Data from Container Trades Statistics showed that container volumes from Asia to West Africa decreased in nine months in 2015, with the most recent year-on-year decline reaching 10 per cent.
The NYK makes two calls in Nigeria, Lagos-Apapa and Lagos-Tincan, but the country has suffered badly from crashing oil prices as it relies on oil revenue for over 90 per cent of its foreign exchange earnings.
With excess supply, Nigeria is having difficulty selling its oil. It has also been forced to sell much of its production on the spot at even lower rates.
Nigeria’s currency, the naira, has subsequently fallen to record lows against the US dollar. Construction contracts and international investment have stalled with consumer demand also considerably reduced.
Cargo volumes which fell by 30 per cent from 2014 have obliged APM Terminals to cut its workforce at its facilities in Apapa.
Dewry said, “The lacklustre demand in the trade has forced carriers to curb any growth to capacity with the monthly count of available southbound slots generally static in the last few months.
“Southbound utilization levels on vessels fell to 64 per cent in October, versus the low-70 per cent range of a year ago.”
It has also predicted that more carriers might quit the sector as container volumes continue to fall, resulting in reduced vessel load factors and declining freight rates.
Spot freight rates have subsequently plunged to around half of their average value of last year, and during November stood at around $1,800 per 40ft.
Drewry said the situation on the trade had gone from bad to worse, showing no signs of recovery.
The NYK has operated the Asia-West Africa service, which it dubbed WAX, together with Hapag-Lloyd and Gold Star Line since January, following a reshuffle of vessel-sharing agreements on the route.
The remaining partners are continuing to operate the link, deploying a dozen 2,500-3,500 teu ships, and are understood to have replaced the two vessels previously provided by the NYK with freshly chartered tonnage.
In what the World Bank has described as a challenging year for the African continent, prices of commodities such as iron ore, copper, rubber and cotton have also plunged. Encouraged by a seven per cent southbound growth in 2014, the NYK has no doubt become disillusioned with the prospects on the trade and decided to quit the route rather than wait for a recovery.
Like many carriers operating under extreme financial pressure, the NYK constantly reviews its service links and is no longer concerned about any bad public relations that may follow the short notice exit.
It follows compatriot MOL’s announcement in June that it was withdrawing from the Europe-West Africa trade after poor results.