By Oamien Ailemen
Protests, particularly those of significant scale like the recent events in Nigeria, can have a profound impact on various sectors, with the maritime industry being no exception. The interconnectedness of global supply chain and the strategic importance of maritime operations make the sector particularly vulnerable to disruptions caused by civil unrest.
Understanding these impacts is crucial for maritime stakeholders to navigate the challenges effectively. Here are some effects of protests on the Nigerian blue economy:
Disruption of Port Operations
Ports are critical nodes in the global supply chain, facilitating the flow of goods in and out of countries. During protests, access to these ports can be severely restricted, either due to road blockages or direct actions aimed at the ports themselves. Such disruptions can lead to significant delays in cargo handling, adversely affecting shipping schedules and overall port efficiency. In Nigeria, where ports like Lagos and Port Harcourt are vital for international trade, any disruption can have cascading effects on trade volumes and economic activity.
For instance, despite no restrictions on movement and the relatively peaceful nature of the ongoing protests in Lagos, port operations at the Lagos Ports of Apapa and Tin Can have slowed down significantly. The majority of port users and government agencies have stayed away from work, leading to a sluggish pace of operations. The Customs commands at Apapa Port, Tin Can Island Port, and PTML Kiri-kiri Lighter Terminal, though open, have seen minimal activity as freight agents have stayed away. This has resulted in ports operating below capacity, with critical operations being delayed or deferred.
Delays in Supply Chain Logistics
The maritime industry is deeply integrated with terrestrial logistics networks. Protests can disrupt these networks, particularly road and rail links that transport goods to and from ports. Delays in the movement of cargo can result in congestion at ports, increased demurrage costs for shippers, and potential breaches of contract due to delayed deliveries. This can have a knock-on effect on the entire supply chain, from manufacturers to end consumers.
During the ongoing protests, while ports remained open for business, operations were skeletal as many Licensed Customs Agents did not turn up to take delivery of their consignments. The partial dosure of banks and limited payment of import duties further compounded the delays in clearing and moving goods out of the ports.
Heightened Security Risks
Protests often escalate into situations that pose significant security risks. For the maritime sector, this can mean increased threats to the safety of port facilities, vessels, and crew members.
In response, maritime operators may need to implement heightened security measures, such as rerouting vessels, delaying port calls, or increasing on-board security personnel. These measures, while necessary, can lead to increased operational costs and further delays.
Safety Concerns for Crew and Assets
The safety of crew members is a top priority for any maritime operation. During periods of civil unrest, ensuring this safety becomes more challenging. Maritime companies may need to adjust their operations, such as delaying port entries or diverting ships to less affected areas, to protect their crew. These adjustments can disrupt shipping schedules and reduce the efficiency of maritime operations.
Insurance and Liability Considerations
The risks assodated with protests can lead to increased insurance premiums for maritime operators.
The potential for damage to property, both at sea and in port, as well as the liability for delayed or damaged cargo, can drive up insurance costs. Furthermore, insurers may impose stricter conditions or even exclude coverage for areas deemed high risk due to ongoing unrest.
Economic Impact on Maritime Trade
Prolonged protests can have a broader economic impact, particularly in a country where maritime trade is a significant component of the economy. Disruptions can lead to reduced trade volumes, impacting the revenue of shipping companies and port operators. For a country like Nigeria, which relies heavily on its ports for international trade, the economic implications can be substantial, potentially leading to a decrease in investor confidence and a slowdown in economic growth..
The impact of the hunger protests on Lagos ports highlights the economic toll such disruptions can take. With port activities operating below full capacity and government agencies like the Nigerian Shippers’ Council and the Nigeria Ports Authority (NPA) offering only skeletal services, the economic consequences are significant. The Nigerian Shippers’ Council even instructed staff to stay away from work due to fears of attacks from protesters, further illustrating the wide-reaching effects of the unrest.
Conclusion
The maritime industry is a critical part of the global economy, and its vulnerability to disruptions caused by civil unrest, such as the recent protests in Nigeria, underscores the need for comprehensive risk management strategies. Stakeholders in the maritime sector must be proactive in anticipating and mitigating these risks to ensure the continuity of operations and the safety of all involved.
By understanding the potential impacts and preparing accordingly, the industry can better navigate the challenges posed by such events.
