Anxiety grips importers months to Kenya’s election
Saturday March 19 2022
Importers are worried political tension in Kenya ahead of the August 9 elections may disrupt the supply chain and raise cost of transport with some ships reportedly avoiding Mombasa port for Dar es Salaam.
Now the Shippers Council of Eastern Africa (SCEA) wants authorities to step in before things get out of hand and assure importers of security.
“We have seen a decline of transit goods by eight percent in the first three months while there has been increase in cargo throughput at Dar port. Last year, Kenya increased transit cargo to Rwanda by 85 percent but this year we have seen a 35 per cent decline and if the situation is not controlled, we might record a slump due to rising political tension,” said SCEA chief executive Gilbert Lagat.
Mr Lagat said Kenya should be wary of losing the Uganda market which contributes more than 80 percent of Mombasa port’s transit cargo.
Importers said any political disruption either pre- and post-August 9 General Election will affect cargo destined to Uganda, South Sudan Rwanda, DRC and Burundi.
Importers say if they are not assured of security, they may start moving to Dar es Salaam port until after the elections.
East Africa is served by two major corridors with the main one being the 1,700 kilometre Northern Corridor that runs from Kenya, to Uganda, Rwanda, Burundi and Eastern Democratic Republic of Congo.
Due to rising political heat, importers might opt to use the 1,300 kilometre long Central Corridor serving Tanzania, Rwanda, Burundi, Uganda and Eastern DRC, with an exit and entry point at the port of Dar es salaam.
Most of the importers in the region prefer Mombasa due to its efficiency and reduced number of border points.
Currently, Mombasa handles 40 percent of DRC cargo and ferries eight million metric tonnes of Uganda cargo.
Dar es Salaam has been making heavy investment to attract more cargo to its facility with Tanzanian government trying to woo more traders to ditch Mombasa port in its favour.
African shippers are currently experiencing challenges in liner services, with historic port bottlenecks now compounded by a surge in freight rates, making shipping operations difficult for many.
Alphaliner released new data this month showing shipping lines deploying greater tonnage to the profitable East-West, transpacific, and transatlantic trade lanes, owing to Covid-19 era supply chain disruption with data indicating liner services capacity to and from Africa had declined by 6.5 percent compared to a year ago.
The data analytics firm cited the giant MSC, which had shifted some 13,000 twenty foot equivalent units of ship capacity from African trading routes in favour of the Pacific.
The report noted that the major reason behind the shift was due to the high revenue earned along the East-West trade routes.