirect effect on end consumers by driving up commodity costs, in addition to raising the cost of doing business at the port.
According to Nicole, trade volume would decline as shippers reduced inventory in addition to the cost of freight rising by at least 15 to 20 percent, which the importer will recoup at the point of sale of the goods.
Businesses that rely on Nigerian ports to import essential production inputs and completed goods are finding it extremely difficult to stay afloat in the current economic climate.
“The development is having a serious impact on importers and manufacturers, particularly at this moment when businesses are being impacted by the high naira to dollar exchange rate and the volatile exchange rate used to calculate customs duties,” Anakebe stated.
He said that the developments will also have an impact on product prices, particularly in light of the current inflationary state of the Nigerian economy.
According to him, service providers are also raising their fees to reflect the current state of the economy. For example, terminal operators have increased terminal handling fees from roughly N65,000 or N80,000 to as much as N204,000 per container.
