East African traders have expressed fears of supply chain disruptions due to the forthcoming general elections.
The Shippers Council of Eastern Africa (SCEA) said in the past few months, there has been a decline on import inventory at the Port of Mombasa, noting that the situation might worsen if the government does not assure importers of their security.
“We have seen a decline of transit goods by 8 percent in the first three months this year, meaning some countries have stopped using Mombasa Port. There has been an increase in cargo throughput at Dar port,” said SCEA CEO Gilbert Lang’at.
“Last year, Kenya increased transit cargo to Rwanda by 85 percent but this year we have experienced a 35 per cent decline and if the situation is not controlled, we might record a slump due to increasing political tension.”
Mr Lang’at said Kenya should get concerned about losing a share of the Uganda market to Port of Dar es Salaam. Uganda contributes more than 80 percent of Mombasa port’s total transit cargo.
“The 35 percent loss of Rwanda cargo did make a big impact to the port but we should be worried about even losing 10 percent of Uganda cargo. This can only be averted if government and different agencies move out of the boardroom and visit regional countries to assure them of their security,” he said.
Importers said any political disruption will affect cargo destined for Uganda, Rwanda, DRC and Burundi which are landlocked countries and depend on Kenya for their imports.
Importers usually make prior decisions on where their cargo will move and they could shift to Dar es Salaam port until past next year's August election if they are not assured of security.
The East Africa region is served by two major corridors with the main one being the 1,700km northern corridor that runs through Kenya, Uganda Rwanda, Burundi and Eastern D.R. Congo, with an exit and entry point at the Port of Mombasa.
Due to increasing political heat, importers might opt to use the 1,300 kilometre long Central Corridor that serves Tanzania, Rwanda, Burundi, Uganda and Eastern D.R. Congo, with an exit and entry point at the port of Dar-es-Salaam.
The two corridors facilitate export and import activities within the EAC region on a combination of rail, road and lake transportation networks.
Most of the regions’ importers prefer Mombasa port due to its efficiency and reduced number of border points.
“We have learnt before that is why we are worried with the current political situation. Despite being affected by Covid-19 which has reduced our buying capacity, we are reluctant in making more orders through the port of Mombasa,” said Hussein Hajji, one of the South Sudan clearing agents in Mombasa.
As a result of reduced orders, the cost of importation and supply chain might be affected considering most shippers would opt to ply areas with business.
Currently, the Port of Mombasa only handles DRC Congo Eastern 40 per cent of DRC Congo cargo but it benefits with the 8 million metric tonnes of Uganda cargo.
Port of Dar es Salaam has been making heavy investments to attract more cargo to its facility with the Tanzanian government trying to woo more traders to ditch Mombasa Port in its favour.
African shippers are currently experiencing a tragedy in liner services, with historic port bottlenecks now compounded by a surge in freight rates, making shipping operations difficult for many.
Alphaliner released new data this month showing shipping lines deploying greater tonnage to the profitable East-West, transpacific, and transatlantic trade lanes, owing to Covid-19 era supply chain disruption with data indicating liner services capacity to and from Africa had declined by 6.5 percent compared to a year ago.
The data analytics firm gave the example of MSC, which had shifted some 13,000 twenty-foot equivalent units (TEUs) of ship capacity from African trading routes in favor of the Pacific.
The report noted that the major reason behind the shift was due to the high revenue earned along the East-West trade routes.