Home Shippinh East Africa ports push again to attract shipping lines

East Africa ports push again to attract shipping lines

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Regional ports are banking on the development of infrastructure and the ease of cargo evacuation and delivery to remain competitive.
The ports of Djibouti, Mombasa and Dar-es-Salaam will rely heavily on how fast goods are cleared and delivered and at low rates to have an edge in attracting shipping lines, said Express Shipping & Logistics chief executive Silvester Kututa.
With Dar-es-salaam and Mombasa ports charging almost the same rates, shippers say competition has shifted to how fluid the ports are and the speed at which goods are delivered to end users.
A review of port tariffs shows that Mombasa charges $7.5 for dry cargo per tonne while Dar es Salaam charges $5.5. For transshipment cargo, both ports charge $6 per tonne. Mombasa charges $6.6 for dangerous cargo while and Dar charges $7.
Storage charges
A port’s charges may be lower, but cargo staying at the yards for long ends up attracting storage charges, making importers opt to ship their cargo through a particular port despite high tariffs.
“Ideally, what matters is how fast goods are offloaded and delivered to the importer at low rates. The handling charges at a port and its tariff could be low but if goods stay there for long they attract charges, the shipper is unlikely to choose it as destination for their goods,” Mr Kututa said.
Kenya has completed the first phase of the standard gauge railway between Mombasa and Nairobi with the second phase from Nairobi to Naivasha underway.
Freight trains
On January 1, Kenya Railways started commercial operations of freight trains which are delivering goods to the Nairobi Inland Container Depot (ICD) within eight hours. The capacity at the ICD has been expanded from 180,000 teus to 450,000 teus per year at a cost of Ksh21 billion ($21 million).
Although there have been challenges in finding cargo for the trains, the KR management says it is working with KPA and the Kenya Revenue Authority (KRA) on how to change the documentation of upcountry bound cargo to the ICD.
Meanwhile, Ethiopia has constructed a railway for speed trains from Addis Ababa to Djibouti. The 756km Ethiopia-Djibouti rail transport started operations last week. The last 100 kilometres are in Djibouti.
Ethiopia and Djibouti invested $3.4 billion in the new electric railway. The finance came mainly from the Exim Bank of China. The construction was done by two Chinese companies — China Civil Engineering Construction Corporation and China Railway Construction Corporation.
KPA says the single window system introduced last year has helped reduce the turnaround time for ships.
“We allocate a maximum of three days for a ship to berth, offload and load cargo. The Shipping line is guaranteed that the vessel will get space when it arrives but at the end of the third day it has to leave,” said KPA principal communications officer Hajj Masemo.
There used to be delays as vessels waited for export containers to be delivered at the port.
Competition
KPA plans to construct an ICD in Taita Taveta at the border with Tanzania, a move that is billed as taking competition to the door step of the neighbouring country.
Kenya Ship Agents Association (KSAA) chief executive Juma Tellah said the ICD will handle cargo destined for Burundi and Rwanda since the distance between Mombasa and Bujumbura or Kigali using the route is shorter than the Northern Corridor — which links the landlocked countries of the Great Lakes Region to the Mombasa port.
“The time taken will also be shorter because where one crosses two borders before you get to Burundi and Rwanda, the Taveta route will involve only one border with Tanzania to reach both countries.
“Already, we are witnessing a trend where with the completion of Voi-Taveta road some cargo destined to those countries is passing through this route,” he said.
The development comes as the new Doraleh Multi-purpose Port of Djibouti, which began operation in June last year, announced up to 45 per cent discount for Ethiopian freight forwarders.
It is one of the five ports the government of Djibouti has constructed to meet the growing trade in Ethiopia that relies on the smallest nation in East Africa for most of its import and export goods.
Since it began full operation last July with a total investment of $580 million, it has served 220 vessels with 1.7 million tonnes of goods. Compared to the old Port of Djibouti, DMP handles bigger ships which carry up to 100 tonnes of goods, while reducing the waiting days of the ships to discharge goods from 19 to seven days.

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