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Freight Market Update: July 19, 2021

Sendy
July 22, 2021

Read all about it! Sendy is rounding up the latest news from different publications on what’s happening in the logistics industry regionally for you. Enjoy bite-sized easy-to-read information that will keep you up to date on all things Freight!

Freight Rates:

High Costs of production and input costs dampen recovery of jobs in the manufacturing sector.

Kenyan manufacturing firms have been forced to lay off more workers this year than they did last year (even as business conditions continue to improve).

This is mainly due to the higher costs of manufacturing and production.

Firms polled by advisory firm KPMG and the Kenya Association of Manufacturers (KAM) primarily point to higher freight charges, cost of raw materials, and the weaker shilling as the reasons for the higher costs.

The steeper cut on the employee numbers has also been attributed to the uncertainty that is still clouding the business environment, largely due to fears of the possibility of a fourth wave of Covid-19 that would bring on a new round of restrictions.

At a time when firms are having to deal with lower cash flows and subdued demand, the manufacturing sector has continued to see an increase in sea freight costs due to a shortage of containers in the global market, due to increased imports by US shippers from East Asia since the second half of 2020.

Source: Business Daily Africa July 14, 2021

Unfair Business Practices Leave Clearing Agents Frustrated.

As Kenya shifts into the maritime single window system, Clearing and forwarding companies are accusing shipping lines of unfair business practices leading to increased cost of doing business.

Through the Kenya International Freight and Warehousing Association (KIFWA), clearing agents have cited huge delays in the generation of local shipping charges and payment confirmations, due to the exercise being done outside the country.

The delays in processing delivery orders and refunding container deposits have caused financial instability for the clearing and forwarding agents.

Source: The Star July 16, 2021

Freight Traffic:

Sendy Formalizing Africa’s fragmented Logistics Industry.

In an interview with ‘How We Made It in Africa’ Meshack Alloys CEO & founder of Sendy notes that transporting cargo within Africa comes with its considerable challenges such as inefficient logistics, long distances, potholed roads, and cumbersome border-crossing procedures all add to the cost and time it takes to get from A to B.

“Seeing how fragmented and informal the market was, we saw an opportunity to formalize it and build a better user experience.” It is after this realization that the idea of Sendy was born, a company that seeks to digitalize the logistics industry and thus easing the flow of business.

As for how Sendy hopes to expand Meshack says “We’re looking to deepen our presence in East Africa and we recently set up in Côte d’Ivoire. Our plan is to also expand into West Africa and North Africa.”

Source: How We Made It in Africa July 14, 2021

Political turmoil could cost Kenya petroleum trade business from Uganda.

Political rifts have gripped Kenya recently and lines have been drawn in the sand, President Kenyatta and Deputy President Ruto have long been estranged and as a result the new alliances and sides taken have had an impact on trade.

Uganda accounts for a large percentage of the petroleum imports that are commissioned through Mombasa Port, recently the East African nation started a trial delivery of petroleum products through Dar Es Salaam port via Lake Victoria after a 16-year break. Refined petroleum makes up for 13% of Kenya’s total exports.

Uganda Railways transported 500,000 liters of petroleum products across Lake Victoria from Tanzania. This further widens a looming worry over Kenya’s trade due to worry over political instability as the rest of the northern corridor explores other ports.

Source: Daily Monitor July 17, 2021.

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