Terminal Operators’ Monopoly Stifling IDP’s, Bonded Terminals, Stakeholders Decry at PortNews Summit 2024

By DAPO OLAWUNI

Stakeholders in Nigeria’s maritime industry have raised alarms over the growing monopoly of terminal operators, which they argue is stifling the operations of Inland Dry Ports (IDPs) and bonded terminals, and that it is ultimately crippling indigenous participation in cargo management. The concerns were voiced at the PortNews Summit 2024 held at the Rockview Hotel, Apapa, Lagos, on Wednesday.

Aare Haruna Omolajomo, General Secretary of the Association of Bonded Terminal Operators, expressed frustration with the exclusionary practices of terminal operators. He revealed that bonded terminals, which once served as key hubs for cargo decongestion, have been rendered almost obsolete by the monopolistic tendencies of foreign-dominated terminal operators who now control port operations following the 2006 port concessions.

“The monopolization of cargo handling by terminal operators has made bonded terminals redundant. Indigenous operators are sidelined, and their contributions to the logistics chain have been diminished,” Omolajomo lamented.

He accused terminal operators of exploiting their positions to monopolize cargo allocation and failing to integrate bonded terminals into the cargo handling system, a move that has adversely affected local businesses and jobs.

He said that bonded terminals which were once instrumental in managing overflow cargo and reducing congestion at seaports, but now, they struggle to attract cargo due to restrictive practices by terminal operators.

Omolajomo argued that this has not only hurt the financial viability of bonded terminals but also weakened Nigeria’s logistics capacity.

“Many bonded terminals are shutting down because terminal operators refuse to share cargo handling responsibilities. This monopolistic grip is sabotaging local capacity and the overall competitiveness of our maritime sector.” he said

Speakers at the summit criticized the government for its failure to enforce local content laws and adequately regulate terminal operators. Capt. Emmanuel Ihenacho, a maritime expert, noted that while port concessions were introduced to enhance efficiency, they inadvertently created monopolies that now undermine competition and stifle indigenous businesses.

“Port concessioning without strong regulatory oversight has led to unintended consequences. Terminal operators have consolidated their power at the expense of smaller players like bonded terminals,” he said.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), called for an urgent review of the concession agreements, emphasizing that monopolistic practices are counterproductive to economic growth and local content development.

National President of Association of Nigerian Licensed Customs Agents (ANLCA) Emenike Nwokeoji urged the Federal Government to carryout a review of the performance of the port concessions and not just renew the lease agreements with concessionaires.

“The Federal Government should review what they have done so far, not just to go ahead and renew their contracts without reviewing what is happening.
“So many of them, the investments and employment they promised was not implemented, rather they bringing their own people as local workers and engineers to come and work in Nigeria.

“You would not blame them for arbitrary charges because the system is porous, there are government agencies whose responsibility it is to regulate Tariff, are they doing it?
We have an agency that is supposed to protect the Nigerian Shippers in terms of negotiating freight, have they ever done anything? The freight charge, you can wake up one morning and realise it has been increased and yet nobody says anything.” Emenike lamented.

The summit participants proposed several measures to address the identified challenges, part of the suggestions include;

• Policy Enforcement: The government must enforce existing laws that mandate cargo distribution among bonded terminals to ensure fair competition.

• Regulatory Oversight: A stronger regulatory framework is needed to curb monopolistic practices by terminal operators.

• Incentivizing Local Operators: Indigenous bonded terminal operators should receive incentives and support to sustain their operations.

• Reviving Bonded Terminals: The government should adopt policies that reintegrate bonded terminals into the cargo handling system, especially for inland cargo.

Stakeholders stressed that Nigeria’s maritime sector cannot thrive if monopolistic practices persist. They urged the government to take swift action to level the playing field and empower indigenous operators to compete effectively.

“The monopoly of terminal operators is a ticking time bomb for the industry. We need immediate interventions to revive bonded terminals and restore balance in the cargo handling ecosystem,” Dr. Yusuf warned.

In his welcome address, Mr. Wale Oni, Publisher of PortNews, reflected on Nigeria’s once-thriving maritime industry.

He recounted the era when Nigeria’s National Shipping Line (NNSL) operated a robust fleet of 30 vessels and Nigerian ports were managed efficiently by the Nigerian Ports Authority (NPA)

However, he lamented that the sector has regressed due to policy missteps and privatization initiatives that excluded local operators.

“Nigerian operators have lost the plot and become mere onlookers,” Oni said, urging stakeholders to find solutions to the exclusion of Nigerian bonded terminal operators and freight forwarders by foreign-dominated concessionaires.

The PortNews Summit 2024 concluded with a unanimous call for the government to prioritize reforms that will dismantle monopolies, foster inclusivity, and unlock the full potential of the maritime sector.