INCREASE

Covid pushes Northern Corridor freight cost up 48%

The corridor runs from the Kenyan coast into the EAC landlocked states.

In Summary

•Freight charges from Mombasa to Kampala increased from $2,200 (Sh238,150) to $2,500 (Sh 270,625 ) per container.

•This is pegged mainly on the delays along the corridor and especially at the ports of loading and the exit borders.

Long distance trucks line up along the Amagoro-Malaba Highway as they wait to cross the border to Uganda
'HARD TIMES': Long distance trucks line up along the Amagoro-Malaba Highway as they wait to cross the border to Uganda
Image: EMOJONG OSERE

Transport cost along the Northern Corridor has jumped 48 per cent in the wake of the Covid-19 pandemic, mainly on measures to contain the virus by regional states.

A report by the Shippers Council of Eastern Africa (SCEA) indicates road freight rates increased in the key trading route which runs from the Port of Mombasa, across the country, into Uganda, Rwanda, DR Congo, Burindi and South Sudan.

Freight charges from Mombasa to Kampala increased from $2,200 (Sh238,150) in the pre-pandemic period to $2,500 (Sh 270,625 ) per container (both 20 and 40 foot), which extended into the first half of this year.

The cost of moving containerised goods to Kigali from Mombasa also increased from $3,400 (Sh 368,050) to $3800 (Sh 411,350), pegged mainly on the delays along the corridor and especially at the ports of loading and the exit borders.

Uganda is the biggest destination for transit cargo along the corridor, accounting for about 83.2 per cent of total transit volumes.

That of transporting a container from Mombasa to South Sudan increased to $4,500 (Sh487,125 ) from $3,600 (Sh 389,700) while moving a container to DRC went up to $6,000( Sh649,500 ) between March and June this year, from $5,000 (Sh 541,250).

In terms of border crossing times, it was observed that the time increased from less than 24 hours in the first quarter of 2020 (pre-pandemic), to over five and six days at the Busia and Malaba borders.
Shippers Council of Eastern Africa

Freight charges between Nairobi and Zambia increased to $7,000 (Sh757,750) from $6,000 (Sh 649,500 ), with transit time increasing to an average 30 days from 10-12 days.

The number of containers cleared within the four-day free period declined drastically at the Inland Container Depot, Nairobi (ICDN).

Subsequently, about 60 per cent of cargo cleared through the ICDN

incurred storage charges amounting to an average of Sh9million to Sh11million in storage charges weekly, SCEA data shows.

The survey dubbed “Impact of Covid-19 on Transport and Logistics Sector in East Africa” however points out to a decrease in the road transport rate from Dar es Salaam Port to Rwanda (Kigali), from $3000 (Sh324,750 )in January last year to $2700 (Sh 292,275), in September.

“This is largely attributed to the directive by Rwandan government to have the Inland Container Depot moved from the capital centre to the Rusumo border,” the survey reads in part.

The Dar es Salaam Port to (DRC) Goma route however experienced an increase–from $4,150 (Sh 449,237) in May 2020 to $4400 (Sh 476,300 ) in September 2020.

The number of twenty-foot equivalent units (TEUs) paying penalty for delay after customs release increased to an all-time high of over 300 TEUs in April and May 2020 at the Inland Container Depot, Nairobi (ICDN).

“In terms of border crossing times, it was observed that the time increased from less than 24 hours in the first quarter of 2020 (pre-pandemic), to over five and six days at the Busia and Malaba borders, respectively,” SCEA chief executive Gilbert Langat said.

At the onset of the pandemic, Rwanda was the fastest to respond among the East African Community peers, followed almost immediately by Kenya and later by Uganda.

The three countries responded by restricting cross-border movement, limiting flight travel, advocating for social distancing, encouraging washing and sanitization of hands, imposing localised lockdowns, banning local gatherings, and closing of schools.

The EAC transport and logistics sector despite being an integral part of the business value chain in the region was not spared the wrath of the pandemic, as measures by the various countries to contain the virus led to severe supply chain disruptions never witnessed before.

This in turn affected trade facilitation and overall trade performance of business in the region, SCEA notes.

In the second quarter of 2020 when the number of Covid-19 cases among cargo transporters and logisticians increased within the EAC region, partner states introduced a myriad of additional measures.

They ranged from mandatory testing of truck crew, adoption of online submission of cargo documents, use of rail transport as an alternative, adoption of non-intrusive cargo verification to relay driving, isolation of customs agents and customs officers at border points, among others.

The measures were later supplemented with introduction of the Regional Electronic Cargo Driver Tracking System (RECTDS), which helped to eliminate multiple testing of truck drivers as they moved cargo within the EAC.

These measures were deployed alongside initiatives by the private sector such as regional logistics sector Standard Operating Procedures (SOPs) developed by the Federation of East African Freight Forwarders Associations (FEAFFA) in partnership with Trademark East Africa.

According to the survey, the measures instituted to manage the pandemic in the region have impacted the efficiency of systems and institutions that provide services to the transport and logistics sector.

Limitations in access to and use of technology, by public and private stakeholders in the transportation and logistics sector, however, disrupted operations of most border posts when states directed that organisations implement work from home measures.

“The result was increased delays at the ports, inland container depots (ICD), and One-Stop Border Posts (OSBPs). Furthermore, it also impacted the evacuation of containers and empties, which coupled with higher truck turnaround time, consequently raised the base cost for transporters and shippers,” the report notes.