Prosper

High transportation costs push regional traders to Dar es Salaam port

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By George Omondi

Posted  Tuesday, August 26  2014 at  01:00

In Summary

It costs Shs12 million to transport a standard 40-foot container cargo through the Northern Corridor to Kigali, Shs16.9 million to Bujumbura and Shs18 million to Goma from Mombasa Port.

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The high cost of moving cargo through Kenya is pushing most East African traders to Dar es Salaam despite reforms that have significantly raised efficiency at the port of Mombasa.
Traders based in Kigali, Bujumbura and Goma pay less to move goods from the port of Dar through Tanzania’s Central Corridor than from Mombasa Port through Kenya’s Northern Corridor, a new survey shows.

Costs
It costs Shs12 million ($4,800) to transport a standard 40 foot container cargo through the Northern Corridor to Kigali, Shs16.9 million ($6,500) to Bujumbura and Shs18 million ($7,000) to Goma from Mombasa Port .
The same container transported through Dar would cost Shs11 million ($4,300) to Kigali, Shs11.7 million ($4,500) to Bujumbura and Shs12 million ($4,700) to Goma, a survey conducted by the Shippers Council of Eastern Africa indicates.
The survey launched in Nairobi last week also shows that that rail transport costs per kilometre for a standard twenty foot container (TEU) is Shs3,200 ($1.24) if handled by Tanzania/Zambia Railways Authority network and Shs6,900 ($2.66) by the Kenya/Uganda network.
“It is, therefore, clear that Tanzanian shippers pay three times less freight charges for railway services than their Kenyan counterparts,” the survey says.
Traders in Kampala and Juba, however, find it cheaper to move goods from Mombasa through the Northern Corridor than Tanzania’s Central Corridor.
The high cost of shipping goods to Rwanda, Burundi and DRC is likely to thwart a campaign by the Kenya Port Authority’s (KPA) to grow its transit cargo business.

Efficiency
Under a strict directive from President Uhuru Kenyatta, the government agencies handling cargo at the port have significantly improved their efficiency raising the pace of goods movement within the national borders.
The changes saw the Mombasa Port dwell time (average number of days it takes cargo to leave the port terminal from the time it is offloaded from the vessel) improve from 5.8 days last year to 3.7 days by June.
Truck transit time also reduced to just three days from an average of seven days last year.
KPA officials have been betting on the improvements to stake claim on Burundi, Rwanda and DRC-bound cargo, which Kenya controlled up to 2003.

Cargo transportation

Transit time. Truck transit time also reduced to just three days from an average of seven days last year.
Cheap option. Traders in Kampala and Juba, however, find it cheaper to move goods from Mombasa through the Northern Corridor than Tanzania’s Central Corridor.