Transporters using the Northern Corridor have been bearing some of the highest costs in the world, reflecting how shortage of arteries is impeding the competitiveness of the East African region to trade.
According to a survey carried out by the Shippers Council of East Africa (SCEA) , transport costs in the region are estimated at $1.8 per km per container against international best practices of $1 per km per container.
“The most expensive route to transport cargo was Kampala-Mombasa at $2.5 per tonne followed by Mombasa-Kampala at $2.17, Dar es Salaam-Kampala $1.17 and Bujumbura-Dar es Salaam at $1.02 per tonne,” the SCEA Logistics Performance Survey 2021 report says.
“The top three least expensive international routes were Dar es Salaam-Bujumbura at $0.02 per tonne, followed by Dar es Salaam-Kigali at $ 0.17 and Nairobi-Dodoma at $0.1 per tonne.”
The Northern Corridor road network covers 12,707km (1,323.6km in Kenya; 2,072km in Uganda; 1,039.4 km in Rwanda; 567km in Burundi; 4,162 km in DRC and 3,543km in South Sudan).
The port of Mombasa is the key entry and exit point for cargo belonging to a vast hinterland that includes Burundi, DR Congo, Kenya, Rwanda, South Sudan and Uganda. The port also serves Tanzania, Somalia and Ethiopia.
High logistics costs
The report summarises average transport cost per metric tonne, assuming a payload of 24 metric tonnes per 40-foot container.
Speaking at a webinar by the East African Business Council and TradeMark East Africa, National Logistics Platform in Uganda chair Merian Sebunya appealed to governments to bring down the cost of transport and logistics in the region to ensure EAC exports can compete at international level.
“Transport and logistics costs compose of 35 to 42 percent of production. This is high compared to eight percent in Asian countries. This has negatively impacted the competitiveness of the EAC bloc and trade balance,” said Dr Sebunya.
The main drivers of freight cost were fuel prices, non-tariff barriers, long timeliness of clearance at the port and slow turnaround time.
The report shows that Kenya and Uganda had the highest number of police stops for trucks, with between 6-9 while Tanzania had 3-5 stops.
Rwanda had the least police stops at between 0-2.
Uganda had six to nine weighbridge stops, Kenya had three to five while Rwanda and Tanzania had the least weighbridge stops at none to two.
“Nearly 66 percent of East African cargo uses the Northern Corridor. The improvement of infrastructure, automation and interconnectivity is set to reduce transport costs along this corridor,” said Emmanuel Imaniranzi from the Northern Corridor Transit and Transport Agreement.
Imaniranzi noted that cargo throughput at the Port of Mombasa had increased since last year and while transit time in the Northern Corridor was recovering following easing of Covid-19 restrictions and use of digital certificates, transportation costs were still high.
The Central Corridor meanwhile had reduced the number of weighbridges from nine to three and road tolls to improve performance.