Dar port the most expensive for EAC importers — report

The port of Dar es Salaam is the most expensive for importers in the region, besides being the slowest in clearing goods, a new report by the Shippers Council of Eastern Africa (SCEA) shows.

But transporting goods from the port of Mombasa through Kenya is more expensive than freight through Tanzania, the report finds.

Dar es Salaam charges wharfage as a percentage of the value of the cargo, 16 per cent for domestic imports, 12.5 per cent for transit imports and 1 per cent for domestic and transit exports.

In contrast, Dar es Salaam’s main business rival, Mombasa, charges wharfage at a flat rate of $70 for a 20-foot container and $105 for a 40-foot container.
Wharfage is the fees charged by a port for goods staying in its yards before they are cleared.

“This is a disadvantage for shippers who import through the Dar es Salaam port, as high value will attract higher port charges,” said Gilbert Langat, the Kenya Shippers Council chief executive officer.

However, it costs $4,800 to transport a standard 40-foot container cargo from, Mombasa port through the Northern Corridor to Kigali, $6,500 to Bujumbura and $7,000 to Goma in the Democratic Republic of Congo. From Dar es Salaam, the costs are $4,300 to Kigali, $4,500 to Bujumbura and $4,700 to Goma.

READ: High costs in Kenya push traders to Dar port
Traders in Kampala and Juba, however, find it cheaper to move goods from Mombasa through the Northern Corridor, because the distance is much shorter than through Tanzania.

The 2014 Logistics Performance Survey launched in Nairobi a week ago also shows that rail costs per kilometre a standard 20-foot container are $1.24 if handled by Tanzania/Zambia Railways Authority network and $2.66 by the Kenya/Uganda network.

“It is, therefore, clear that Tanzanian shippers pay three times less freight charges railway services than their Kenyan counterparts,” the survey says.

The report shows that average cargo dwell time at the Dar es Salaam port is 10 days, compared with three days in Mombasa, down from five days last year.

The international benchmark for dwell time is less than three days.

Industry players attribute the improvements at the Mombasa port to recent efforts made by Kenya, Rwanda and Uganda — the Coalition of the Willing — to remove logistical bottlenecks.

“We expect this to improve even more to meet the international standards,” said Meshack Kipturgo, managing director of Siginon Group, a Kenyan logistics company.

Electronic Single Window

Kenya recently launched the National Electronic Single Window that allows traders to lodge cargo documents for processing and approval as well as payments electronically.

The new Berth 19 was opened recently, increasing the port’s annual container handling capacity to 250,000 teu. A second container terminal with a capacity of 1.2 million teu is expected to be completed in early 2016.

READ: Major projects on course as countries fight for sea transport business
“The Kenya Ports Authority has also in the past two years completed the dredging of the channels at the port to enable larger vessels to dock at the port and increase its capacity,” said Mr Kipturgo.

The Tanzania Ports Authority has also embarked on projects to improve efficiency. The projects are expected to run until 2028.

The report shows that weighbridges, police checkpoints and heavy traffic in major cities like Nairobi, Eldoret and Kampala were the main causes of delays on the two transport corridors in East Africa.

“Trucks are still spending lengthy time at the weighbridges despite recent investments in new technology in the case of the Northern Corridor. At the border points like Malaba, it takes about three hours to cross despite the operationalisation of the EAC one-stop border posts,” says the report.

The report urges East African governments to invest in infrastructure and provide incentives for the private sector to provide more efficient transport and logistics services.