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Tanzania eats into Kenya's port cargo in renewed rivalry

Mombasa has lost about 10% of transit business in the last two years.

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by The Star

Kenya02 May 2023 - 15:01
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In Summary


•EAC is served by two major corridors with the main one being the 1,700 kilometre long Northern Corridor that runs between Kenya, Uganda Rwanda, Burundi and DRC.

•The 1,300 kilometre long Central Corridor serves Tanzania, Rwanda, Burundi, Uganda and Eastern D.R. Congo, with an exit and entry point at the port of Dar-es-Salaam.

An aerial view of the berth number 22 at the Port of Mombasa.

Kenya has embarked on an aggressively courting the business community in the region into using the Port of Mombasa and Inland Container Depots.

This is in the wake of increased competition from neighbouring Tanzania, whose Dar es Salaam Port has taken over a sizeable amount of transit cargo volumes destined for the hinterland.

Mombasa has lost about 10 per cent of transit business to Dar es Salaam, industry data by the Shippers Council of Eastern Africa (SCEA) shows, even as Kenya remains the main trade route in the region.

Two major corridors with the main one being the 1,700 kilometre long Northern Corridor that runs between Mombasa (Kenya), Uganda Rwanda, Burundi and Eastern DRC serve the East African Community (EAC) market.

The 1,300 kilometre long Central Corridor serves Tanzania, Rwanda, Burundi, Uganda and Eastern D.R. Congo, with an exit and entry point at the port of Dar-es-Salaam.

The two corridors facilitate export and import activities within the EAC region with a combination of rail, road and lake transportation networks.

“Mombasa used to command up to 70 per cent of business but this has gone down to about 61 or 60 per cent. It has lost to Dar es Salaam in the last two years but we are working towards regaining that,” SCEA chief executive and the Mombasa Port and Northern Corridor Community Charter chair, Gilbert Lang’at, said yesterday.

The current biggest headache for Mombasa is the free storage time given by Dar es Salaam, which allows traders up to 30 days of free storage.

Mombasa has been forced to adjust to 15 days from nine days to attract business.

Those using the Naivasha Inland Container Depot have up to 30 free storage days.

Meanwhile, Kenya is working on addressing delays, multiple road user charges, cross border charges and other Non Tariff Barriers (NTBs) to make the Northern Corridor more attractive.

“KPA will address non-tariff barriers like weighbridges along the northern corridor free storage period and port charges to improve customer experience and efficiency of Port of Mombasa,” management said.

Kenya is keen to recover transit business with Uganda the biggest market, accounting for 83.2 per cent of transit cargo.

South Sudan takes up 9.9 per cent while DR Congo, Tanzania and Rwanda account for 7.2 per cent, 3.2 per cent and 2.4 per cent respectively.

According to KPA managing director, Captain William Ruto, delays at Malaba border post will be addressed through automation.

KPA, which has liaison offices in the region, has in the last two months pitched tent in Uganda and Burundi to pitch for business.

There have been concerns over failure by some state agencies on key performance indicators, mainly under the Mombasa Port Charter.

While some signatories, mainly state agencies, have lived up to the set targets, a number of entities both public and private sector have slowed down on key implementations which have affected efficiency, the Mombasa Port and Northern Corridor Charter steering committee says.

The charter was signed in July 2014, during former President Uhuru Kenyatta’s tenure, where a total of 13 public entities committed to improve movement of cargo from the port into the hinterland.

When the Port Charter was first developed, the port throughput was less than 30milion metric tonnes. This has increased to over 37 million tonnes.

The number of waiters (ships waiting to dock) has reduced to none from a high of more than seven, while port dwell time- the amount of time that vessels spend in port actively loading or unloading cargo, has gone down to less than four days from over 14 days.

Issues of verification have been addressed with less than 10 per cent of containers verified at the Inland Container Depots.

Cargo being cleared under the free period has also increased to 80 per cent.

A meeting co-chaired by Cabinet Secretaries Kipchumba Murkomen (Transport) and Moses Kuria (Investment and Trade) last month resolved that all government agencies involved in port operations, as well as exporters, work towards achieving a 24 hour port operations system.

The government is also considering options for increasing scanners and equipment including outsourcing, “to enable its agencies to focus on world class service delivery.”

Kenya Revenue Authority has been tasked with inclusion of other agencies in the Authorised Economic Operators and Pre-arrival processing of cargo framework, to enable faster clearance at the ports.

 

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