THE EFFECTS OF LOGISTICS MANAGEMENT ON PERFORMANCE OF NIGERIAN MARITIME INDUSTRY


THE EFFECTS OF LOGISTICS MANAGEMENT ON PERFORMANCE OF NIGERIAN MARITIME INDUSTRY  

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

It is expedient to note that, over 90 percent of International Trade is done by sea or carried by ships.  It is believed that on daily basis, these ships move millions of tons of cargoes comprising goods and commodities, fuel, crude oil, raw materials, machinery and equipment, foodstuffs, medicaments, around the world. The situation is not different in Nigeria, being a member of international community. It is estimated that well over 90 percent of her visible international trade is sea borne. The maritime industry, if effectively harnessed, has the capacity to be a big factor in the national economy; with revenue at maximum potentials, capable of competing with oil and gas revenue. Maritime revenue can be a major contributor to the Gross Domestic Product (GDP) of a nation. Gross domestic product (GDP) estimates are commonly used to measure the economic performance of a whole country, but can also measure the relative contribution of an industry or sector. The economic growth of a nation depends on how efficient and cost effective, the port is operated and managed. Just as the economic growth of a nation demands for port facilities, also the port facilities must be run or operated efficiently to enable further economic growth or expansion (Emeaghara, 2008). The World Bank's logistics Performance Index (LPI) and United Nation Conference on trade and Development (UNCTAD's) Logistics and Supply Chain Index( LSCI) are targeted at  espousing information about countries trade competitiveness in the area of transport and logistics (Jean-Francois and Lauri, 2014).

Due to the trend of nationalization and globalization in recent decades, the importance of logistics management has been growing in various areas. For industries, logistics helps to optimize the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of enterprises. The key element in a logistics chain is the transportation system, which connects the separated activities. Transportation occupies one-third of the amount in the logistics costs and transportation systems influence the performance of logistics system hugely (Tseng, Yue and Taylor, 2005). Transportation is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum.

Maritime industry plays an important role in international freight; it can provides a cheap and high carrying capacity conveyance for consumers. Therefore, it has a vital position in the transportation of particular goods, such as crude oil and grains. Its disadvantage is that it needs longer transport time and its schedule is strongly affected by the weather factors. To save costs and enhance competitiveness, current maritime logistics firms tend to use large scaled ships that incorporate operation techniques. Moreover, current maritime customers care about service quality more than the delivery price. Thus, it is necessary to build new logistics concepts in order to increase service satisfaction, for example real-time information, accurate time windows and goods tracking systems. The operation of maritime transport industry can be divided into three main types: (1) Liner Shipping: The business is based on the same ships, routes, price, and regular voyages. (2) Tramp Shipping: The characters of this kind of shipping are irregular transport price, unsteady transport routes, and schedule. It usually delivers particular goods, such as Dry Bulk Cargo and crude oil. (3) Industry Shipping: The main purpose of industry shipping is to ensure the supply of raw materials. This sometimes needs specialized containers, such as the high-pressure containers for natural gas (Tseng et al, 2005).

It is important to note that economic growth partly depends upon moving goods efficiently and safely through the transportation chain. Since the current scenario of world trade goes to cellular vessels, thus the demand for transportation of goods via sea increases tremendously. In view of this, more and more terminals are expanding in order to cater for available demand (Olayinka and Ogundele, 2015). In other words, improved supply chain and logistics (seaport development) will guarantee trade expansion and larger foreign direct investment. This means that transportation and logistics improvements are critical to trade flows and the competitiveness of an economy’s exports and imports.

Logistics management is very critical for the performance of maritime industry in Nigeria because of its complex nature. Logistics management is needed more than ever before in order to facilitate movement of cargoes from one location to another in efficient and effective manner.  Tilanus (1997) uses ‘five important key terms’, which are logistics, inbound logistics, materials management, physical distribution, and supply-chain management, to interpret the concept of logistics.   Logistics is the entire process of materials and products moving into, through, and out of firm. Inbound logistics is the movement of material received from suppliers. Materials management describes the movement of materials and components within a firm. Physical distribution refers to the movement of goods outward from the end of the assembly line to the customer. Finally, supply-chain management is somewhat larger than logistics, and it links logistics more directly with the user’s total communications network and with the firm’s engineering staff.

Moїse and Bris (2013) suggest that improvements on physical infrastructure, proxied in a single index by the quality of ports, airports, roads and railroads, bring the greatest benefits in terms of export performance. Furthermore, gravity-based estimates show that, although the marginal effect of physical infrastructure is increasing with per capita income levels, it remains positively large and significant at all levels of developments. 

Simulations show that investments in physical infrastructure (to the level of the regional hub) bring the greatest trade gains in magnitude even for developing economies, suggesting that building high-quality hard transport infrastructure (deep seaport development) should be a high priority to nations( Moїse and Bris 2013).

Tseng et al (2005) further observe that logistics is a process of moving and handling goods and materials, from the beginning to the end of the production, sale process and waste disposal, to satisfy customers and add business competitiveness. It is ‘the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimising the goods- or service-producing network to fulfil customer requests; and utilizing the network to meet customer requests in a timely fashion (Tilanus, 1997). In a nutshell logistics is customer-oriented operation management.

However, Nigeria Maritime industries is coordinated by Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA).Shipping of cargoes from abroad to Nigeria and from Nigeria to other countries are critical for effective movements of goods and services which in turn facilitate economic development of the country. Maritime industry occupies a very prominent position in the economies of nations all over the world and the industry is one of the sectors that contributes greatly to Nigeria’s internally generated revenue (IGR) as well as GDP (Ndikon, 2013).

The industry in its strict sense embraces all business activities which take place within the maritime environment (Ndikon, 2013).These includes offshore economic activities such as fishing, salvage, towage, underwater resource exploitation/extraction, and onshore economic activities in ports, shipping activities, ship construction, repair and maintenance. Of all these, shipping stands out as the greatest boost to a nations economic growth and international status. This is because all other maritime activities revolve around shipping. The oil and gas sector, for instance depends on shipping, as it is the vehicle that drives it, enabling it to make all the difference in an economy. Due to the close link between shipping activities and economic development, most nations cannot afford to toy with the industry (Ndikom, 2011).

Shipping as one of the world’s most international industries makes seaborne trade in a sense at the apex of world economic activity. As business has become more international, and newly industrialized countries have taken their place alongside the Organization for Economic Corporation and Development (OECD) countries, the maritime industry has provided the vehicle for an extraordinary growth of trade. This has also resulted to the progression from a world of isolated communities to an integrated global village. Shipping is a complex industry and the conditions which govern its operations in one sector do not necessarily apply to another. In terms of its main assets, the ships vary widely in size and type. They provide the whole range of services for a variety of goods, whether over shorter or longer distances. The shipping market is made of the liner shipping, tramp shipping, bulk shipping, the charter market. Shipping is essentially a service industry; hence, ship demand depends on several factors such as price, speed, reliability and security (Stopford, 2003).

Maritime transport is essential to the proper operation of any country’s economy and a vital part of a nations transport infrastructure. A minister of transport in the federal republic of Nigeria was once quoted to have said that transport is to the Nigerian economy what the artery is to the blood circulation (Igbokwe, 2011).

Olufunmilayo (2008) posits that maritime industry has for a long time been recognized as one of the strong catalysts for socio-economic development. Back in 1776, Adams Smith noted that “A business operating in a country without links to the outside world can never achieve high levels of efficiency because its small market will limit the degree of specialization”. This is because shipping is one of the cheapest and efficient modes of transportation over long distances, it has since the ancient times been at the forefront of opening up of the world, and thus a major driver of the process of globalization (Olufunmilayo, 2008). 

Shipping, especially container shipping, has been both a cause and effect on globalization. Container shipping could lay claim to being the world’s first truly global industry. In fact, container shipping could claim to be the industry which, more than any other, makes it possible for a truly global economy to work. It connects countries, markets, businesses and people, allowing them to buy and sell goods on a scale not previously possible. It is now impossible to imagine world trade, and ultimately our lives as consumers, without container shipping. Shipping has led to a phenomenal growth in world merchandise trade, which has consistently grown faster than output.

 Maritime industry is viewed as one of the most powerful socio economic and political forces that are shaping the world today. The phenomenon of shipping is moving the world towards increasing and irreversible integration of economic, social, cultural and political systems. Globalization through shipping trade has “decoupled time and space” resulting in the “death of distance”. Thanks to globalization, the once big world has been transformed into “one little village”. Shipping has been one of the main causes and effects of globalization. Shipping connects countries, markets, businesses and people, allowing them to produce, buy and sell goods on a scale not previously possible. It is effective logistics management in shipping that will facilitate quick delivery of cargoes. This therefore calls for a need to establish the impact of logistics management on performance of the maritime sector.

1.2 Statement of the Problem

Policy inconsistency has been one of the problems encountered in maritime sector in Nigeria, the issue of inadequate policy formulation and implementation; hence the contribution of the maritime sector to economic growth has been a subject of debate. Concessionaires in Nigeria’s seaports situated at Warri, Port Harcourt, Lagos, Calabar, Onne, and Sapele have recently listed obstacles to efficient operation. Inadequate power supply and incessant removal of management of government agencies in the nation’s maritime industry are some of the factors impeding the efficient running of the ports. The concessionaires, who spoke under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN) in commemoration of eight years of port reforms, cited the aforementioned glitches to be affecting the effective and efficient running of the nation’s seaport. Other hitches are the arbitrary arrest of vessels at berth and attendant consequences, poor power generating system, friction among maritime statutory agencies due to overlapping functions and lack of national carrier capacity for the United Nation Conference on Trade and Development (UNCTAD) 40:40:20 carriage rights. The concessionaires that spoke through the, stressed that since they took over the running of the ports nearly a decade ago, they have been contending with these constraints.The poor implementation of the nation’s Cabotage Act 2003 was one of the factors militating against the growth and development of the Nigerian Maritime sector. It combines with poor implementation of the international port state control policy to encourage the visit to the Nigerian port by aged vessels with archaic handling facilities. In addition, the concessionaires condemned the proliferation of tank farms around the port locations, especially in Lagos, saying that they are constituting security risk to the ports and their users.

In a world of competitiveness, inefficiency in port operation and management brews high cost of doing business in ports which spells doom to the economy. In such a situation, the port inefficiency which manifest in delays and high costs of using the ports in an advantageous positions. Here, the neighbouring ports attract vessels and cargo traffic originally scheduled for Nigerian ports. The inability of the inefficient port to improve means total boycott of the port by the liner. Shippers as well as ship owners calculate a utility for each alternative port and choose the port which shows the highest utility or time efficiency. In other words, when a ship operator chooses a port of destination, he does not only think of reaching the port in time but also the reliability of leaving the port in time.

A higher utilization of the vessel will only be achieved if time in port is improved which will signify that fixed cost by the operator will be spread over increased number of voyage. This will consequently lead to reduced cost of ship operation. Traditionally; the turnaround time of a ship in port is a function of two variables namely:

(i) Waiting time or queuing time

(ii) Service time

The time of a vessel in port is high when either of the two is high compared to normal or the combination of the two.

Waiting time is always high when the demand for berths is higher than the supply. Here the major task of a port planner is to serve the annual vessels efficiently often referred to as the design capacity.In traditional maritime nations such as United Kingdom, USA, the Scandinavians, other European Countries among others, the factors of time, proper planning, co-ordination and implementation of clear-cut policies through government intervention largely account for the enviable levels of efficiency, sophistication and monumental success in their maritime activities especially in respect of its contribution to economic growth. The reverse appears to be the case in Nigeria as the fortunes of the industry have continued to suffer progressive catastrophe over the years.  A very near example is the fact that the Nigerian National Shipping Line (NNSL) which took delivery of 19 (nineteen) brand new tonnages from European shipyards in 1979 and 1980, has not only lost all her vessels but has been liquidated altogether. This is complicated by the inability of governments of different types to float an indigenous national carrier up till date.

However,the maritime industry is international in nature and  acknowledged to be a very dynamic component in the socio-economic configuration of any given maritime nation. Nigeria is no exception. Even land-locked countries such as Mali and Burkina - Faso in West Africa also hinge, their economic fortunes on the maritime sector relying as it were on the port of Abidjan for import and export transactions. The problems highlighted above pose some challenges to logistics management and are expected to affect performance of maritime sector. If the country does not imbibe the logistic management concept in her port operations vessels that suppose to birth in Nigeria will be diverted to neighbouring countries and the country will be losing revenue from that sector. If delay in clearing goods at country is poor will make cost of good to go up and the country product will not be competitive in the market. Lack of online checking will make physical checking tortious and time consuming adding to delay in clearing of goods and will lead to the payment  of additional fees at the port.

1.3   Objectives of the Study

The main objective of this study is to ascertain the effect of Logistic Management on Performance of Nigerian Maritime Industry.The specific objectives were to:

i. Determine the extent to which material handling  affects  service quality

ii. Ascertain the extent of the relationship between customer ordering processing and customer satisfaction

iii. Determine the effect of warehousing  on revenue of Nigerian ports

iv. Ascertain the nature of relationship between container traffic and GDP maritime sector contribution.

v. Evaluate the extent to which transportation influences cargo throughput of Nigerian ports.

1.4 Research Questions

With the above objectives in focus, the study seeks to find answers to the following questions.

i. To what extent does material handling affect service quality?

ii. What is the extent of the relationship between customer ordering processing and customer satisfaction?

iii. What is the effect of warehousing on revenue of  Nigerian ports?

iv. What is the nature of the relationship between container traffic  and GDP maritime industry contribution?

v. To what extent does transportation influences the cargo throughput of Nigerian ports?

1.5   Research Hypotheses

These hypotheses were proposed for the study:

i. Material handling  significantly promotes service quality

ii. There is a significant positive relationship between customer ordering processing and customer satisfaction

iii. Warehousing has a  positive effect on revenue of Nigerian ports.

iv There is a significant positive relationship between  container traffic and  GDP maritime industry contribution.

 v Transportation significantly enhances cargo throughput of Nigerian ports..

1.6 Significance of the Study

The study has a good number of components that would be beneficial to the operators of Nigeria maritime industry, scholars, students, corporate organizations and individuals. Logistics which is the main concept this study dwells on is needed by every organization to effectively facilitate its operations. Logistics management is critical to Nigerian ports because of number of activities that would be executed before importers receive their consignments. The key driver of logistics management is transportation which helps to create value along the supply chain.

The findings that will be established in the study will make important information available to the operators of maritime industry in Nigeria as well as other stakeholders.

Nigerian ports are crucial to Nigerian economy because maritime industry is one of the sectors that contributes greatly to internally generated revenue (IGR) of the country. Apart from oil and gas sector, maritime sector is one of the main focuses of the government. Hence, a work in this sector would be welcome by the government, the operators of maritime sector and other stakeholders.

The findings of the study would be useful to Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), Standard Organization of Nigeria (SON), National Agency for Food, Drug Administration and Control (NAFDAC) and Concessionaires amongst others for policy formulations and decision making.

The study will also close the knowledge and theoretical gaps through provision  of theoretical and conceptual approaches towards enhancing knowledge in management, logistics and logistics management with particular reference to maritime through publications in local and international journals.

1.7 Scope of the Study

The study was focused on impact of Logistics Management on the Performance of the Maritime Industry in Nigeria. Related studies on logistics, logistics management and performance with reference to Maritime industry in Nigeria and abroad were examined.

The study  evaluated logistics management in Nigerian ports through such variables as containerized cargo through put, bulk cargo throughput, dry cargo through put and liquid cargo throughput as well as container traffic.NPA and NIMASA websites visited in the course of this research for relevant information and data that may be useful in this study.

A review of theoretical and conceptual framework, methodology and empirical study relevant to this research was made. The study spanned  a period of 2007 to 2014 based on the period expected for data availability. Six ports in Nigeria that ie Lagos port complex, Tin Can Island port, Calabar port, Delta port, Rivers port/Port Harcourt and Onne port were considered in this study. A review of the activities of Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) in relation with the maritime sector were made. Data were sourced from NPA and NIMASA websites together with those of the six ports and CBN Statistical bulletin.

1.8 Limitations of the Study

The limitation of the study were:

Attitude of the Respondents 

Some of the respondents showed negative attitude towards the study because there was  no financial benefit attached ,Some refused to supply the necessary information required for fear of  leaking   the secret of their organization. The researcher was able to overcome this limitation through the help of the Managing Directors who sensitized and educated them on proper purpose of research as an academic exercise.   

1.9 Operational Definition of Terms

Maritime Industry: This  is  described as carrying on business, commerce and trade at sea by ship.

Gross Domestic Product (GDP): It is defined as  economic activities  that are concerned with total goods and services produced in a country and quantified in monetary terms. 

World Bank Logistics Performance Index (LPI): This is described as giving  out information about countries trade competitiveness in the area of transport and logistics.

Logistics: This is the management of inventory at rest and in motion. It is the transportation and distribution of goods and services.

United Nation Conference on Trade and Development Logistic and Supply Chain Index: This body generates information about countries trade competitiveness in the area of transport and logistics for decision making.

Baltic and International Maritime Conference (BIMCO): This body is based in Denmark and has been in existence for almost 100 years. It is a forum in which ship owners, organization and people involve in shipping business and industry meet to discuss matters affecting the industry and exchange useful information on the business. Baltic and International Maritime Conference (BIMCO) have played the role of centre for the exchange of information and possesses vast amount of information and database on world ports, facilities and exchange

Maritime Security Agency (MASECA): The body was formed in order to  oversee the issue of maritime workers welfare, safety and security in the maritime sector of the economic

Maritime Academy of Nigeria (MAN): This body was established to  produce technical manpower for the maritime industry.

I.10 Profiles of Nigerian Ports, Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA).

1. Lagos Ports Complex

Apapa  is where the Lagos Port Complex is located .Tin Can Island Port  serves Lagos and western Nigeria (Okwuosa, 2006). The economic door to the nation is Lagos Port Complex. It is also known as the premiere Port and is very well equipped with modern cargo handling equipment making which makes it very customer friendly and cost effective. The world class road and rail network  were constructed to make  the Port very attractive to its numerous customers and the terminals for  accessibility.

Apapa Port is the earliest and largest port of Nigeria. It is situated in Apapa, Lagos State, of South – West Nigeria. The Port was established and earmarked for development as a port in 1913 but construction of the first four deep water berths began in 1921.  It is the only port with the Four Wheel gate of about 8metres for oversize cargoes and this has given the Port, an edge over others in the handling of oversize cargoes. In the drive towards improving efficiency at our ports’, the landlord model was adopted for all the Nigerian ports by the Federal Government in the year 2003.

This culminated in the concession of the terminals at the Lagos Port Complex to private operators in 2006. As at today, there are five (5) private terminals at Lagos Port Complex and they are as follows: APM Terminals, ENL Consortium, Apapa Bulk Terminals, Green view Dev. Nig. Ltd and Lilypond- Inland Container Terminal. Apart from the Private Terminals, the Port has two Logistics Bases – Eko Support Services and Ladol (Lagos Deep Offshore Logistics) and many jetties.

The Port handles logistics solution for the Nigerian Oil and Gas Industry.

To consolidate on the achievement of Onne Port Oil and Gas Free Zone, the Federal Government granted approval and accorded Eko Support Berths 1, 11and 111 located within the harbour the status of a Free Zone on the 19th December 2014. 

However, the Terminal which has assumed the status of a full Port is equipped with facilities to enable her receive’ and handle Import and Export vessels with cargo not only destined for Oil and Gas Industry, but also for general commercial purposes. It is important to note that Eko Support Services has been rendering normal Port Services to Ocean Going Import & Export Vessels in the facility before the change of status to a Free Trade Zone.  Concession of terminals has resulted in the expansion of the port infrastructures. As a result, rendering of port services witnessed improved productivity and efficiency.

2. Tin Can Island Port

Tin Can Island Port  is located in Lagos and it came into existence as a result of  a merger of the port facilities at Roro and Tin Can Island in 2006.

3. Calabar Port

Calabar port is located  in the southeast corner of the country in Cross River State. Calabar is the home of the Eastern Naval Command of the Nigerian Navy. Port facilities were  located 55 nautical miles up the Calabar River.

Historically, the port served as an important focus of trade with the outside world for the Eastern States and a natural harbour for the Northern States of Nigeria right from the pre-colonial and colonial times. The Old Port was privately administered and operated by various shipping companies until December 1969 when the Federal Government took over the inadequate Calabar Port facilities from the erstwhile operators and vested it on the Nigerian Port Authority.

The development, modernization and expansion of the Calabar port was embarked upon under the 3rd National Development Plan of 1975–1980 in order to upgrade the port facility to cope with the ever increasing demand of our economy. The new port complex was commissioned on 9th June, 1979 and lies 45 nautical mile (about84km) upstream from Fairway Buoy.

Today, Calabar Port Complex comprises the following: the Old Port, the New Port and the Dockyard; and has jurisdiction over Crude Oil Terminals at Antan, Odudu, Yoho, QuaIboe; and other jetties at NIWA, McIver, NNPC, ALSCON, Dozzy, Northwest. The three Terminals of Calabar Port are operated by world class Terminal Operators; namely: ECM Terminal Ltd, INTELS Nigeria Ltd and Shoreline Logistics Nigeria Limited.

Calabar port’s profile in the oil and gas industry is fast gaining prominences as increasing number of Petroleum importers are finding it convenient to use the port due to the safe, serene and stress-free environment. Moreover, the presence of Calabar Free Trade Zone (CFTZ) within the Port offers unique advantage to investors in terms of duty waivers and other incentives. Besides, over 160 hectares of virgin land have been set aside for new port development investors.

4. Delta Port

Delta Port, Rivers Port and Onne Port are located in the petroleum and natural gas producing Delta region of Nigeria. Delta Port in Delta State includes the ports of Warri, Burutu, Sapele and petroleum terminals at Escravos and Forcados.

5. Rivers Port/Port Harcourt

The Rivers Port Complex in coastal Rivers State comprises Port of Port Harcourt, Okrika Refined Petroleum Oil Jetty, Haastrup/Eagle Bulk Cement Jetty, Kidney Island Jetty, Ibeto Jetty, Macobar Jetty and Bitumen Jetty. Management of port operations at Port Harcourt itself has been commissioned out to two port operators, Ports and Terminal Operators and BUA Ports and Terminal, it is not operated by the NPA. Like Delta State, Rivers State is a principal producing region of Nigeria.

6. Onne Port

Onne is located in Rivers State on Ogu Creek near the Bonny River, 19 km from Port Harcourt; the port area is located in three Local Government Areas of Rivers State, Eleme LGA, Ogu-Bolo LGA and Bonny LGA. The port consists of two major facilities, the Federal Ocean Terminal and the Federal Lighter Terminal. Onne Port has been designated as an Oil and Gas Free Zone by the government of Nigeria; currently over 100 companies have licenses to work at Onne Port; as an economic free zone it serves as a hub port for oil and gas operations throughout West Africa and Central Africa. 

7. Nigerian Ports Authority (NPA)

The Nigerian Ports Authority started operations in April 1955 following the implementation of the Ports Act of 1954(NPA,1964).In the beginning, the public corporation managed only the Lagos and Port Harcourt ports while some private companies managed the remaining Nigerian ports. In addition to managing cargo handling, quay and berthing facilities at the Lagos and Port Harcourt ports, the initial law also gave it the responsibility of managing harbours and approaches to all ports in the country. By 1963 the firm had grown successfully, it was operating a cargo ship from Lagos to Port Harcourt and also began dredging the Bonny terminal for oil operations, In the same year, the firm issued a £4.3 million loan stock in London.

From 1962 - 1968, under the Nigerian Development plan, the length of the quays was expanded and additional warehouses and cargo handling equipment were added. During the Nigerian Civil War that lasted from 1967-1969, only the Lagos Port was functioning and some parts of the port in Port Harcourt was damaged. In 1969, a new decree added Burutu, Calabar and Warri ports to its jurisdiction (Periscope 1982). The firm took control of the Warri port from John Holtand Burutu from UAC. However, by the early 1970's, the Lagos port was battling congestion. In 1973, the corporation entered into an agreement with the World Bank to finance expansion of facilities within the ports.

The Nigerian Ports Authority (NPA) is a federal government agency that governs and operates the ports of Nigeria. The major ports controlled by the NPA include: the Lagos Port Complex and Tin Can Island Port in Lagos; Calabar Port, Delta Port, Rivers Port at Port Harcourt, and Onne Port. Operations of the NPA are carried out in affiliation with the Ministry of Transport .The  head office of the Nigerian Ports Authority is located in Marina, Lagos (Maritime organization of West Africa, Central Africa, Nigeria (2015). However, with the concessioning  programme of the federal government, which is aimed at promoting efficiency through, public and private partnership, the Nigerian Ports, has since 2005, being concessioned. This landlord arrangement as they call it has fostered better relationship and high turn-out of goods and services in and around the Nigerian Port system either in the Eastern or the ever-busy Western zone.

Cement Armada

In 1974, the Nigerian Ministry of Defense began a programme of building various barracks to house almost all of its soldiers. Towards the end of the year, the Ministry began a process of issuing offers to various companies for cement delivery. Though less than 3 million tonnes of cement was needed yearly, the ministry ended up offering letters of delivery for 16 million tonnes to be delivered within a year  (Ibikunle,1976).  Other government agencies such as the Federal Housing Authority and the Nigerian National Supply Company also ordered about 4 million tonnes of cement to be delivered within a year. By the end of November 1974 to late 1975, about 400 cement ships berthed at the Lagos port leading to unprecedented congestion and increasing the turn around time of hundred of ships to 180 days.

Expansion

NPA accelerated the expansion of port facilities after the end of the cement armada. The government spent over 190 million naira to complete the Tin Can Island port with two roll on roll off facilities. It built a third wharf in Apapa and expanded facilities at the Warri and Calabar ports. It also constructed three lighter terminals in KiriKiri, Onne and Ikorodu (Financial Times, 1980).

Concessioning

During the administration of Olusegun Obasanjo, a ports reform programme was put in place to reduce inefficiency at the ports. The result was the concessioning of about 24 terminals to private operators for a certain period of time. NPA will continue to act as the landlord and provide common user facilities, technical oversight and other marine services. The private operators will be involved in loading and offloading of cargoes (Financial Times, 2016).

8. Nigerian Maritime Administration and Safety Agency (NIMASA).

The National Maritime Authority (NMA), predecessor of NIMASA, was established by the Shipping Policy Decree of 11 May 1987, and was supervised by the Federal Ministry of Transport. Its mandate was to ensure orderly development, protection and manpower training in the shipping industry. The NMA also was given responsibility for monitoring marine pollution and spillage in Nigerian waters(Amjadi et al,1996).The oil platforms off the Niger Delta are vulnerable, and the decree recognized the role of maritime cargo carriage in defense(Bamgboye,2007).

The Nigerian Maritime Administration and Safety Agency (NIMASA), formerly the National Maritime Authority (NMA) is responsible for regulations related to Nigerian shipping, maritime labour and coastal waters. The agency also undertakes inspections and provides search and rescue services (African Development Info, 2011). The governing board includes representatives of the Ministry of Labour, the Ministry of Transport and the Navy (Airahuobhor, 2011).

Cargo Allocation

The decree establishing the NMA applied the 40-40-20 principal defined by the United Nations Conference on Trade and Development (UNCTAD). This meant that 40% of cargo should be allocated to ships from the importers’ country, 40% to ships from the exporters’ country and 20% subject to open competition, which may include ships from other countries. For non-conference and bulk cargoes it went further, sharing on a 50-50 basis, with the NMA having authority to allocate all export cargoes (Bassey and Dokobo,2011).Despite this ruling, in practice the oil extraction companies supplied their own tankers to transport most of the crude to their refineries abroad (Udeme, 2011). However, members of the American-West African Shipping Conference said they had been arbitrarily denied shipments by the NMA, an issue raised several times by the United States government (Davis, 2011).In 1988 the NMA announced that it would be setting up freight booking offices in Liverpool, London, Hamburg, Paris, Tokyo, New York and Brazil. Dr. Bassey U. Ekong, Director General of the NMA, said the centers would record all inbound Nigerian cargos and would ensure "full implementations of UNCTAD's 40-40-20 principle". In the end, none of the offices opened (Ehirim, 2009).

Foreign Shippers

In 1988 the NMA granted six Nigerian shipping lines "national carrier" status, including the state-owned Nigerian National Shipping Line. The NMA had plans to extend this status to more domestic companies so as to reduce control of trade by foreign-owned lines (Iwori, 2011). For reasons of national pride, the NMA did not encourage domestic shipping lines to engage in feeder services, bringing goods to a distribution point for direct onward shipping, preferring direct-line services. An NMA official said in 1989 "the development of feeder services is not at the moment consonant with the region's maritime development". According to UNCTAD, the lines would have been best suited to feeder services and ignoring this approach may have led to their demise (Iwori, 2011).

Dependence on foreign shippers, who were carrying over 80% of cargo by 1992, made the country vulnerable. When the NMA attempted to impose a dock charge of $0.25 per metric tonne of crude oil loaded in Nigerian ports and oil terminals, the shipping companies threatened to go elsewhere, saying the charge would make Nigerian oil uncompetitive. The NMA had no choice but to suspend the fee (Nwalinu, 2005).The NMA charges on shipping lines that called into Nigerian ports were increased in 2003, with a surcharge being added to taxes on all Nigerian freights. In December 2004, based on recommendations from the World Bank government announced that all NMA charges would be scrapped as of January 2005. There were delays in implementing the change (Nigerian Compass, 2011).

NIMASA Activities

NIMASA was created on 1st August 2006 when the National Maritime Authority was merged with the Joint Maritime Labour Industrial Council. Both were formerly parastatals of the Federal Ministry of Transport (NIMASA News, 2011).Under the act establishing NIMASA, 5% of annual income would support the Maritime Academy of Nigeria (MAN) and 35% of income would be used to develop maritime infrastructure (NIMASA, about us, 2011). The agency provided funding to MAN for a jetty and boat project (Ogbouokiri, 2010). In December 2009 the agency said it was setting up a fund which would cover 40% of the cost of a nautical education, with the student being responsible for the remainder (Ola, 2011).

In June 2010 it was confirmed that NIMASA was encouraging Nigerians to enter the maritime industry. The agency was enforcing the directive that all ship operators engaged in the cabotage trade, whether Nigerian or foreign-owned, must have Nigerian cadets on board so they could gain sea-time experience. However, there was still a severe shortage of trained sailors (Ola, 2011). As of 2011 the agency was still spending large amounts on training Nigerians in India, Glasgow and Egypt because MAN lacked the capability to provide complete training. A government plan to open new training institutes was under criticism, since they seemed likely to be operated not more effectively than MAN (NIMASA, News, 2011).

In May 2011 NIMASA was mediating between the Seaport Terminal Operators Association of Nigeria and the Maritime Workers Union of Nigeria, who were seeking improved wages and terms of service Ola (2011).NIMASA was involved in the debate over a proposal to create a Maritime Security Agency (MASECA) as a successor to the Presidential Implementation Committee on Maritime Safety and Security (PICOMSS). The objective was to provide greater protection for merchant vessels against rising levels of piracy. However, NIMASA and the Nations were concerned that MASECA could be in conflict with the International Convention for the Safety of Life at Sea, which does not allow merchant ships to be armed(Olukoju,2004).The MASECA Act also seemed to be in conflict with the Act establishing NIMASA.OT Africa Line(2011).

In June 2011 the agency promoted over 60% of its staff, including 135 junior staff who were promoted to the next grade levels, and 536 senior staff Shipping position (, 2007). Also in June 2011, it was announced that NIMASA would be acting as the approving authority and guarantor for beneficiaries of a new Cabotage Vessels Finance Fund, this time administered by banks, replacing the former Ship Acquisition and Ship Building Fund(Ships and ports,2007).

Leadership

Dr. Bassey U. Ekong was the Director General in 1988. Director General Alhaji Munir Jafar’ was replaced by Buba Galadima, who was Director General of the NMA from 1996 to 1998(The Nations, 2009). Galadima was said to have diverted funds from the NMA to the transmutation campaign of General Sani Abacha. He was succeeded by John Egesi, a maritime economists(Ship and ports,2007).Egesi, who had been promoted from within the organization, was dismissed after only three months due to internal intrigues(World stage news,20011).

Dr George Mbanefo Eneh was appointed Director-General of the National Maritime Authority in 1999. Eneh, a Bank transport expert, was followed after a year by Architect Ferdinand (World stage news, 2011). Agu served for four years, being reappointed for a second term during the tenure of Abiye Sekibo as Transport Minister. He was dismissed in December 2005.Agu was replaced by Engineer Festus Ugwu, who was followed by Mrs Mfon Ekong Usoro, a maritime lawyer (USTR, 1993).Usoro was succeeded by Dr. Shamsideen Adegboyega Dosunmu, who holds a PhD in public administration, and was appointed in May 2007. Dosunmu had been promoted from the job of Executive Director, Finance and Administration of NIMASA. He was followed by Temisan Omatseye, a maritime lawyer.

In 2009, President Umaru Musa Yaradua appointed Senator Baba Tela as the Board Chairman of NIMASA.

As of June 2011 the Chairman of the board was Alhaji Adamu Mu'Azu, and the Director General and Chief Executive Officer was Zaikede Patrick Akpobolokemi (African Development Info,2011). Akpobolokemi had been appointed by President Goodluck Jonathan on 22 December 2010.He was a lecturer at Niger Delta University before being appointed to succeed Omatseye. Akpobolokemi was sacked in July 16th, 2015 and later arrested by the Economic and Financial Crime Commission (EFCC).

Dr. Dakuku Adolphus Peterside assumed duty as the Director General/CEO of the Nigerian Maritime Administration and Safety Agency (NIMASA) on Tuesday March 15, 2016. The appointment took effect from 10th March, 2016.

NIMASA, MPA Singapore begin New Partnership

The Nigerian Maritime Administration and Safety Agency (NIMASA) and the Maritime and Ports Authority of Singapore have held a bilateral meeting to seek areas of collaboration between the two maritime regulators at the sidelines of the Maritime Regulators Forum holding in Singapore. 

The Director General of NIMASA, Dr. Dakuku Peterside met with his counterpart at the Maritime and Ports Authority (MPA) of Singapore, Mr. Andrew Tan where they pledged to collaborate for the benefit of both countries.

Dr. Peterside who told Mr. Tan that Nigeria has huge maritime potentials that have remained untapped also called on Singapore investors to take advantage of the reforms in Nigeria’s maritime sector to invest in the country.

He also requested partnership with the Singaporean authorities in various areas including technology acquisition for monitoring of the waterways, capacity building of personnel, support to upgrade maritime infrastructure as well as acquisition of more ocean going vessels for indigenous operators.

Dr. Peterside assured Singapore investors and indeed the global community of NIMASA’s commitment to focus on effective enforcement of all International Maritime Organizaion (IMO) instruments for which Nigeria is a signatory as well as build the requisite capacity of personnel and infrastructure for the execution of its mandate saying clean and safe oceans and security of ships operating in Nigerian waters remain a top priority.

In his comments, Mr. Andrew Tan who described Nigeria as the new destination for future maritime investments also expressed surprise that there was no institutional relationship between Nigeria and Singapore despite the fact that Singapore is the second busiest and first trans-shipment port in the world and Nigeria a major maritime hub in West and central Africa. 

The MPA Chief Executive further suggested that Nigeria can benefit from Singapore's well developed and excess maritime capacity while Singapore can benefit from Nigeria's huge market. 

He therefore invited NIMASA to take advantage of the several programmes available in MPA Academy of Singapore to build capacity of its personnel while also leveraging on Singapore's ship building & maintenance expertise to get many Nigeria maritime players own their own vessels. Mr Tan also suggested a new level of cooperation between the two parties at IMO meetings.

References

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Basseye, C. O. and Dokubo, C. Q. (2011). Defence Policy of Nigeria, Capability and Context Author House. 

Chin-Yuan, K and Went C (2001) Mutual Shore Cranes Interference Exponent Study at a Container Terminal. Port of Kaohsiung Maritime Quarterly. 10(1) 65-67

Davis, S. (2011) On Watch: Maritime Security, Next (Nigeria). Retrieved 2011-06-20.

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Emeghara, G.C and  Ndikom, O. B. (2012) Delay Factor Evaluation of Nigeria Seaports (A Case Study of Apapa Ports Complex); Greener Journal of Physical Sciences 2(3)9

Emenyonu, U.M., Onyema, H. K., Ahmodu, K.O. and Onyemechi, C. (2016) Econometrics Analysis of Sea Port Development and Its Impact on the Economic Growth of Nigeria; International Journal of Advanced Research 4 (2)9

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THE EFFECTS OF LOGISTICS MANAGEMENT ON PERFORMANCE OF NIGERIAN MARITIME INDUSTRY



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