Three major shipping lines have navigated their vessels away from West African sea route as a result of freight rate crash in the region.
For the past four months, some vessels bringing goods into the country have diverted to other profitable routes due to crash in the freight rate. Major shipping line such as Nippon Yusen Kaisha, NYK Lines, (operated by Japanese) company; Taiwan’s Evergreen Line, and Messina Line has been force to withdraw it’s sailing course from West Africa route due to growing losses as a result of the twin jeopardy of low freight rates and declining volumes.
The top Japanese shipping line had operated the Asia-West Africa service, which it dubbed WAX, alongside Hapag-Lloyd and Gold Star Line (GSL). The service featured two calls in Nigeria, Lagos-Apapa and Lagos-Tincan. Evergreen Line has also announced the withdrawal of its vessels from the Asia-West Africa route, which had regular calls at the Lagos Port Complex Apapa.
Hull Blyth Nigeria Limited, which acts as shipping agent to Evergreen Line confirmed the withdrawal of the service to the media. In his responds the Managing Director of Hull Blyth, Christian Holm said:
“After three years of serving the market, Evergreen decided to discontinue their service due to losses sustained due to widening disparity between rate levels and costs.
“Rate levels, especially from Asia, have fallen over 50 per cent in the period with the cost levels remaining disproportionate.”
Speaking in similar vein, Chairman, Shipping Association of Nigeria, (SAN) Mr. Val Usifo, described the development as a dire situation.
“The withdrawal of shipping services by these firms does not affect Nigeria alone but the entire West African region.
“It is a serious situation; it is not only that the traffic is down, the freight rates have virtually collapsed. Importers are finding it difficult to pay for their imports because of the restriction in dollar.”
This as some believe will not stop at just withdrawn of only three shipping lines. According to a UK-based maritime analyst, Drewry of Shipping Consultants Limited believes more lines will quit the Asia-West Africa route as container volumes continue to fall.
He said the situation on the trade had gone from bad to worse and has shown no sign of recovery.
Cargo volumes, which have dropped by more than 30% in a year and together with the fast-depreciating naira, which has lost more than 100% of its value in less than two years, has exacerbated pressures on shipping lines and terminal operators some of whom were forced to cut their workforce in 2015.