Bad roads, inefficient ports blamed for high transport costs

Shipping & Logistics

Bad roads, inefficient ports blamed for high transport costs


Motorists struggle to navigate part of the derelict Mlolongo-Katani road near Mlolongo in this photo taken on May 29, 2021. PHOTO | JEFF ANGOTE | NMG

summary

  • According to logistics experts, the cost of transporting goods in Africa is 3.5 times higher compared to high-volume global trade routes because the ports have little economies of scale.
  • During the 26th Africa Intermodal Exhibition and Conference in Mombasa, participants said capacity constraints at ports have restricted the accommodation of large ships, in line with international shipping trends.
  • In East Africa, the East African Community and partner countries have undertaken several joint projects to address poor infrastructure conditions in a number of areas.

According to logistics experts, the cost of transporting goods in Africa is 3.5 times higher compared to high-volume global trade routes because the ports have little economies of scale.

Increasing operating costs due to underdeveloped rail and road networks and regulatory bottlenecks have also been cited as major causes of slow traffic through African ports.

During the 26th Africa Intermodal Exhibition and Conference in Mombasa, participants said capacity constraints at ports have restricted the accommodation of large ships, in line with international shipping trends.

Kenya Ship Agents Association chairman Silvester Kututa, who is also the founder of Express Shipping and Logistics EA, said inefficiency, which has led to rising demurrage costs, has been a major obstacle for shipping companies using Mombasa as their preferred port made.

“Demurrage contributes to increasing business costs and most traders would only import by setting up with seamless movement of physical cargo and paper trails, so we pushed ahead with cargo pre-clearance at Mombasa Port, which is working now,” said Mr. Kututa.

Ukur Yatani, cabinet secretary of Kenya, said Africa faces a number of hurdles hampering the efficiency of its ports, infrastructure and trade in general, ranging from capacity constraints, underdeveloped skills, security, gender inequality and financial inadequacies.

Mr Yatani said Port of Mombasa stakeholders are bound by a port community charter, which has a service level agreement that sets out performance targets to be met by each agency.

The implementation of the charter is closely monitored by the government to ensure that each authority plays its role in enhancing the performance of the port and the transport corridor.

CS said logistics costs in Africa are being pushed up by infrastructure states.

“We cannot deny the fact that the cost of doing business in Africa is directly determined by the state of infrastructure. Undoubtedly, the interconnectivity of transport systems on the continent is still poor and the situation cannot be improved unless governments integrate their investment plans,” Mr Yatani said.

“For this reason, as a result of this realization, countries are grouping into regional economic blocs in order to jointly plan and implement infrastructure developments.”

Kenya Ports Authority (KPA) acting chief executive John Mwangemi said to reverse the trend, East African countries are investing in infrastructure to increase cargo throughput and efficiency.

“Kenya has invested heavily in infrastructure over the past decade to address these bottlenecks.”

He noted that the government has invested in road and rail networks to serve the port in addition to developed inland container terminals or dry ports and container freight stations to relieve the ports.

Mr Yatani said Africa has developed a plan to improve the state of infrastructure

“During the 22nd African Union (AU) Summit, held in Addis Ababa on 31 January 2014, African leaders adopted the Africa Integrated Maritime Strategy 2050 (AIMS) and the Action Plan to Address Africa’s Maritime Challenges for a sustainable development and competitiveness. We all commend the AU’s efforts to develop holistic strategies to address the challenges of intermodal transport in Africa,” said Mr Yatani.

According to CS, the Kenya National Single Window System has now created an online platform for sharing information and automating documentation processes for all stakeholders to increase business efficiency.

In East Africa, the East African Community and partner countries have undertaken several joint projects to address poor infrastructure in a number of areas, notably roads, air transport, seaports, railways and communications.

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