Mombasa port delays are four times global average

Time is of essence for business and nations as well as individual enterprises keen on sharpening their competitive edge are increasingly focusing on slashing the turnaround time of transactions.

Shipping connectivity and logistics has, as a result, become a key focal point as customers become more sensitive to deadlines—forcing countries to improve efficiency at sea ports to slash the turnaround time for vessels and increase the volume of cargo.

While many countries, especially in Europe, Americas and Asia have made major strides to boost port connectivity, others in regions such as East Africa have remained laggards. Figure out this. In 2018, tankers and other liquid bulk vessels spent a median of 0.94 days in port, ranging between 0.11 days (about 2.5 hours) in Peru and more than four days in Kenya, according to a survey by the United Nations Trade and Development Agency (UNCTAD).

This means that the delay due to inefficiency at Kenya’s port of Mombasa is more than four times worse than the global average.

And as expected, the connectivity of the Mombasa port as well as that of Dar es Salaam in Tanzania has been affected, with shipping liners opting to call on more efficient ones.

“Mombasa, and Dar es Salaam, the United Republic of Tanzania have witnessed relatively stagnant connectivity” UNCTAD said.

“The liner shipping connectivity index of Mombasa, Kenya and Dar es Salaam, United Republic of Tanzania have been relatively stagnant, except for a temporary peak in Mombasa in 2018” it added in an assessment whose findings were published on Thursday.

UNCTAD’s chief of trade logistics, Jan Hoffmann explains that a country’s position in the global container shipping network — its connectivity — is an important determinant of its trade costs and competitiveness.

A liner shipping connectivity index (LSCI) for 2019 by UNCTAD for instance ranked Kenya at 16.98 points — breaking a streak of back-to-back improvements since 2013.

The trend has been no different for the port of Dar es Salaam over the years despite having posted an improvement in the 2019 LSCI to realise 15.94 points — its highest ever.

The UN agency blames clogging for the poor competitiveness of Mombasa and Dar es Salaam ports.

“Both ports are important gateways to overseas trade in Eastern Africa, including the landlocked countries of Burundi, Rwanda and Uganda. Yet they are highly congested, limiting their potential for improved connectivity” UNCTAD says.

Presently, in Eastern Africa, the most connected port is Port Louis, Mauritius, providing trans-shipment services to other Eastern and Southern African ports. The most connected ports in Africa are in Egypt, Morocco and South Africa, on the edges of the continent, connecting North–South and East–West shipping routes.

In the Red Sea, the leading ports are Jeddah and King Abdullah, Saudi Arabia and Djibouti. All three ports mostly provide trans-shipment services, competing with ports in Asia and Eastern Africa for this business. The other ports of the region in Eritrea, the Sudan and Yemen cater mostly for national trade; they have recorded lessening connectivity in the past few years caused by lower trade volumes stemming from economic and political developments in the region.

UNCTAD said the ports of Mombasa and Dar es Salaam however have room for improved connectivity if their respective managers implemented expansion and modernisation.

“Policy measures that could help improve port connectivity in Eastern Africa include expanding and further modernising existing ports, investing in new ports, encouraging inter-port competition among neighbouring countries, improving intermodal connections and trade, and facilitating transit” the UN agency advised.

Spooked by the inefficiency at the port of Mombasa, the government plans to effect a raft of measures including a Sh20 billion modernisation of four berths as the gateway to handle both container cargo and goods not packed in containers.

The investment is driven by growing demand for imported cargo in the region, where most economies are growing by at least five percent per year, Kenya Ports Authority (KPA) managing director, Daniel Manduku told Reuters.

“We are currently undertaking major expansion programmes... We are trying to be ahead of the game” he said.

KPA is spending an additional Sh39 billion to build a new oil terminal, to replace its existing facility that dates back to 1968. China Communication Construction Co. is the contractor for the project, which will triple the port’s annual capacity for oil and liquid gas to 1 million tonnes.

The current investments by KPA are part of a Sh310 billion ports investment programme, aimed at boosting annual capacity to 110 million tonnes by 2040, Dr Manduku told Reuters.

This includes Sh55 billion for building three berths at a new port in Lamu on Kenya’s northernmost coastline, close to the Somalia border.

Construction is expected to be completed in the next year and 10 foreign firms, including from Singapore and China, have expressed interest in running the new port by leasing it from the government, the KPA boss further said.

Traders complained that the slow clearance at the port of Mombasa had led to the reduction in the number of containers ferried through the Standard Gauge Railway from the port of Mombasa to the Inland Container Depot (ICD) in Nairobi.

An estimated 1,000 containers arrive at the Mombasa port daily, according to industry data.

Long distance transporters also complained of having to wait for lengthy hours or even days before they could be handed cargo for delivery.

Further, the transporters grumbled about increasing cost of doing business due to delay by the Kenya Revenue Authority (KRA) to provide cargo tracking seals, which are mandatory as part of strategy to help curb dumping and theft of goods.

The taxman has made it mandatory for all transporters to acquire special regional seal from it in addition to the Electronic Cargo Tracking System ECTS tags provided by authorised private firms.

The Electronic Cargo Tracking System (ECTS) comprises satellites, a monitoring centre and special electronic seals fitted on cargo containers and trucks, which give the precise location of goods in real time.

The system triggers an alarm whenever there is diversion from the designated route, an unusually long stopover or when someone attempts to open a container.

Cargo verification has also been a challenge at the port of Mombasa due to multiple layers of State agencies involved in the process.