Market News

Transport charges fall 20 percent on low activity at port

COAST-SHIPPING

Singapore flagged vessel Mv NYK Clara docks at the Port of Mombasa. FILE PHOTO | NMG

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Summary

  • Cargo transport charges have dropped by up to 20 percent on the low activity at the Mombasa Port due to a snub by importers put off by high international freight cost, transporters said.
  • The Kenya Transporters Association (KTA) said cargo trucking charges from Mombasa to Kampala have, for instance, dropped to an average of Sh222,020 ($2,000)from Sh277,525($2,500) on low demand-- leaving many trucks idle.

Cargo transport charges have dropped by up to 20 percent on the low activity at the Mombasa Port due to a snub by importers put off by high international freight cost, transporters said.

The Kenya Transporters Association (KTA) said cargo trucking charges from Mombasa to Kampala have, for instance, dropped to an average of Sh222,020 ($2,000)from Sh277,525($2,500) on low demand-- leaving many trucks idle.

“For the last couple of months we have been experiencing a decline in cargo at the port of Mombasa. This has seen our charges decline to a low of $2,000 (Sh222,020) at the moment,” the lobby’s chief executive officer, Dennis Ombok said adding that the situation had triggered price wars among truckers.

Freight rates, especially from China to East Africa have gone up from the initial $4,000 per 40ft container to over $6,000 at the moment.

Ms Vanessa Evans, the managing director of Rongai Transport said the low cargo load had significantly hit their businesses as most of their trucks had been parked.

“We are no longer making profits at the moment. The shortage of cargo at Mombasa port means that some of our trucks have to stay idle,” she said.

Ms Evans added the situation was worsened by the high cost of fuel in Kenya, which has made it hard for transporters to break even.

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