Jean-Philippe PaquinPorts & Marine Practice LeaderJune 29th, 2015Abidjan, Côte D’Ivoire

Port Transit CostsPresentation to the 13th Round Table Conference of PMAWCA

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• Large number of ports– Essential gateways

• Limited land access– Source of congestion

• Every port wants to be a hub…

A continent served through ports

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An unforgiving equation for African ports

INHERENT CAUSES• Transhipment• Cargo Imbalances

OPERATIONAL CAUSES• Low Productivity• Congestion delays

TRANSACTIONAL CAUSES• Filing Delays• Almost 100% Customs

Inspection

BEHAVIORAL CAUSES• Voluntary Dwell

Time

+

+ +

= High port transit costs

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• North Africa is close to Europe-Asia trade route– Strong competition for transhipment ports

• Sub-Saharan Africa off major trade routes– Many containers are transhipped

Growing, but not there yet… means transhipment

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An unforgiving equation for African ports

Cargo Imbalances

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An unforgiving equation for African ports

Low Productivity

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Countries Ghana Nigeria Tanzania Kenya

Offloading $180 $130 $140 $160*

Wharfage $79.50 8300 NGN ($42) 1.6% a.v. $105Handling for customs -- 3000 NGN ($15) $90 $120**

Storage $5 to $25 (3 to 8 days)

$60 to $110(9 to 15 days)

$60 to $160 (3 to 8 days)

$180 to $430 (3 to 8 days)

Removal -- $32 $100 $165

Indicative total $270-290 $280-330 $400-490 $700-950

Port Transit Costs in Africa are significantTypical costs for 40’ import container

* Lowered if the container is assigned to an ICD** + Survey fee of $100

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• Other charges including pilotage, berth occupancy, mooring and various vessel charges, which, once spread over the number of TEUs on the ship, amount only to a few dollars

• Shipping agent, clearing agent and freight forwarders all have their own charges, which can add up…

Other players add up other charges

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If we tried to “spread the blame”…

INHERENT CAUSES• Transhipment• Cargo Imbalances

OPERATIONAL CAUSES• Low Productivity• Congestion delays

TRANSACTIONAL CAUSES• Filing Delays• Almost 100% Customs

Inspection

BEHAVIORAL CAUSES• Voluntary Dwell

Time

+

+ +

= High port transit costs

25-30%

40-60% 25-40%

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• Ports are an interface between sea and land– Not a destination– Not a storage facility

Ports reach the capacity of their connections

Need to improve

• Customs Processes• Rail Capacity• Marine Waterways Capacity

(where available)• Implementation of Corridors

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And the best is yet to come

Source: BBC

What we see

What we will get!(eventually)

• Ports in Africa will be facing challenges– Draft/Capacity– Productivity

Leading to– Port extensions?– Greenfields?

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Stretching already strained capacities

Port extensions Greenfields• Build upon existing

• Lower development risks / delays

• Capital efficient

• Limited capacity increased

• Long gestation (ever heard of vaporware?)

• Heavy capital requirements

• Large (and lumpy) capacity increase

• Everybody wants to be a hub…

CPCS Corporate Profile

Specializes in formulating infrastructure development solutions for public and private sector. Seeks to make transport infrastructure projects a reality, and focus on facilitating sources of investment and in improving the efficiency and effectiveness of transit networks worldwide.

CPCS has completed over 1000 assignments in over 80 countries for governments, international financial institutions, private investors, transport operators and industry associations.

CPCS is headquartered in Ottawa Canada, and has offices in the US, Kenya, Uganda, Nigeria, Bridgetown, and India.

CPCS is comprised of 80 staff and includes market analysts, economists, financial analysts, former transport sector executives, infrastructure engineers, institutional specialists, transport sector lawyers, and project managers.

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– Grouping of Canadian and African port authorities and infrastructure and services advisory firms

– Platform for the exchange of ideas for the sustainable development, financing and implementation of port infrastructure and services across the African continent

– Facilitate access to Canadian capability, contracting mechanisms and financing/insurance products

CPCS - Initiating CollaborationP 4 Alliance Ports Public Private Partnerships (PPPP)

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Questions and Discussion

Jean-Philippe PaquinPorts & Marine Practice Leaderjpaquin@cpcs.caT: +1 613 237 2500 | F: +1 613 237 4494 | www.cpcs.ca