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Freight Market Update: May 31, 2021

June 4, 2021

A Sendy Freight Weekly Round-Up to keep you informed on all things freight and logistics in the region.

Freight Rates:

Northern Corridor Freight costs up 48% due to COVID-19 pandemic

Measures taken to confine and control the spread of the covid-19 pandemic have greatly increased the cost of freight across the region. A report by the Shippers council of East Africa (SCEA) indicates that rates increased in the key trading route which runs from Mombasa port, through the country and into Uganda, DRC, Rwanda, Burundi and South Sudan.

Freight charges on the Mombasa-Uganda route alone have increased from $2,200 to $2,500 per container in the first half of the year alone.

The cost of moving container goods to Kigali from Mombasa also increased from $3,400 to $3800, pegged mainly on the delays along the corridor and especially at the ports of loading and the exit borders.

The number of containers cleared within the four-day free period declined drastically at the Inland Container Depot, Nairobi (ICDN).

The survey titled “Impact of Covid-19 on Transport and Logistics Sector in East Africa” however points out a decrease in the road transport rate from Dar es Salaam Port to Kigali, from $3000 in January last year to $2700, in September.

“This is largely attributed to the directive by the Rwandan government to have the Inland Container Depot moved from the capital center to the Rusumo border,” the survey reads in part.

The Dar es Salaam Port to (DRC) Goma route however experienced an increase–from $4,150  in May 2020 to $4400  in September 2020.

At the onset of the pandemic, Rwanda was the fastest to respond among the East African Community peers, followed almost immediately by Kenya and later by Uganda.

The three countries responded by restricting cross-border movement, limiting flight travel, advocating for social distancing, encouraging washing and sanitization of hands, imposing localized lockdowns, banning local gatherings, and closing of schools.

The EAC transport and logistics sector despite being an integral part of the business value chain in the region was not spared the wrath of the pandemic.

Traders looking to Lamu Port to help reduce the costs of logistics

Stakeholders in logistics have recently been singing the praises of the opening of the Lamu Port, optimistic that it will reduce the costs of doing business (especially regionally).

The first consignment of goods has already been shipped through Kenya’s second commercial port.

Kakuzi PLC, a Kenyan agricultural company trading on both the Nairobi and London stock exchanges, which celebrated the commissioning of the new Port of Lamu with an inaugural 80-tonne cargo of avocados destined for France, said it will continue to use the facility in exporting its major products abroad.

Danish Shipping Line, Maersk, the first to make a maiden call at Lamu Port, said it will offer solutions and services centered around “our customers’ needs and they will be making regular call at Lamu and serve the people of Eastern Africa”.

The Kenya International Freight and Warehousing Association (KIFWA) national chairperson Roy Mwanthi said they are ready to work in Lamu.

As more business and opportunities move to the port it is sure to see a decrease in the cost of carrying out logistics business in the region.

Freight Traffic:

Kenya, Burundi Sign Deals to boost economic ties

After a bilateral meeting between President’s Evariste Ndayishimiye and Uhuru Kenyatta in Kisumu recently, the two countries signed agreements on trade and investment to strengthen economic ties.

In the meeting that took place at the state lodge in Kisumu, deals were signed on livestock and fisheries, public service, foreign affairs, trade, sports and culture.

Respective ministers from the two countries were given directives to address the various bottlenecks and barriers inhibiting trade including the use of Lake Victoria as a means of transportation and livelihood.

In a joint press conference, President Kenyatta intimated that Kenya and Burundi plan to prioritize Education in their post-covid-19 recovery plans and that together they would back the 4th replenishment for the campaign of the Global Partnership Education which aims to raise $5 billion for investment in education.

Kenya on the right track with railway transport

Kenya’s Madaraka Express passenger and cargo services marked it’s 4 year anniversary, the service has been credited with revolutionizing travel within the country offering charm and tranquility that is currently unmatched.

Operated by Africa star railway operation company (Afristar) and Kenya railways corporation (KRC), the express passenger trains travel at a speed of 120 Kmph thus condensing travel duration between destinations on the route.

Investment opportunities have been created for the communities on this route as well as fostered economic growth. As a result, the local tourism sector has been positively impacted and with it the lives of Kenyans both young and old by creating employment opportunities both directly and indirectly.

Since its inception the train has ferried over 5.32 million passengers and moved over 12 million tons of cargo.

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