Job losses hit maritime industry as economic downturn bites harder

Companies, especially terminal operators in the nation’s port industry, are beginning to resort to lay-off of staff and sending more Nigerians to the job market to cut down on operating cost as the economic downturn bites harder on their profit margin.

The situation has become so alarming as the Port and Terminal Multi Services Limited (PTML) and Five Star Logistics, the two major operators of roll in, roll out terminals in the Tin-Can Island ports, took the initial step of reducing staff strength while APM Terminals Apapa, Nigeria’s busiest container terminal, recently announced its plans to cut down staff strength over sharp drop in import traffic.

BusinessDay search reveals that the drop in import volume has resulted in many terminals operating below capacities as some record between 20 and 50 percent unutilised capacities in their terminals. By so doing, they resort to laying off of staff as a means of cutting down cost.

Also, PTML, which is owned by Grimaldi Agency Nigeria Limited, says the RoRo business is down by 50 percent and the company has to retrench almost half of its staff to cut down cost.

Statistics from the Nigerian Ports Authority (NPA) shipping position reveal that Apapa Port Complex that used to handle about 100 vessels on monthly basis now manages to handle an average of 30 vessels on a monthly basis.

Tony Anakebe, a maritime analyst, who predicted more job losses in the shipping industry if business activities remained the same in the first and second quarters of 2016, says the situation has become worrisome, as there is no sign of early recovery in the coming year.

According to him, designated oil terminals that specialises in handling oil and gas cargoes may likely cut staff strength in the beginning of 2016, as they are now recording low volume since the fallen oil prices that resulted in multinational oil majors cutting down the volume of investments in Nigeria.

“It is when investment is attractive that investors are encouraged to invest, and this is taking its toll on the staffing requirement of oil terminals.

“Grimaldi is a terminal that used to have two ships everyday, but now it gets one ship in four days because the bulk of the business has gone to Cotonu since the implementation of the national automotive policy, and this has forced the terminal operator to cut staff strength by 50 percent,” says Val Usifoh, chairman, Shipping Association of Nigeria (SAN), in an interview with BusinessDay.

Usifoh, who is very close to Grimaldi operations, blames inconsistent government policy as one of the major reasons business activities at the port are generally low, as investors find it difficult to plan if government does not give a long-term prospect for business to develop.

“Government policies should be predictable so that when one is making medium- or long-term investment, the person is sure of it.

“International trade is on the decline. Business is down for everybody and if it is down for the importer, it is down for the shipping company and the terminal operator. It is a global trend but Nigeria is feeling it more because we are an import dependant nation,” he says.

Bunmi Pratt, head, human resources, APM Terminals, said in Lagos last week that, “With cargo volumes down 30 percent compared with a year ago, and even after extensive cost-cutting measures taken throughout the terminal, we are unfortunately being forced to reduce our staffing in view of the business realities of the current economic environment.”

According to her, the effects of global price of oil falling from $114 per barrel in 2014 to less than $50 a barrel in October 2015, have rippled throughout the Nigerian economy, and are impacting staffing requirements at APM Terminals Apapa.