Presentation to the 13th Round Table Conference of PMAWCA By Jean-Philippe Paquin Ports & Marine Practice Leader

1. Jean-Philippe Paquin
Ports & Marine Practice Leader
June 29th, 2015
Abidjan, Côte D’Ivoire
Port Transit Costs
Presentation to the 13th Round Table Conference of PMAWCA

2. • Large number of
ports
– Essential gateways
• Limited land access
– Source of congestion
• Every port wants to
be a hub…
A continent served through ports
2

3. An unforgiving equation for African ports
3
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

4. • 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
4

5. An unforgiving equation for African ports
Cargo Imbalances
5

6. An unforgiving equation for African ports
Low Productivity
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7. Countries Ghana Nigeria Tanzania Kenya
Offloading $180 $130 $140 $160*
Wharfage $79.50 8300 NGN ($42) 1.6% a.v. $105
Handling 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
7
Port Transit Costs in Africa are significant
Typical costs for 40’ import container
* Lowered if the container is assigned to an ICD
** + Survey fee of $100

8. • 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…
8
Other players add up other charges

9. If we tried to “spread the blame”…
9
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%

10. • 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
10

11. 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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12. 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…
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13. 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.
13

14. – 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 Collaboration
P 4 Alliance Ports Public Private Partnerships (PPPP)
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15. 15
Questions and Discussion
Jean-Philippe Paquin
Ports & Marine Practice Leader
jpaquin@cpcs.ca
T: +1 613 237 2500 | F: +1 613 237 4494 | www.cpcs.ca