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The decline in maritime traffic in West Africa put at risk major port projects in the region.

Large shipping companies take a step back in Nigeria because of the lack of activity in their ports.

Drewry analyzes the shipping market in the region.

The latest edition of Drewry’s quarterly port sector report Ports & Terminals Insight analyses in detail West African liner shipping networks and in particular the way that port usage is developing and changing. Central to this are the various port development plans that are currently something of a moveable feast.
The location and nature of transhipment hubs serving the West African port market is changing. In this complex battleground the progress of new projects has been stymied.

Two major greenfield projects have been hit by the sharp decline in Nigerian container traffic over the last couple of years. Table 1 shows the gateway port volumes (full + empty) by country across West Africa for 2014-16. Overall regional activity has fallen by nearly 13% since 2014 with more spectacular falls in some countries, particularly those with oil-based economies such as Angola (-50%) and Nigeria (-30%).

As the region’s largest port market, Nigeria had attracted two substantial new port projects, Lekki and Badagry. Originally scheduled to be operational in 2016, Lekki was backed by ICTSI and CMA CGM, but ICTSI has announced its exit from the project, citing “delays in execution”. Partner CMA CGM will likely follow. The Badagry project meanwhile is backed by APM Terminals and TIL (MSC) but limited progress appears to have been made, and APMT now has a completely revised corporate strategy focused on optimising existing assets rather than developing greenfield new ones. In this context it is therefore surprising that DP World is reportedly in discussions with the Nigerian Ports Authority to develop a new port close to Lagos, but perhaps the company sees a long term opportunity if the other projects look like faltering. The Lagos project would comprise greenfield and brownfield container and bulk facilities.

Elsewhere, the new TIL (MSC) hub at Lome, Togo, is growing fast. Having opened in 2014, it handled over 500,000 teu in 2016. In addition, MSC recently signed a 35-year concession agreement with Ivory Coast's second port of San Pedro to upgrade and operate its container terminal. MSC has reportedly stated that that the improvements would allow vessels of up to 14,000 teu to use the facility. Abidjan is already established as a hub port in Ivory Coast (see Figure 1) and San Pedro will surely join it, indicating that MSC is not going to rely on
Lome as a single hub in the region.

In general, shipping companies use West African ports for three purposes. The first and most important are offshore services, while also providing a good basis for connecting large logistics centers with smaller ports and for interconnecting ship loads from east to west.

In making their network plans, lines have had to take into consideration that they are serving a shrinking market in the short term, albeit with significant port by port variations in the growth or reduction in flows. Table 2 shows the changes in the number of loops on the main West African trades in the last 12 months, together with the average and maximum vessel sizes.

There are significant differences between the way in which the European and Asian routes are served even though the size of each trade is similar. While the Europe route now has 27 loops with an average vessel size of 2,502 teu, the Asia route has only eight loops with a much larger average vessel size of 5,551 teu. The maximum vessel size operated is 13,102 teu, up 12% over the previous 12 months. This compares with 4,651 teu in the European trade. The much larger vessel size on the Asian route – hence the smaller number of loops – is due to the longer route distance in this trade, which makes the economies of scale from employing larger vessels more important than in the European trade.

On the European trade route, the main container lines get their economies of scale in a different way. Rather than operate hubs on the West African coast, they carry out their hubbing ‘offshore’ in West Med. This not only gives access to cost effective hub ports, but they have a range of other services available to carry cargo between the full range of North European / Med ports and the hubs, minimising the round voyage time for these loops.




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