NAIROBI, Kenya, Jul 31 – It costs twice as much to transport a 20-foot container weighing 28 tonnes from Mombasa to Nairobi (Sh109,200) than it does to transport it from Shanghai to Mombasa (Sh50,400), according to a new report by the Kenya Shippers Council (KSC).
The figures quoted above are one example of the exorbitant transport costs found in the 2011 Logistics Performance Index for East Africa that looks at three core areas of time, cost and complexity of moving goods across the region.
The Northern Corridor, a critical link to the Port of Mombasa to land locked Uganda, Rwanda and Burundi, accounts for annual cargo volumes in excess of 10 million tonnes transported on a combination of road, rail, lakes and oil pipelines.
Though efforts are being made to improve the infrastructure along the corridor, primarily through the Lamu Port-South Sudan-Ethiopia, Transport And Economic Development Corridor (LAPSSET) project, the free flow of goods has been inhibited by institutional obstacles such as lengthy border crossing times, weighbridges and police checks.
“From Mombasa to Kampala it is about 1,000 kilometres (km) and takes 10 days to transport a container for Sh285,600. From Mombasa to Kigali it takes 12 days, the cost goes up to Sh546,000. To Bujumbura it is 2,000 km and it takes 14 days at a cost of Sh672,000,” Rosemary Mburu a consultant with the Institute of Trade Development said.
According to the report, driver idle times contribute more significantly to border crossing times than clearing agents and customs documents processing times.
For example, the average driving time from Mombasa to Nairobi (484km) is seven hours, but the actual truck time is two days.
From Mombasa to Kampala (1,140km) the average driving time is 16 hours, while the actual truck time is 10 days.
With costs of transporting goods to Kenya’s regional neighbours still very high, Mburu said there is need to harmonise laws that will establish a regional revenue authority and standards bureau to ease the flow of commodities.
However, beyond streamlining legal frameworks, KSC Chief Executive Officer Gilbert Langat said efficiencies at the Mombasa Port need to be improved adding that the Council has been lobbying for 24 hour operations.
“It is easier for government institutions like KPA (Kenya Ports Authority) to operate 24 hours. However, two major players, the banks and the clearing and forwarding agents are required to get the 24 hour operations running,” he said.
The implementation of the 24/7 Port operation strategy was meant to deal with the constant delays at the Port, however with key stakeholders needed in port clearing activities not on board, efforts are frustrated.
According to a status report on the Mombasa Port, by the Kenya Private Sector Alliance and Trademark East Africa, the Kenya Revenue Authority (KRA) does not observe the 24/7 arrangement, with agents staying on duty until 8 pm, at which time most port operations stop.
The report added that in order for the Port to operate on 24 hours, soft infrastructure such as proper lighting between the Port and the Container Freight Stations will need to be installed as well as beefing up security during night hours.
The World Bank has said Kenya cannot wait three to four years for container capacity to come on-line without a serious impact on trade, adding that Port capacity could be increased in the immediate term by a system of incentives to encourage port stakeholders to move to full 24 hours operations.