Dar port the most expensive for EAC importers — report
Posted Saturday, August 30 2014 at 14:33
- But transporting goods from the port of Mombasa through Kenya is more expensive than freight through Tanzania, the report finds.
- Report urges East African governments to invest in infrastructure and provide incentives for the private sector to provide more efficient transport and logistics services.
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.