Fewer ships plying East African waters raises freight rates 45pc

THE average cost for exporting and importing a container by sea between East Africa and North America, South America, Asia, Europe and Middle East through Mombasa and Dar es Salaam increased 45 per cent last year.

The dramatic increase in freight charges has been attributed to fewer vessels plying East African coastal routes.

According to the East African logistics performance survey 2014 published by the Shippers Council of East Africa, maritime freight rates for exports to North America now average US$2,800 per TEU, making it the most expensive export destination for East Africa, reported the Nairobi Star.

"It takes a long time from the moment a vessel order is placed to the time it is delivered for service," the report said, adding that customs brokerage fees for inbound and outbound cargo entering the two East African ports have also increased.

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

Maritime freight rates to Europe stand at $2,000 per TEU. Those to the Middle East average $1,500 per TEU. 

"Rates to Asia average $600, making it the destination with the lowest freight rates," said the report.

The report said air transport costs have remained steady since 2013.

"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."

The report shows that road freight charges for imports destined for various East Africa coastal regions vary depending on the port of choice, cargo and destination.

For instance an FEU coming through Mombasa port to Kampala in Uganda is charged $3,700, but shippers will pay $4,600 if they opt for Dar es Salaam.

However, Dar es Salaam port charges $4,300 to move similar cargo to Kigali in Rwanda, 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 kilometre/tonne, adding that rail tariffs in the EAC are the highest compared to other regions of the world.