Carrier vessels shortage hits car importers

Kenyan car importers are facing delays due to the unavailability of vessel spaces in Japan coming on the back of recovery of global trade that was affected by the Covid-19.

Imports now take more than the maximum 40 days that it used to take for one to import a secondhand vehicle from an Asian country.

The recovery of the global supply chain has created a huge demand for shipping vessels, meaning shippers cannot meet the high demand for exports.

“At present, it is extremely difficult to secure space for vessels; one of the main reasons is the resumption of the economy due to the coronavirus,” Japanese biggest vehicle importer to Kenya SBT Company Limited said.

The scarcity of vessels could cause the prices of vehicles as well as freight to go up as demand outweighs supply.

Only in April, freight charges went up by 20 percent on a 40-foot container from about Sh430,800 in March to Sh646,000 amid a shortage of containers in China, forcing traders to scramble for available ones.

China is a key source market for Kenyan imports, including electronic and electrical products, clothing and textiles, and fish.

Similarly, in April, the price of second-hand cars increased by up to 29 percent or Sh500,000 due to a rise in the cost of buying and shipping automobiles from Japan.

Car importers say purchase prices in Japan, the major source of most used vehicles, increased by between $1,000 (Sh108,200) and $1,500 (Sh162,200).

The dealers attribute this to tougher economic conditions that have caused people to keep their cars for longer than usual, restricting supply to markets such as Kenya.

“This may continue for a while but we are doing our very best to ship your cars the soonest possible time. We will keep you posted on the status of your units,” the company added.