Correlation between the Firm's Location, Seaport Proximity, and the Cost of Port-Hinterland Transportation in Lagos and Ogun State, Nigeria

Abstract

The literature on the influence of location on Nigerian container transportation efficiency is unclear, necessitating a thorough comprehension of port-hinterland relationships and transportation costs. The study investigates the correlation between a firm's location and port-to-site container transportation costs in Lagos and Ogun States, Nigeria, to enhance efficiency in the manufacturing supply chain. A survey was conducted on 23 publicly quoted manufacturing firms in Lagos and Ogun States, listed on the Nigerian Stock Exchange for over ten years. These firms are located in the major industrial estates in Lagos and Ogun States, which are Ilupeju, Agbara, Ewekoro, Ikeja, Ikorodu, Isolo, and Sagamu. The majority of firms, 88.9%, primarily use trucks for transporting containers from the port to their factory sites. The Pearson Correlation analysis reveals a significant correlation (r = 0.55) between location and container transport costs, indicating a direct increase in costs for companies in the seaport hinterland. Business locations in the hinterland of a port should be strategically chosen in Lagos and Ogun States, where 88.9% of manufacturers use trucks and 11.1% use barges for container transport. Lagos and Ogun States manufacturing supply chains must reduce port-hinterland transport costs and locate factories near intermodal connections to boost profits amid container transport expansion.