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Mombasa port loses business as exporters opt for Dar es Salaam

Discussion in 'Politics Palace' started by Geza Ulole, Jan 22, 2012.

  1. Geza Ulole

    Geza Ulole JF-Expert Member

    Jan 22, 2012
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    Mombasa port loses business as exporters opt for Dar es Salaam

    Kenya Port Authority (KPA) is losing business to rival Dar es Salaam port as delay in cargo clearance in Mombasa prompts traders from neighbouring countries to turn to Tanzania.

    Data from KPA shows that the Mombasa port handled 18.9 per cent less or 552,449 tonnes of cargo from Tanzania, Burundi, Rwanda and the DRC in the nine months to September.

    As a result, the port relied on Uganda and South Sudan-that have little choice on their logistic corridor-to grow its export cargo volumes to 3.9 million tonnes in the nine months compared to 3.8 million tonnes in the same period last year.

    Shippers attribute the trend to the shorter period it takes to transport cargo from the port of Dar es Salaam compared to Mombasa which is facing congestion that has seen transporters take more than a month to reach Rwanda from three weeks.

    "We are losing business to Tanzania because of inefficiency at the port," said Gerald Kagumo, the vice chairman of East Africa Freight Forwarders Association.

    With the reform going on there (Tanzania), Kenya is going to lose even more business, said Mr Kagumo. Tanzania Port Authority has announced a $1.4 billion (Sh120 billion) upgrade with its eye on South Sudan, Uganda, Rwanda and Burundi-which are also key target markets for the Kenya port, also on the expansion trail.

    Eastern Africa is witnessing increased trade with the establishment of the common market-which allows for free movement of goods, capital and people in a market of 130 million people.

    This has seen logistics firms such as port operators angle themselves for new business, prompting Kenya and Tanzania to announce plans to establish new ports in Lamu and Tanga respectively.

    But the loss of business to Tanzania is set to hit the earnings of KPA, logistic firms like transporters and clearing and forwarding agents.

    Kenya is hinging its port business on South Sudan and Uganda, at least in the short term, since its takes longer to haul goods from Tanzania to the twin markets.

    For instance, the road between Mombasa and Kampala measures 1,170 kilometres compared the route through central Tanzania, estimated at 1,500 kilometres.

    Cargo to and from South Sudan rose 48.3 per cent to 249,571 tonnes in the nine months to September from 168,287 tonnes in the same period last year.

    This saw its share of cargo business at KPA increase by two percentage points to 6.4 per cent-making it the fastest growing market. As investors take interest in South Sudan and the world's newest nation race for alternative logistic corridor to avoid hostility from Khartoum, it's expected that its share will move to the double digit zone.

    Alternative route

    Uganda share of export cargo at KPA stood at three million tonnes or 78.8 per cent of the export volumes-making it a key market for the Mombasa port.

    But Kampala has stepped up the search for alternative routes through Tanzania following the near cut-off of the country from its trade partners by the mayhem that followed Kenya's disputed 2007 presidential election.

    President Yoweri Museveni has stepped up negotiations with Tanzania for an alternative railway passage connecting the port of Tanga to Uganda despite the higher transport costs.

    Cargo destined to Rwanda dropped 27.5 per cent to 162,995 tonnes in the period under review while DRC's fell 17.1 per cent to 262,846 tonnes in the same period. Those to Burundi fell 74.6 per cent to 1,375 tonnes.
  2. T

    Topical JF-Expert Member

    Jan 23, 2012
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    Good news for Tanzanians
  3. Pdraze

    Pdraze JF-Expert Member

    Jan 23, 2012
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    TZ need to keep utilizing these opportunities cause it have more advantages compared to kenya, little is done but still we need to put more efforts as we are sorrounded with many land locked countries..
  4. Smatta

    Smatta JF-Expert Member

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    Good for you.
  5. Zing

    Zing JF-Expert Member

    Jan 23, 2012
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    This is my view

    Kenya Port authority isnt actully losing . Dar es salaam is the one reclaiming its cargo handling share back. Its shame when u see some of Rwanda and Burundi cargo pass trough kenya although those countries do not share border with kenya

    At least Tanzania should compete with Kenya for handling Uganda goods . kenya port should never be an option for Burundi Rwanda and DRC if we( tanzania port and railway authority) were performing effectively and efficiently

    Ndio maana Waziri wa miundmbiu anatakiwa atumie muda na effort kubwa i kuhakiisha Reli yetu inaborehswa badala ya upoteza na ATCL . let ATCL au ibinafshwe 100% then GOT wafufuenreli na serikali iwe shareholder mkubwa hata 70%
  6. n

    newazz JF-Expert Member

    Jan 23, 2012
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    Dar es Salaam on some instances is reclaiming back business due to somehow liberazation in the port. This happened, when governement came to its senses and allowed competition, by having Tanzania Ports Authority to handle containers as well. Vessels handled at port of Dar has increased with around 5/6 berths dedicated to container handling.

    Another detriment at port of Mombasa , is waiting time for a vessel to be allocated a berth, waiting time at Mombasa is quite high and some vessel opting to call Dar es Salaam first and latter go to Mombasa, this shows confidence on part of shipping lines on performance of port of Dar es salaam.

    However, this good windfall to our port, may only be temporary due to fact that other infrastructure facilities do not match with increased business. Clearance of cargo at Dar port, documentation wise is still chaotic, with a lot of down time at TRA/ Long room.

    There is also serious bottleneck to clear the cargo out of port gates, port seems congested with no space to store cargo. Though, private ICDs are allowed to handle containers, but costs of moving containers to ICD is an extra costs, which has become a headache to importers.

    Congestion problems is forcing shipping lines to consider introducing vessel delay surcharges, a move bitterly contested by importers and SUMATRA. But one way or another, shipping lines will collect this charges through any means without importers or SUMATRA being aware, for instance collecting it at port of loading,where SUMATRA have no jurisdiction.

    Do not see a scenario, exporters from Tanzania to prefer using Mombasa port, due to logistical , documentation consideration. Local exporters, which are mainly agri commodities, are seriously hampered to use a third port services because of commercial reasons. On importers, this is possible, especially for Tanzania business in regions of Mwanza, Kagera, Shinyanga, at current transportation network is more easier and cheaper to move cargo from Mombasa port than Dar es salaam.

    All above said, Dar port should not rest on its laurels thinking, Mombasa will sit back and continue to let Dar take business from them, surely an improvement at Mombasa will change course of business, let us be aware.
  7. Tutafika

    Tutafika JF-Expert Member

    Aug 29, 2014
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    Your knowledge is more than one year old. Things have changed a lot! Documentation at Dar port is perfect as everything done on-line. Seems you haven't done any activity at the Port of Dar es salaam recently. My friend, even Zimbabweans are flooding the port with cargoes. Have a visit or just search for complaints regarding Dar port, you come to know clients are satisfied
  8. Dhuks

    Dhuks JF-Expert Member

    Aug 29, 2014
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    Ok i get it, perfect infrastructure but when vessels need to be transported to Mwanza they use Mombasa port and Kenyan roads, when transporting huge dump trucks from mining fields in Tanzania Mombasa is the port of call :cool2:
  9. K

    Kimweri JF-Expert Member

    Aug 30, 2014
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    Those Huge Dump truck exceed the toll weight hence destroying the infrastructure they pass on. When Money is the only thing on the table its very lucrative to look away.
    tragedy of the commons
  10. 124 Ali

    124 Ali JF-Expert Member

    Aug 31, 2014
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    Telepathy? were you reading my mind? exactly my views n this one ,it is tanzania side which is inefficient,that failed t secure its markets,what is happen is the business man are udecided whic service t use ,they just change their service providers whenever seem fit as we share inefficieny with uor rivals.
  11. nngu007

    nngu007 JF-Expert Member

    Aug 31, 2014
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    Cars and containers at the Dar es Salaam port. A new report says that the port charges the highest wharfage in East Africa. PHOTO | FILE

    By CHRISTABEL LIGAMI Special Correspondent

    Posted Saturday, August 30 2014 at 14:33


    • But transporting goods from the port of Mombasa through Kenya is more expensive than freight through Tanzania, the report finds.
    • Report urges East African governments to invest in infrastructure and provide incentives for the private sector to provide more efficient transport and logistics services.

    The port of Dar es Salaam is the most expensive for importers in the region, besides being the slowest in clearing goods, a new report by the Shippers Council of Eastern Africa (SCEA) shows.

    But transporting goods from the port of Mombasa through Kenya is more expensive than freight through Tanzania, the report finds.

    Dar es Salaam charges wharfage as a percentage of the value of the cargo, 16 per cent for domestic imports, 12.5 per cent for transit imports and 1 per cent for domestic and transit exports.

    In contrast, Dar es Salaam's main business rival, Mombasa, charges wharfage at a flat rate of $70 for a 20-foot container and $105 for a 40-foot container.
    Wharfage is the fees charged by a port for goods staying in its yards before they are cleared.

    "This is a disadvantage for shippers who import through the Dar es Salaam port, as high value will attract higher port charges," said Gilbert Langat, the Kenya Shippers Council chief executive officer.

    However, it costs $4,800 to transport a standard 40-foot container cargo from, Mombasa port through the Northern Corridor to Kigali, $6,500 to Bujumbura and $7,000 to Goma in the Democratic Republic of Congo. From Dar es Salaam, the costs are $4,300 to Kigali, $4,500 to Bujumbura and $4,700 to Goma.

    Traders in Kampala and Juba, however, find it cheaper to move goods from Mombasa through the Northern Corridor, because the distance is much shorter than through Tanzania.

    The 2014 Logistics Performance Survey launched in Nairobi a week ago also shows that rail costs per kilometre a standard 20-foot container are $1.24 if handled by Tanzania/Zambia Railways Authority network and $2.66 by the Kenya/Uganda network.

    "It is, therefore, clear that Tanzanian shippers pay three times less freight charges railway services than their Kenyan counterparts," the survey says.

    The report shows that average cargo dwell time at the Dar es Salaam port is 10 days, compared with three days in Mombasa, down from five days last year.

    The international benchmark for dwell time is less than three days.

    Industry players attribute the improvements at the Mombasa port to recent efforts made by Kenya, Rwanda and Uganda - the Coalition of the Willing - to remove logistical bottlenecks.

    "We expect this to improve even more to meet the international standards," said Meshack Kipturgo, managing director of Siginon Group, a Kenyan logistics company.

    Electronic Single Window

    Kenya recently launched the National Electronic Single Window that allows traders to lodge cargo documents for processing and approval as well as payments electronically.

    The new Berth 19 was opened recently, increasing the port's annual container handling capacity to 250,000 teu. A second container terminal with a capacity of 1.2 million teu is expected to be completed in early 2016.

    "The Kenya Ports Authority has also in the past two years completed the dredging of the channels at the port to enable larger vessels to dock at the port and increase its capacity," said Mr Kipturgo.

    The Tanzania Ports Authority has also embarked on projects to improve efficiency. The projects are expected to run until 2028.

    The report shows that weighbridges, police checkpoints and heavy traffic in major cities like Nairobi, Eldoret and Kampala were the main causes of delays on the two transport corridors in East Africa.

    "Trucks are still spending lengthy time at the weighbridges despite recent investments in new technology in the case of the Northern Corridor. At the border points like Malaba, it takes about three hours to cross despite the operationalisation of the EAC one-stop border posts," says the report.

    The report urges East African governments to invest in infrastructure and provide incentives for the private sector to provide more efficient transport and logistics services.

  12. nngu007

    nngu007 JF-Expert Member

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    Funny Article... UGANDAN's left a Chunk of GOODS @ the MOMBASA Sea PORT Due to expenses...

    BUT Kenyans to hide their DIRTY they have WORLD RE-KNOWN NEWS ANCHORS not ours the CCM BLOGGERS no Journalistic knowledge or Education...
  13. ndetichia

    ndetichia JF-Expert Member

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    i dont think this will help to change the real situation of cost..
  14. nngu007

    nngu007 JF-Expert Member

    Aug 31, 2014
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    In reality DAR port is not as costly than MOMBASA... Politics is the real situation...

    c.c ndetichia
  15. J

    JokaKuu Platinum Member

    Aug 31, 2014
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    ..but I thought Tanzania has a higher axle-load limit compared to Kenya.

    cc Dhuks
    Last edited by a moderator: Jan 4, 2016
  16. Dhuks

    Dhuks JF-Expert Member

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    Corruption is there in Kenya but for something so visible, no Kenyan would dare touch it. Remember this involves various government department and a parastatal across counties.
  17. K

    Kimweri JF-Expert Member

    Sep 6, 2014
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    U seem to neither live in Tanzania nor understand that the boats were heavier than our road toll limit, What did you want the authorizing departments to do?magically make the boats lighter?

    the limits are put to protect roads life cycle and avoid damages, they are everywhere.i remember a few years ago, some fool in Dublin constructed a multi million pounds tunnel to ease transport chaos near the port caused by lorries as they had to puss through the busy part of town. Guess what, the fool didn't take consideration neither the toll limit nor the height Limit, hence the tunnel upon opening became useless, Since it was unfit for the intended trucks to pass through the tunnel due to weight and height limits.

    So limits are there, not as mere numbers, but things that are very meaningful.

    AS with your lame propaganda, it takes 3 days to transport things to Rwanda through Tanzania as opposed to 5 in Kenya, so it's not as if TZ is any hell-ier than Kenya, it's actually better. Your Friends knows i Hate misinformation, so before you start them, please cross check the facts.
  18. Dhuks

    Dhuks JF-Expert Member

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    So magically the boats became heavier for Tanzania load limits while being in conformity with Kenyan load limits which are lower? Perfect deduction skills.
  19. K

    Kimweri JF-Expert Member

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    Which is why it simply implies corruption took its course hard-shell.

    Those boats were a highly publicized issue in TZ,they were certainly above weight limit,so unless you bring credible proof that shows the boats went on a diet.don't feel shy to assume money exchanged hands.