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ICNL loses N18b to non-functional rail system in 2022

By Adaku Onyenucheya
18 January 2023   |   5:21 am
The Managing Director of Inland Containers Nigeria Limited (ICNL), Ismail Yusuf, has said the company lost about N18 billion in 2022 due to non-functional rail system for cargo movement.

The Managing Director of Inland Containers Nigeria Limited (ICNL), Ismail Yusuf, has said the company lost about N18 billion in 2022 due to non-functional rail system for cargo movement.

He lamented that cargo movement in the country are done through roads that are not in good condition, as trucks get stuck for about three days, coupled with floods that affected a lot of people transporting cargoes from the seaport to the hinterlands.

Yusuf said the company did an average of about 15,000 TEU in 2022, which was moved by road, noting that if the rail had been working, it wouldn’t have cost more than about N9 billion per annum. He said due to the non-functional rail system, using the road costs three times more, amounting to about N27 billion.

According to him, this is because rail takes N600,000 per container or per wagon, while truck takes N1.8 million, which is about 300 per cent increase.

“N18 billion lost just only on transportation, which is for my company alone. When you aggregate it with that of other companies doing the same business, then you can imagine the number of billions that have been lost due to the non-functioning of the rail,” he said.

Yusuf, while commending the Federal Government for the rail track from Lagos to Ibadan to boost passenger rail transport, said investing in wagons for cargo is the only way government can recoup its investment and build more tracks.

“You can see the stations; the little locomotive wagons provided for the passengers, but we are yet to see wagons for cargoes. There is no way only the passenger trains can generate the money already invested. I will advise the Federal Government to buy wagons so that those in cargo movement will patronise it and then government can recoup the money it invested on rail system,” he said.

The ICNL boss decried the many challenges facing dry port operations in the country, which are yet to be addressed by the Federal Government through the Nigeria Shippers Council (NSC). He listed the challenges to include, the non-recognition of dry ports as ports of destination and origin.

“We have a lot of teething problems, the first being recognition of dry ports as ports of destination and origin. The second issue is that shipping lines need to buy into Federal Government’s reasons for establishing a dry port in the country because they are the ones that can make it work.

“On examination, nothing like documentation will be done. This is because the containers are in transit to the dry port and arrangements will be made by the shipping lines to transfer them either by road or rail to that particular dry port where the customers/agents will come and clear their goods from to their different warehouses. But that is not in place yet, which is why I said the Federal Government, through the shippers council, has a lot to do regarding Through Bill of Laden,” he explained.

He said the dry port is still being treated like bonded terminal, noting that the Nigeria Customs Service (NCS) has not agreed to its establishment, as transpiration and bond are used for the movement of containers from seaports.

According to him, the implication of not operating as a port of destination includes, delay and documentation problems, as it takes three days to a week for documentation, thereby going through all the security agencies at the port before cargo will move out.

“The unnecessary delays in doing documentation for about seven days when the containers should already be in transit lastest 48 hours after getting to the port, then you have lost five days. If you should calculate five days that should have been used for something else, that is also money,” he said.

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