Tanzania outsources cargo handling to improve efficiency at Dar port
The Tanzanian Ports Authority (TPA) has hired private companies for its cargo handling business to improve the flow of goods through Dar es Salaam.
TPA earlier this month announced an investment of $60 million from the private sector investors Hutchicon Ports Holdings, Wai Chau and TICTS, to run for five years, to facilitate its port operations in easing congestion.
TPA’s Planning Manager, Mr Modest Kakusa said that private sector involvement was among the steps taken by the authority in order to curb challenges facing ports countrywide.
According to Mr Kakusa, the progress is expected to open up competition in the sector which will attract more players hence enabling the harbour to increase its effectiveness.
Tanzania has been facing serious operational problems which have placed Mombasa at an advantage and turned it into a regional hub currently handling 76 per cent of total transit cargo to Uganda.
Mombasa has also been handling transshipment business to Indian Ocean islands when there is serious congestion in the Dar-es-Salaam port.
Berth occupancy for the containers at the Dar-es-Salaam port was above 60 per cent in 2007 and 2008, which experts say is a sign of congestion.
Although the dwell time according to the terminal design is 10 days, the actual number in 2008 was 25 days compared to Mombasa which recorded only seven due to the automation of the port operations and the 24-hour working programme.
Crane productivity in Dar-es-Salaam has been falling since 2006 an indication of long ship waiting time.
In 2002, the cranes made 22 moves per hour compared to 16 recorded in 2008.
However, with improved efficiency, the port has the capacity to take part of the transit business handled through Mombasa and end the transhipment option.
A delegation from TPA was in Kampala mid this year to announce plans to return to Uganda’s logistics industry, which was left to Kenya.
They spoke of a project to expand the physical, operational and managerial capabilities of TPA to a level where cargo can move from Dar-es-Salaam to Kampala in just four days.
TPA also appointed an agency based in Uganda to market their services, against those offered by KPA.
Through the agency, TPA’s offer is expected to reach markets in Rwanda, Burundi, DRC and Southern Sudan which transit goods through Uganda and Kenya.
The KPA has announced changes in cargo handling charges, which took effect on October 1 this year, that included scrapping payment for several services, which experts interpreted as reaction to Dar-es-Salaam onslaught.
License fees for private mooring, buoys and jetties were also reduced and the free storage period was adjusted for domestic and transit cargo.
“In keeping pace with developments and to address rising costs in maritime trade, Kenya Ports Authority wishes to announce minor tariff adjustments,” managing director of KPA Mr James Mulewa said.
In 2007 following the post-election violence, Uganda was greatly affected by disruptions and has been considering other routes to insure the country against Kenya’s political instability.
The government mid this year announced plans to rehabilitate two ferries; MV Pamba and MV Kaawa to facilitate movement of cargo on Lake Victoria between Mwanza in Tanzania and Port Bell in Uganda.
The biggest challenge facing the port of Mombasa is piracy off the Somali coast.
Ships calling at Mombasa port use the Somali lane more than those heading to Dar-es-Salaam, exposing them to attack by pirates.
Higher handling rates
Other challenges that those importing goods through Mombasa face are higher cargo handling rates compared to Dar-es-Salaam.
There are currently over 21 charges levied on importers at Mombasa, most of which are unique to the port.
For instance, one pays $70-80 per container as terminal handling charges, a fee Tanzania scrapped some years back.
This fee is charged by shipping lines, but with KPA also charging a similar fee, shippers end up paying double for cargo handling.
Uganda’s vigorous search for an alternative route was prompted by the growing Kenyan political instability.
Kenyan youths recently uprooted a section of the railway in Nairobi in protest over the territorial Migingo Island dispute in Lake Victoria.
There also fear of a repeat in disruption of transport, as happened after the disputed 2007 General election in Kenya.
Tanzania has a more stable political situation than Kenya.