Following a crash in freight rates, three major shipping lines have withdrawn their vessels and diverted same to other routes in the past four months.
Due to crashing freight rates, it has become unprofitable for shipping lines to operate along the Asia-West Africa routes.
The shipping firms, Nippon Yusen Kasha popularly known as NYK Lines (operated by Japanese), Taiwan’s Evergreen Line, and Messina Line, were forced to withdraw from the West Africa route due to growing losses as a result of the twin jeopardy of low freight rates and declining volumes.
The top Japanese shipping line had operated the Asia-West Africa service, which it dubbed WAX, alongside Hapag-Lloyd and Gold Star Line (GSL).
The service featured two calls in Nigeria, Lagos-Apapa and Lagos-Tincan. Evergreen Line has also announced the withdrawal of its vessels from the Asia-West Africa route, which had regular calls at the Lagos Port Complex Apapa.
Hull Blyth Nigeria Limited, which acts as shipping agent to Evergreen Line confirmed the withdrawal of the service to the media.
Managing Director, Hull Blyth, Christian Holm, said: “After three years of serving the market, Evergreen decided to discontinue their service due to losses sustained due to widening disparity between rate levels and costs.
“Rate levels, especially from Asia, have fallen over 50 per cent in the period with the cost levels remaining disproportionate.”
Speaking in similar vein, Chairman, Shipping Association of Nigeria, (SAN) Mr. Val Usifo, described the development as a dire situation.
He said: “The withdrawal of shipping services by these firms does not affect Nigeria alone but the entire region.
“It is a serious situation; it is not only that the traffic is down, the freight rates have virtually collapsed. Importers are finding it difficult to pay for their imports because of the restriction in dollar.”