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. click here