ONNE COMPETITION STAKES RAISED

It has been a long time since a signifi cant new player has been able to commence operations in Nigeria’s main ports. Now this has changed with International Container Terminal Services Inc. (ICTSI) commencing multipurpose operations at Berths 9-11 in Onne Port in Eastern Nigeria.

Undoubtedly this has breathed new life into a limited competitive situation in Onne where the existing major players, the West Africa Container Terminal (WACT) operated by APM Terminals and Onne Port Terminal FOT operated by Intels, have enjoyed something of a monopoly in their respective fields of activity, container handling and servicing the oil and gas industries respectively. ICTSI by declaring its intention to service both sectors has basically breathed new life into the competitive environment on a broad basis.

In early May, ICTSI announced the arrival of the first container vessels, MSC Floriana and PIL lines’ Kota Sejarah, at its newly established terminal, Onne Multipurpose Terminal (OMT). ICTSI handled the vessels with its two new Gottwald 7-series jumbo mobile harbour cranes.

In a media statement at the time, ICTSI points out that the opening of its facility doubles terminal capacity in the region and that this capacity uplift is urgently needed due to ongoing congestion in Onne. This concurs with comments from the shipping line sector that particularly point out with regard to the WACT that extended waiting times, sometimes weeks not days, can apply when waiting for an available berth. Handling on the berth has also been known to take up to a week.

For container vessels operating in conjunction with published schedules, this is obviously far from acceptable from a customer satisfaction perspective and also has significant negative implications from a cost point of view.

INTERESTING REACTION

There has been some interesting reaction to ICTSI’s arrival in Onne with the most vocal by far being from Intels. Gabriel Volpi, the Italian magnate whose company Intels has dominated Onne Port since the 1980s, has protested ICTSI’s arrival, claiming that Intels is the rightful operator of the area occupied by OMT.

Indeed, Intels has gone so far as to take the Nigerian Ports Authority to court over the berths, and is running one-page advertisements in national newspapers claiming to be a victim of ICTSI who, it suggests, has “unlawfully occupied” land belonging to Intels. Informed sources confirm, however, that ICTSI has a legitimate contract with the Nigerian Ports Authority, which was signed in the first half of 2020.

Further, ICTSI has made significant investments in Onne Port and the company’s presence is clearly welcomed by the shipping lines and end-customers who see the capacity and introduction of competition in Onne as necessary to increase the port’s productivity and customer service standards. The court cases nevertheless remain ongoing.

It is to some extent understandable that Intel’s ‘nose is out of joint’ at being joined by a competitor in a place that hitherto has been its stronghold since the 1980s and which industry insiders recognise has been operated as a monopoly with the associated ability to ‘print money.’ The general feedback is, however, that the emergence of a new terminal operator in Onne comes following a decline in Intel’s ability to maintain its monopoly.

A combination of growing criticism from Intels’ customer base about the high cost of doing business with the company, deteriorating performance and the growing incidence of public disputes including with the Nigerian Port Authority have not strengthened its hand when seeking to maintain its influence and power base.

History does in fact record that at one stage all the oil majors were forced into using Intels for their logistics requirements in Nigeria and as a result the company was able to charge rates identified by some as the highest in the world.

TIME FOR CHANGE

ICTSI has clearly arrived in Onne Port when there is a manifest need for new competition. According to port users, it is a welcome change and one that represents progress in the nationwide drive to deliver competitive port and logistics services. ICTSI has declared its willingness to further invest in OMT over and above the US$35 million already invested and as such further competitive initiatives can be expected.