Nigeria’s maritime sector faces crisis amid empty container challenges

In this piece, ANOZIE EGOLE looks at the effects of empty containers at the nation’s seaports and government’s efforts toward addressing the challenges

The Nigerian maritime industry, often hailed as the gateway to West Africa, is crucial in facilitating trade and economic growth. However, one persistent challenge plaguing this sector is the management of empty containers. These steel boxes, which are essential for global trade, have become a logistical nightmare for ports and terminal operators across Nigeria. The issue of empty containers not only affects port efficiency but also has significant economic, environmental, and operational implications for the entire supply chain.

Despite efforts by the Nigerian government, the Nigerian Ports Authority, and other stakeholders to modernise and streamline operations, empty containers continue to accumulate at ports and terminals, creating a bottleneck in the flow of goods. This feature explores the scale of the problem, its impact on the Nigerian economy, and the steps being taken to address this pressing issue.

Empty containers are a natural byproduct of global trade. Once goods are delivered, containers often return empty to their country of origin to be refilled with new shipments. However, in Nigeria, the sheer volume of empty containers being left in ports and terminals has reached alarming levels.
The problem is most pronounced in the two busiest ports in the country– Apapa and Tincan Island Ports in Lagos. These ports account for over 80 per cent of Nigeria’s total cargo traffic, and the high volume of imports, combined with insufficient export activity, leads to a glut of empty containers.

In a 2022 study by the World Bank, Nigeria was cited as one of the top 20 countries with the highest imbalance between imports and exports, which directly contributes to the large number of empty containers. The report also highlighted that this imbalance has been exacerbated by the country’s limited manufacturing base and the slow pace of export diversification. Consequently, a vast majority of containers entering Nigeria are left empty after unloading.

The problem is not just a matter of container accumulation. With vessels unable to berth efficiently, shipping lines often face delays, which translate into longer turnaround times and higher operational costs.
The financial implications of empty container accumulation at Nigerian ports are far-reaching. The congestion caused by these idle containers means that valuable port space is underutilised, limiting the capacity to process incoming goods. This reduces the overall efficiency of the ports, which are already grappling with insufficient infrastructure and outdated facilities.

A seasoned licensed agent, Johnpaul Ejiogu opined that empty containers are indeed affecting maritime trade in Nigeria adding that they contribute to some extent to the traffic situation seen on port access roads.

“They are affecting trade in Nigeria as most times, you find out that trucks carrying empty containers are the ones causing traffic on the port access roads,” he said.

The Head of Shipping and Terminal Logistics Department of the National Association of Government Approved Freight Forwarders, Ugochukwu Nnadi, reiterated that empty containers have always been a big challenge to maritime trade in Nigeria.

“They are a threat to maritime trade in Nigeria because they occupy spaces where imported goods should have been. They are just occupying spaces for nothing,” Nnadi said.

A 2023 report by the International Maritime Organisation estimates that the average turnaround time for ships in Nigerian ports is around 12-15 days, significantly higher than the global average of 4-7 days. This delay is partly attributed to the bottleneck created by empty containers, which block the smooth flow of goods. As a result, shipping companies are forced to incur additional costs, which are eventually passed on to importers and exporters.

This inefficiency also has broader economic consequences. The Nigerian economy, heavily reliant on imports for consumer goods and industrial materials, faces increased shipping costs, which contribute to higher prices for goods.
According to the African Development Bank, Nigerian agricultural exports such as cocoa, sesame, and palm oil have the potential to thrive in global markets, though some may encounter a major hindrance due to the inability to efficiently move these goods through ports.

Beyond economic costs, the environmental impact of empty containers is also a concern. With the over-concentration of containers at Nigerian ports, there is increased demand for trucking services, which are largely dependent on fossil fuels.

The excessive movement of trucks in and out of ports leads to high emissions of greenhouse gases and contributes to the already severe traffic congestion around Lagos.

Challenges

Several factors contribute to the growing challenge of managing empty containers in Nigeria. One of the key issues is the imbalance in the flow of goods between imports and exports. Nigeria imports far more goods than it exports, leading to an overabundance of empty containers that cannot be immediately dispatched back to their country of origin.

The Head of Research of Sea Empowerment and Research Center RGT, Dr. Eugene Nweke, told The PUNCH on Tuesday that the center was highly worried about the poor empty container administration in the Nigerian shipping space and thus, reviewed the socio-economic consequences of the littering empty containers in the Nigerian ports environment, taken the Western port of Apapa/Tincan and Kirikiri Lighter Terminal as a case study.

Nweke opined that the imbalance between the high inflow of laden containers and the low outflow of empty containers can have severe consequences on the port environment, nearby communities, and the economy.
“Empty containers occupy valuable space, causing congestion and clutter in ports, terminals, and surrounding areas. Abandoned containers can leak hazardous materials, contaminating soil and water. Improper disposal of empty containers contributes to waste management issues. Containers can become breeding grounds for pests, rodents, and other disease-carrying animals,” Nweke stated.
He said that containers littering nearby streets and communities can lead to reduced property values, increased risk of accidents and injuries, and decreased quality of life, “containers can harbor disease-carrying pests, rodents, and other vermin. Abandoned containers can provide hiding spots for criminals.”

“Go round most of the bonded terminals, many of them are now converted to commercial empty container withholding bay of the shipping lines,” he said.

Nweke maintained that empty containers littering the ports have economic consequences including delayed vessel turnaround times, increased demurrage fees, and reduction in port efficiency.

“It also leads to increased storage costs. Empty containers occupy valuable storage space, incurring additional costs. Empty containers are reducing port capacity and efficiency leading to decreased revenue. It can also cause congestion and pollution can harm local businesses, such as fisheries, tourism, and commerce,” he explained.

Speaking on the logistical consequences, Nweke averred that imbalanced container flow can lead to shortages for exporters.

“Higher demand for transportation services, leading to increased costs. Congestion and delays can disrupt supply chains, affecting businesses and consumers,” he stated.
This import-export imbalance exacerbates the empty container problem, as containers filled with imports cannot be reused for exports unless there is a corresponding flow of outbound cargo.

Another challenge is the lack of infrastructure and coordination between stakeholders in the supply chain. The port terminals in Nigeria, especially those in Lagos, were built decades ago and have not kept pace with the country’s growing trade volume. Poor road networks, inadequate rail systems, and outdated terminal handling equipment make it difficult to move containers in and out of ports efficiently.

Port operators also face the challenge of high storage fees for empty containers. With containers piling up, terminal operators are forced to charge exorbitant storage fees, which in turn increase the cost of logistics for shipping companies. According to a 2023 survey by the Lagos Chamber of Commerce and Industry, nearly 70 per cent of terminal operators reported that they are losing revenue due to the unavailability of space caused by the empty container crisis.

Steps towards solutions

Recognising the severity of the empty container issue, several stakeholders are taking steps to mitigate the problem. The NPA has initiated several reforms aimed at improving port efficiency. One such initiative is the Electronic Call-up System, designed to streamline truck operations at the ports and reduce the number of trucks waiting to pick up empty containers. This system is intended to ease congestion at the ports and make it easier for trucks to deliver and pick up containers, thereby improving the flow of goods. And it is yielding the needed results.

Additionally, the Nigerian Shippers’ Council has called for greater collaboration between government agencies, shipping lines, terminal operators, and freight forwarders. The council is advocating for policy reforms to encourage the return of empty containers to countries with favorable trade relations, particularly within the African continent. Under the African Continental Free Trade Area, the council sees an opportunity to promote intra-Africa trade and reduce the dependency on imports from outside the continent, thereby helping to balance the flow of containers.

The Nigerian government has also begun exploring alternatives such as creating a more robust rail infrastructure to facilitate the movement of containers from the ports to inland destinations. With rail transport being more efficient and environmentally friendly, this could provide a viable solution to the challenges posed by road congestion and empty container management.
The former National President of NAGAFF, Nweke, advised that in order to tackle the menace of empty containers, there is a need to designate specific areas for empty container storage.

“Encourage recycling or repurposing of empty containers, implement efficient container tracking and management systems, encourage exports to balance container flow,” he advised.

According to him, the government should enact regulations and incentives to promote sustainable container management.

“Collaborate with private companies to develop innovative solutions. Shipping lines should implement efficient container management practices. Terminal operators should ensure proper container handling and storage. The government should also enforce regulations, provide infrastructure, and promote sustainable practices. Local communities should participate in waste management and container recycling initiatives. The private sector should invest in innovative container management solutions.

Conclusion

The empty container crisis in Nigeria’s ports is a multifaceted issue that requires a coordinated approach from all stakeholders. While the problem has far-reaching economic and environmental consequences, there are signs of progress. Efforts to modernize the country’s port infrastructure, improve logistics systems, and promote export diversification could alleviate the congestion caused by empty containers.

By addressing the root causes of the imbalance in trade and improving port efficiency, Nigeria can unlock the full potential of its maritime sector, reduce the financial burden on businesses, and contribute to sustainable economic growth. However, this will require a long-term commitment to policy reforms, infrastructure development, and technological innovation.
Ultimately, the management of empty containers is not just a logistical challenge it is a critical aspect of ensuring that Nigeria remains competitive in the global trade landscape. As the country continues to address this issue, the hope is that Nigerian ports can once again become a hub of efficiency and growth, driving both local and regional economies forward.

Nweke, however, stated that by addressing the imbalance between laden and empty containers, stakeholders can mitigate the negative consequences and promote a more sustainable, efficient, and environmentally friendly port environment. The center hopes that this summarized report will go a long way in the effort to evolve firm empty container management and administration in the Nigerian shipping/port space.