Economy

Imports cost jumps 66pc on shipping container shortage

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A ship docks at the Port of Mombasa. FILE PHOTO | NMG

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Summary

  • The cost of shipping a 40 foot container from China has gone up to Sh550,000 from Sh330,000 in December, according to a traders lobby.
  • Covid-19 pandemic, which is still rampant in Europe and America, has contributed to the shortage as shipping containers are not returning to China due to drastic reduction of China's imports.
  • A global surge in demand for certain goods during the pandemic has upended normal trade flows, stranding empty cargo containers and leading to bottlenecks, according to Reuters.

A shortage of empty shipping containers in China, Kenya’s major source market for goods, has pushed up the cost of imports by 66 percent, hitting businesses and threatening to dent customers' pockets.

The cost of shipping a 40 foot container from China has gone up to Sh550,000 from Sh330,000 in December, according to a traders lobby.

Covid-19 pandemic, which is still rampant in Europe and America, has contributed to the shortage as shipping containers are not returning to China due to drastic reduction of China's imports.

A global surge in demand for certain goods during the pandemic has upended normal trade flows, stranding empty cargo containers and leading to bottlenecks, according to Reuters.

Traders have attributed the sharp increase to a global shortage that has seen countries across the world grapple to get empty containers for use.

Mr James Kariuki said local importers have had to wait longer or pay a premium to get the containers, a cost that has to be passed over to consumers.

“The cost of shipping has skyrocketed in the last couple of months,” said Mr James Kariuki, chairman Kenya-China Trade Association.

A significant percentage of goods on the shelves of retail stores in Kenya are shipped in from China and other Far East countries.

These goods include electronics such as mobile phones and television sets and their accessories, utensils, furniture, electrical appliances, clothes and prefabricated buildings not to mention capital-intensive ones such as heavy machinery. Kenya is hugely reliant on China for basic household supplies.

Last year, the value of Kenya’s imports from China stood at Sh361 billion a drop from Sh376 billion a year earlier.

The increase in cost, coupled with a weaker shilling has come as a boost to local manufacturers as some of the household goods that are imported from China can now be sourced locally to cut on the higher price of shipping similar goods from abroad.