PUBLISHED ON October 22nd, 2014

Little space sends up freight charges

THE cost of freight via the sea rose by 45 per cent last year due to few vessels plying on the East African coast routes, a logistics industry report shows.

The East African logistics performance survey 2014 findings indicate the average cost for exporting and importing a standard 20 feet container from North America, South America, Asia, Europe and Middle East through the Mombasa and Dar es Salaam ports increased by 45 per cent in the year 2013.

It says maritime freight rates for exports to North America now average $2,800 for a twenty foot container unit (TEU), making it the most expensive export destination.

“It takes a long time from the moment a vessel order is placed to the time it is delivered for service,” states the report.

It adds that customs brokerage fees for inbound and outbound cargo entering the two EA ports also increased.

According to the report, South America is the most expensive import destination with an average freight rates of $2,200 for a TEU.

“Maritime freight rates to Europe stand at $2,000 for a twenty foot container unit…Those to the Middle East average $1,500 for a TEU. Rates to Asia average $600, making it the destination with the lowest freight rates,” states the report published by the Shippers Council of East Africa.

The report says air transport costs have remained steady since 2013 though adding that there is no transparency in the air freight charges.

“While air freight charges have remained steady over the past year, a number of surcharges have been introduced by carriers resulting in a negative impact to the cost of doing business for shippers in the East African region.”

It shows the road freight charges for imports destined for various EAC regions vary depending on the port of choice, cargo and destination.

For instance a 40 feet container coming through Mombasa port to Kampala is charged $3,700 but shippers will pay $4,600 they opt for Dar es Salaam port.

However, Dar es Salaam port charges $4,300 to move similar cargo to Kigali, which is much lower that the $4,800 charged by Mombasa port.

The report says rail transport for a TEU average 2.4 US cents per kilometer/tonne adding that rail tariffs in the EAC are the highest compared to other regions of the world.

Source:: The Star

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