The cost of transporting cargo has dropped to levels last seen in 2009 as transporters continue to grapple with low volumes of freight at the port of Mombasa.
The decline in cargo has been attributed to the high cost of shipping, occasioned by a shortage of containers globally, which has seen traders cut down on imports.
Kenya Transporters Association (KTA) said the situation, which was first reported in June this year, has not improved as the cargo volumes remain low at the port.
KTA chief executive officer Dennis Ombok said freight charges have dropped to below $2,000 from Mombasa to Kampala as truckers scramble for limited cargo at the port.
“There are some of our members who are charging below $2,000 but they are not saying it publicly for fear of being victimised as the standard rate at the moment is about $2,300,” said Mr Ombok.
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 as the world grapples with a biting shortage of containers.
Vanessa Evans, the managing director of Rongai Transport says the low cargo load has significantly hit their businesses as most of the trucks have 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 said the situation has been worsened by the high cost of fuel in Kenya, which makes it hard for them to break even.
The cargo business had started picking in the period between October-December 2020, where the port realised improved performance.
According to KPA, the total throughput within this period not only recovered but also surpassed the forecasted target by 2.8 percent and 1.2 percent against 2019/20 performance.
Data from KPA indicated container traffic dipped by four percent to 1,359,579 twenty-foot equivalent units (TEUs) in 2020, from 1,416,654 TEUs recorded in 2019.
KPA said the marginal decline was attributed to global lockdowns that disrupted business after countries around the globe imposed lockdowns due to the Covid-19 pandemic.
“The impact of the Covid-19 pandemic on the economy is reflected in the 2020 port performance which was also 2.8 percent less than the forecasted target," KPA said.
The KPA data showed the Port handled a total of 34.44 million tonnes of cargo in 2020 compared to the 34.06 million tonnes handled the year before.
Kenya’s authorities say the Moyale One-Stop Border Post (OSBP) remains operational despite the ongoing political upheavals in Ethiopia that have seen the country announce a state of emergency. A customs official in Kenya’s northern region said the border point with Ethiopia has not been officially closed and that business is going on as usual.
A backlog of ships waiting to offload goods at the key ports around the world is threatening to disrupt the supply chain in East Africa ahead of the Christmas festivities. East Africa relies on imports from China as its largest source market for the bloc’s imports, followed by India and the United Arab Emirates.
African ports are facing a challenge in handling a new generation of ultra-large container vessels due to lack of sufficient infrastructure and shallow berths that hinder bigger ships from calling to these harbours.