Port terminal operators are under pressure – TICT CEO

The Chief Executive Officer, Tin Can Island Container Terminal Limited, Mr. Etienne Rocher, in this interview with COMFORT OSEGHALE speaks on the challenges of seaport terminal operators and other related issues in the maritime sector

How much investment has been made at the TICT since the concession?

Well, we have made large investments; first of all, in the improvement of the infrastructure, and not the least, in relation to the quay side, yard and lighting of the terminal. The major part of the investment has been the equipment. By the time the TICT started operation in June 2006, it was known as Terminal B at the time, it was operating on the basis of vessels equipped with their own cranes on the landside. We were operating with reach stakers.

Currently, the vessel operations have been reduced to no more than 20 per cent which means that vessel gear have been replaced by mobile harbor cranes, which was not planned for in the original concession agreement. Today, we have about eight cranes out of which two were received no later than June 2015. We have also invested in Rubber Tyre Gentries, which operate in container stacks in the yard and allow for greater density and faster turnaround of operations. In addition, we have invested in terminal operating system, improving the facilities in relation to the offices and workshop. All the investments we have brought in have allowed us to cope quite well with the growth in volume at the TICT in the last nine years. The investments amount to about $70bn.

In addition, we have also seen quite an increase in direct employment to the extent that today, the TICT employs directly approximately 640 people. The interesting part is that within our operators, and I believe we are the first terminal in Nigeria, most probably in Africa and maybe beyond, we hire women operators for the RTGs. We have four women in the RTG operations working with us but they are there because they are capable. They have been through the screening process and are competent.

What kind of development has the investment brought to the TICT?

Since 2006, the market for Lagos ports has increased by 70 per cent per annum. In 2006, we had a total throughput in containers of about 4,000 to 5,000 TEUs. By the end of 2014, the Lagos port infrastructure has handled about 1.6 million TEUs. The ability of terminals including the TICT to manage that growth has been clearly through infrastructural change, equipment mobilisation and strengthening of team and team competencies in combination with relevant authorities. We are still confident that should a number of actions be taken, we would be able to optimise further the capacity of Lagos ports.

What kind of actions are you talking about?

I would say the road infrastructure is an important element. Probably also improving the depth of the water from the approach channel and the turning basin so that the nautical conditions in and out of Lagos ports which is a work in progress are right. Currently, the nautical conditions to and from Lagos ports are quite improved from what they were in 2006. This improvement was necessary for the evolution of the kind of vessels that come through Lagos ports. I am confident that they will continue because they will help cope with developing volumes as much as the external road infrastructure leading to and from container terminals will, if improved.

It is clear that the roads have become some sort of punishment for the ports and traders in the vicinity. It is an area that needs to be looked into in the very near future. Although some work has begun in the Tin Can/Apapa area, it is our expectation that the infrastructure within a 10km radius to and from the ports would be refurbished within a reasonable time frame. This will help definitely to improve port operations by easing the movement of trucks to and from ports. We would then be able to achieve even higher volumes without a deteriorating congestion. If roads and bridges are brought back to standard conditions, this would allow for decongested traffic even with higher volume to the ports.

How are you dealing with the problem cargo congestion and trucks having difficulty getting out of the TICT terminal?

I don’t know where this claim is coming from. If that was to be case, since this is a very competitive market, ocean liners that berth at our terminal would no longer do so because they have the opportunity to use alternative facilities. Realistically, if we are handling what we are handling, which is within our capability, it means that shipping lines recognise our contribution to the business. We are also confident that on the land side, our performance is also acceptable. I believe we are a good performing terminal on the landside. We have put a lot of efforts to operate 24/7 and continue uninterrupted operations on the land side, throughout the year. We are soon introducing additional features to smoothen the administrative process with the TICT. That is an e-platform, which will allow for invoicing payment and terminal release online 24/7. Current manual processes will be complemented by an automated one. Clearing agents on behalf of importers will have the opportunity to maintain a manual process and over time shift to the e-manual platform, which will be operational by the last quarter of this year.

Concerning the movement of trucks out of the terminal, the turnaround time of trucks, gate-in-TICT to gate-out-TICT is one hour. Obviously, we can only measure our performance from the time a truck comes to our gate to the time it is allowed to be released from our gate. That turnaround time is approximately one hour. What is important to understand is that as a terminal operator, we can only act within our area of concession. We can’t account for what happens outside our terminal. That doesn’t mean that everything that needs to be done has been done particularly outside the terminals. There is a lot more that can be done outside the terminal gate. We are actively cooperating with the Nigeria Customs Service, the Nigerian Ports Authority as we have been doing since 2006. Because at the end of the day if the infrastructure of the Lagos ports has been able to absorb the growth that I mentioned, it is not as a result of a one-sided performance. It is a collaborative effort where stakeholders have cooperated and identified areas of improvement, worked upon those areas step by step, allowed the processes to be more efficient to the extent we have reached the level of throughput that we observed last year. I believe that if we could achieve those improvements from 2006, we are certainly capable of achieving additional improvements in the years ahead.

What form of access control do you have at the TICT?

Any terminal in the Lagos port has to be ISPS certified. As operators of the TICT have an obligation to be ISPS certified and to achieve that we need access control. We have in place procedures that allow us to control people who come into our container terminal both for security and safety reasons. It is an industrial environment and in the case of Lagos container terminals including TICT, you have primarily a gateway cabin, which means import/export. We combine ship side with landside operations. It is quite essential that we segregate the number of activities to the extent that we avoid the greatest number of possible pedestrians within our operational area. We have even introduced biometric access control for our employees coming to work at the TICT. People do not just walk about indiscriminately.

How has the harsh economic situation affected the business operation at the TICT?

It has not been a very rosy year for a number of reasons with the unstable dollar/naira exchange rate, which means the cost of imports has gone up. We saw a year-on-year trade evolution probably about 15 per cent down compared to the same period last year. We are starting to see a bit of a change, closer to the level observed in 2014. So, it is our estimate that by the end of 2015, the market will be lower probably within the minus five or minus 10 per cent range versus full year 2014.

It is a big impact because the charges that are being applied have more or less remained on equal level versus what they were in 2006. Meanwhile, the naira to dollar parity has gone from 125 to 215. The combined effect of lower volumes and stable rates versus depreciating naira versus dollar has put a lot of pressure on terminal operators.

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