Joy Dimka, Senior Legal Officer, Nigerian Shippers' Council.
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Subjects of Interest
- International Trade
- Law and Society
Utility of flat-bottom barges in Nigeria’s cargo transportation 16 Nov 2023
Global trade, as a percentage of the world’s total output, was 56.5 percent in 2021. According to the World Trade Organisation, the global trade volume and value have expanded 4 percent and 6 percent respectively on a yearly average since 1995. And despite the sluggish global economic output in 2023, trade grew by 1.9 percent in the first three months of the year, adding about $100 billion to the world’s economy.
Transport and logistic systems are known to facilitate international trade and the development of local economies. Depending on the level of the development of an economy, transport and logistics could contribute between 5 and 20 percent of its GDP. This shows trade on the one hand, and transport and logistics on the other, are strong components of economies, and there is a mutual dependency of the two sectors.
Nigeria has not been able to grow its trade sector adequately because of the weaknesses of its transport and logistics systems. Movement of cargo in the country is constrained by infrastructural deficiency, poor linkages in the modes of transportation, and poor regulatory performance. These make the cost of cargo transportation very expensive – sometimes unbelievably so. As the country aims for a quick economic turnaround under the administration of President Bola Tinubu, it is important to look for quick-fix solutions in this sector that can literally and figuratively lift the country’s economic output.
There are efforts to expand Nigeria’s transport system. These include greenfield and brownfield projects in rail and road infrastructure development. The demand for these projects is considerable on the human transportation side because of the large and fast-growing Nigerian population. Enough attention has not been given to cargo transportation. For instance, the country boasts seven inland dry ports, but only two of them are operational. The seaports in Lagos, Calabar, Warri, and Onne witness daily arrivals of nearly 20,000 vessels, overwhelming their cargo-handling capacities. The spillover effects of the congestion include chaotic conditions on the roads near the ports, compounding the difficulty in getting cargo to the hinterlands.
The congestion at the main port in Lagos has become so acute that it can cost more than $4,000 to truck a container over 20 kilometres to the mainland. This is almost as much as it costs to ship the same cargo over 12,000 nautical miles from China. The local cost of cargo transportation will rise higher on account of the increasing cost of fuels and if cheaper alternative modes of transportation are not developed and integrated.
To solve these problems, there is the need to develop a multimodal transportation system in the country, with specific consideration for cargo movement. One of the solutions that are being developed in this regard is the Sealink project. Sealink, which is being facilitated by Nigerian Export-Import Bank (NEXIM Bank) in partnership with industry stakeholders and financiers, aims to put the country’s inland waterways into commercial use for cargo transportation. Sealink is currently piloting its operations and has deployed some flat-bottom barges, even as efforts to improve the inland water channels are ongoing, following the recent charting of the Lower River Niger, which was also facilitated by NEXIM Bank working with other government agencies and its partners.
Barges have a historical presence dating back to the pre-industrial revolution in Europe, where they served as the primary method for transporting cargo across areas connected by small water bodies, hinterlands, and inland dry ports. However, with the advent of the industrial revolution and the invention of steam engines and trains, the demand for barges as cargo transporters diminished due to speed limitations.
However, flat-bottom barges are versatile vessels and can play a pivotal role in ensuring the smooth movement of goods and raw commodities, thereby unlocking new possibilities for maritime trade in Nigeria. They have their place in a multimodal transportation system and can help reduce cost. Flat-bottom barges are faster to deploy and can navigate shallow waters. The advantages they offer include environmental sustainability and adaptability.
Barges are not standalone vessels but are typically towed or pushed by other vessels. A typical barge measures around 195 by 35 feet and can carry up to 1,500 tons of cargo. The flat-bottom design for barges enhances their cargo-carrying capacity, making them efficient for the transportation of bulk cargo.
There is bound to be concern about risk in using this means of cargo transportation, including in a multimodal system construct. To manage the risk, it is essential to adopt or adapt international agreements that provide a framework for the regulation of multimodal transportation systems. These agreements are designed to harmonise and streamline the legal aspects of transporting goods across different modes of transportation. One notable example is the United Nations Convention on International Multimodal Transport of Goods, commonly referred to as the 'Rotterdam Rules.' These rules seek to establish uniform standards for the international carriage of goods, addressing key aspects such as carrier liability, documentation, and dispute resolution.
The Rotterdam Rules have not been universally adopted. Nevertheless, they serve as a significant step towards creating a coherent legal framework for multimodal transport. In addition to international agreements, some countries have their national laws and regulations that govern their transportation systems. Understanding the legal provisions is crucial for businesses and stakeholders involved in the movement of goods to ensure compliance and effective risk management.
In addition to international agreements and conventions, another critical element in the realm of international trade and multimodal transportation is the use of Incoterms, or International Commercial Terms. Incoterms are internationally recognised standards that define the responsibilities and obligations of buyers and sellers in the sale of goods. They help specify crucial details, such as the point at which risk transfers from the seller to the buyer, the division of transportation costs, and the required documentation.
By choosing the appropriate Incoterms in their contracts, businesses can ensure clarity and efficiency in international trade transactions, regardless of the chosen mode of transportation. Understanding and effectively utilising Incoterms can be a valuable tool for Nigerian businesses looking to optimise multimodal transportation strategies, including the integration of flat-bottom barges.
Flat bottom barges represent an underutilised and highly adaptable option to address the challenge of inland connectivity. These watercrafts characterised by their shallow draft and flat bottoms are designed for navigating rivers and canals, making them ideal for connecting seaports to hinterland locations.
To harness the potentials of flat-bottom barges effectively, several actions must be taken. Investment in inland waterway infrastructure is critical to ensure safe and navigable routes from seaports to the hinterland. Dredging, maintenance, and modernisation are necessary to accommodate these vehicles.
Joy Dimka is a Senior Legal Officer at the Nigerian Shippers' Council.