Nigeria’s inadequate ports delay DHL’s plans to extend LCL container service

In depth
This article is part of the dossier: Logistics in Africa

By David Whitehouse
Posted on Monday, 25 April 2022 06:00, updated on Wednesday, 27 April 2022 11:02

Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa.
Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa.

DHL wants to extend its less than container-load (LCL) service to Nigeria, but its plans are being delayed by lack of infrastructure at the country’s ports, Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa, tells The Africa Report.

While there are some signs of improvement, “we need the infrastructure to be better,” Diallo says in Dubai. More efficient ports would mean “a huge acceleration in growth” in Nigeria and West Africa, he adds.

LCL means that when a customer’s goods do not fill a container, the container is split between different orders. The service is aimed at small businesses who may not be importing at sufficient scale to justify a full load, and only pay for the space they need.

Nigerian ports are among the least efficient in the world. Problems include lack of equipment such as scanners, the fact that multiple official agencies operate at the ports, the risk of piracy before ships even get there, heavy traffic congestion and poor roads. A backlog of unclaimed containers compounds the inefficiency. According to report from Vanguard last year, the Nigerian Ports Authority said that the ports contain over 6,000 abandoned containers, including 1,800 vehicles, some of which have been taking up space for over 20 years.

The country is trying to upgrade capacity, notably through the construction of a deep water port at Lekki in Lagos Free Zone which aims to slash waiting times for ships. The first phase of the port is scheduled for completion later this year. The Nigerian Maritime Administration and Safety Agency (NIMASA) has also started a digital system for sailing certificates and cargo processing.

The danger for Nigerian small businesses is that improvements will come too slowly and they will be left behind by regional competitors who can access such services.

  • DHL’s LCL offering, which exists in South Africa, Ghana, Kenya and Egypt, was extended to Angola on April 20, with a new hub being opened in Luanda.
  • It is being implemented in Morocco and company also wants to include Senegal and the Côte d’Ivoire.
  • Diallo says he wants to extend the service to Nigeria, but doesn’t know when it will be possible.

Renewable energy

DHL employs about 17,000 people in Africa and operates in almost all its countries. It has three main divisions, the express courier service, supply chains and global forwarding, which includes sea, air and road freight.

The company is working to increase its use of renewable energy sources. Biofuels have reduced emissions in shipping, and the company aims to do away with the carbon credits it currently needs to offset “last mile” delivery.

  • DHL is piloting a project in Dubai where solar panels are installed on the roofs of its warehouses, and aims to roll this out in South Africa by the end of the year.
  • The longer-term aim is to use solar panels across Africa. The constraint, Diallo says, is the need to find solar equipment suppliers in all the markets.

Bottom line

Small Nigerian businesses who need to import are being left at the sharp end.

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