EAC shippers move to address sector challenges

Regional shippers have established an umbrella body to help address the challenges faced by importers and exporters on Northern and Central corridors. The Shippers Council of Eastern Africa (SCEA) was born out of the former Kenya Shippers Council. The new council aims to help harness and consolidate efforts geared at finding solutions to the numerous capacity challenges and inefficiencies in logistics, especially at the port of entry and exist along the Northern (Mombasa)and Central (Dar es Salaam) corridors. While launching the body in Nairobi, Kenya on Wednesday, the East African Community (EAC) Secretary General Dr. Richard Sezibera stressed the need to invest in the rehabilitation and expansion of railway systems in the region. He noted that this would provide a permanent solution to the high transport costs in EAC trade bloc. “Rail transport is cheaper, cost-effective, competitive and more efficient than road transport....shifting a significant amount of cargo to railways will guarantee longer life spans for our newly-constructed and rehabilitated roads. It will also improve the environment by reducing carbon emissions,” Dr. Sezibera said.“Currently, less than five per cent of the cargo in East Africa is moved by rail. No economy has grown without rail transport.” He projected that the region’s cargo would triple in the next 15 years and, “this will put a major strain on the roads...the problem will become more pronounced.”The issue of transport costs continues to hurt regional economies, especially landlocked countries like Rwanda, Uganda and Burundi, which depend on Mombasa and Dar es Salaam ports to import and export their products.On the issue of non-tariffs barriers, the EAC chief informed shippers that the region still had various bottlenecks that businesses face, like delays and corruption at the ports and borders.He said studies have revealed that trucks travelling from Mombasa to Kampala take close to six days, but over 30 minutes of this time is spent clearing documents at each border post and at weighbridge. Over 50 per cent of Rwanda’s imports come through Mombasa port, which also serves Uganda, Burundi, the eastern DRC, South Sudan and some parts of Tanzania.Recent statistics show that it is costly to transport goods within East Africa. It costs about $4,000 (about Rwf2.7m) to transport a 40-feet container from Hong Kong to Mombasa, while transporting the same container to Bujumbura from Mombasa costs about $10,000 (about Rwf6.7m).A conservative estimate is that a one-hour reduction in such crossing time at each point would bring $7m (about Rwf4.7b) per year in benefits to the EAC region.

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EAC shippers move to address sector challenges