Business
High fares: Transport companies turn to cargoes for survival
…as passenger traffic drops
Transport companies operating in the country are daily shifting emphasis from passenger movement to hauling goods as human traffic continues to drop at motor parks and terminals as a result of rising fares, Business Hallmark can report.
Visits to some parks and terminals of major transport companies like Libra Motors, Agofure Motors, Peace Motors Limited (PML), GOU Motors, Chisco Motors, and God Is Good (GIG) Motors in Iyana-Ipaja, Yaba, Jibowu, Ojuelegba and Oshodi in Lagos, show that apart from the motor companies first shuttles that leave their terminals between 6.30am to 7.00am, the operators now find it difficult to get passengers to fill up assigned cars and buses already prepared for 2nd and 3rd trips as Nigerians continue to cut down on long haul journeys.
As a result, transport companies are now reassigning their often empty passenger vehicles to moving goods, a business decision a terminal manager with one of the companies told our correspondent, to be highly profitable.
Until lately, the business of transporting travellers and goods across the country, especially to and from the eleven South South and South Eastern states of Edo, Delta, Rivers, Cross River, Akwa Ibom, Bayelsa, Abia, Anambra, Ebonyi, Imo and Enugu, have been very lucrative and profitable, with the owners and managers of these companies making huge profits from the venture.
Impact of Policy Change
However, with the removal of fuel subsidy by the current administration in May 2023, which pushed the pump price of a litre of petrol from around N200 to over N1,000, transport fares to the East and South South states astronomically shot up by as much as 300% in some instances.
For instance, a Lagos to Umuahia trip by road (one-way) which cost about N15,000 to N20,000 on average in 2022, now goes for between N35,500 and N50,000, depending on the company and vehicle deployed.
While smaller, faster and more comfortable vehicles like Toyota Sienna cars used on long journeys are much more expensive to travel in, the much common 13 seater Toyota Hiace buses, popularly referred to as Hummer buses in Nigeria, are relatively cheaper.
With the sharp rise in the cost of transportation (both inter-state and intra-state), it now takes an average of N100,000 to embark on a return trip to the two geo-political regions.
As a result, many citizens and natives of the South South and South East, who have a penchant for making frequent visits homes have drastically cut down on their trips.
Many natives of the two zones, as well as others from the Northern part of the country, who spoke to BH on the development, while disclosing that they still go home occasionally, admitted that the frequencies of the journeys have reduced drastically.
A provisions seller in Iju, Ishaga in Lagos, who identified himself as Chinedu, said he had only gone to his home state in Ebonyi twice since the price of transportation went up in May 2023.
A New Lifestyle
“Before now, I used to visit Ebonyi at least 4 to 5 times a year, especially during the Easter and New Year periods to celebrate with my family.
“This is not counting other trips to the East to attend weddings and burials of close relatives and friends, which I normally made with my family of five.
“The cost of traveling home with my wife and three grown children, that is transportation alone, is well over N500,000.
“So, I don’t bother myself again with the stress. What I do now is to send money home to my aged parents and little ones.
“I remembered a situation that played out during our last born’s wedding in 2024. If I were to go home with my family, I will spend over N500,000 on transportation alone.
“The amount is outside feeding, presents to community members, guest and relatives. When I looked at the huge cost implications of embarking on the journey, I decided to send my widow’s mite of N200,000 home.
“My family complained that as the first born of the family, I should be the one to give out my sister’s hand in marriage since our father is late, but I refused to bulge, saying that’s not the first, second or third fatherly role I will play.
“I told them to give the role to one of our uncles or brothers. At the end of the day, I didn’t go for the wedding and the heavens did not fall. By not going for the event, I was able to save over N500,000 I would have blown on frivolities like the buying of palm wine and drinks for visitors”, Chinedu stated.
Most Nigerians, findings revealed, now toe the same path as Chinedu in their desperate effort at cutting down on travel expenses.
Those expecting goods like food items from home, or who want to send things home now use the services of motor companies, which is cheaper than courier services.
As a result, the hitherto high passenger traffic at motor parks and terminals, especially in Lagos, have dropped dramatically, forcing motor companies to find ways around it.
Strategic Business Calculation
A ticket attendant at Peace Motors Limited (PML) Terminal at Jibowu in Lagos, who did not want her identity in print, told our correspondent that her company now makes more revenue transporting goods than passengers.
“As you know, PML has one of the cheapest rates in the country. For example, our Lagos to Enugu fare by bus is currently N28,500 and we can carry only thirteen passengers.
“If you do the mathematics, that comes down to N370,500 per trip. Fuel alone will take about 120 litres, which translates to about N120,000.
“A 2.8-litre petrol Hiace bus usually comes with an 80 litres fuel tank. Since 80 litres won’t take you from Lagos to Enugu because of the stoppages and bad portions on the road, you will need extra fuel of about 50 litres, making it 120 litres for the 600 kilometres journey.
“And we are just talking to fuel cost here. By the time you deduct the driver and loader’s wages, as well as other expenses like office running and tips for security men on the road, the company barely has anything left.
“But there is always a silver lining behind every dark cloud. The business of hauling goods and cargoes is gradually replacing that of passengers, which is now very slow.
“On a small parcel containing documents, we charge as much as N5,000, while bigger items like foods and electronics can fetch the company as much as N10,000 to N25,000.
“From just one load-bearing Hiace bus, the company can make up to N700,000 on a trip, which is about double of what it currently makes from one passengers trip”, the PML ticketing rep told our correspondent.
Passengers Groan
BH observed the same trend at PML at virtually all the motor companies visited. At the Agofure and Akwa Ibom Transport Companies terminals at Iyana-Ipaja, our correspondent witnessed passengers going to Warri in Delta State and Uyo in Akwa Ibom State respectively complaining bitterly against the way the companies sandwiched them together with goods.
Some of the aggrieved passengers, who could not bear the discomfort demanded a refund after disembarking from the vehicles.
The vehicles later departed for their scheduled destinations after several minutes of delay to the delight of the companies managements, who promptly replaced the disembarked passengers with more goods.
BH also observed that all the motor transport companies have formed the habit of transferring passengers from not fully loaded vehicles to others in order to make way for goods in the vehicles.
For instance, the driver of a Libra bus at the Iyana-Ipaja with only five passengers seated for a second trip to Enugu was directed by the terminal manager to depart for Ojota park around 8.45am, about 1hour 45minutes behind schedule, so that his passengers can be transferred to a waiting bus in Ojota with eight passengers already seated.
Our correspondent overheard the manager instructing the driver to quickly come back to Iyana Ipaja after dropping the passengers to load goods to be delivered at the company’s terminals in Benin, Asaba, Onitsha, Awka and Enugu.