Freight costs go up as container shortage persists
Tuesday August 31 2021
A cargo ship docked at the port of Mombasa, in Kenya. Sea freight charges have doubled in the past month due to a global shortage of containers. PHOTO | FILE | NMG
Sea freight charges have doubled in the past one month due to a global shortage of containers as players in the logistic sector urge ports management in East Africa to increase empty container limitations at their facilities to allow more containers to be shipped back.
Shipping agents and Container Freight Stations (CFSs) officials said the cost of importing a 20ft container from China to East African ports has risen from $1,500 to $2,500 while that of 40ft container doubled from $2,000 to $4,000.
Kenya Ships Agents Association chief executive Juma Tellah accused Kenya Ports Authority and Tanzania Ports Authority of allocating limited space for empty containers at the ports meaning very few empties were being shipped back.
Tellah said most ports prioritise exports leaving empties piled up at different container depots.
“We are having empties piled up in our CFSs since very few containers are being returned as a result of imbalance of trade and limited space allocated for empties at the ports. There is a limited space at Mombasa and Dar es Salaam ports, which has hampered return of empties,” said Tellah.
Knock-on effects
He said most agents are giving prioritising exports over empties since it made more money sense over carting away empties thereby occasioning a serious container shortage in Asia.
Kenya International Freight and Warehousing Association Chair Roy Mwanthi said most CFSs are filled with empty containers as fewer ships are calling at Mombasa port due to fewer imports.
“These past few months, few ships have docked in Mombasa causing an empty container pile-up. Please allocate more space for empties to facilitate their return,” said Mr Mwanthi.
According to a United Nations Conference on Trade and Development (UNCTAD) policy brief, carriers, ports and shippers were all taken aback after empty boxes were left in places they were not needed, plus repositioning had not been planned for during the Covid-19 pandemic peak.
The UNCTAD reported that maritime trade flows increased after governments eased lockdowns and approved national stimulus packages for businesses thereby causing a container shortage.
Most shippers find it uneconomical to ferry empty containers back to Asia from Africa and South America due to the distance involved.