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EAC transport costs down by 40 per cent, survey shows

NEWS
By Graham Kajilwa | January 11th 2016

Transport costs have reduced by up to 40 per cent in the last four years across the East African Community (EAC), a new report has revealed.

According to the 2015 East Africa Logistics Performance Survey, improvement of Mombasa Port operations and ongoing infrastructure projects in the EAC had contributed to the trend.

The report says average transport rates between Mombasa and other major towns of East Africa had been on the decline from 2011 to 2015.

The reduction has been attributed to efficient operations in handling of cargo that is going parallel with improved infrastructure.

“The average cost of transporting a 40-foot container from Mombasa to Nairobi gradually reduced from a high of Sh130,000 per 40-foot container to Sh100,000.

“The trend is replicated on the Juba route which registered a drop from a high of Sh980,000 to a low of Sh550,000,” read part of the report.

The survey further attributes this to a plunge in fuel prices which in turn increased the number of fleet trucks that lead to cut-throat competition among truckers.

Decline rate

“The route with the highest rate of decline was Juba at 44 per cent while the least gainer was Bujumbura with a 14 per cent increase,” it added.

However, this was quite the opposite of the Central Corridor which Tanzania is part of where on average the transport rate increased by 39 per cent over the same period; Kampala rates increased by 79 per cent while Bujumbura remained relatively stable at three per cent.

“EAC needs to promote convergence of national laws that affect international trade transactions in line with the Treaty for Establishment of the EAC,” reads the report.

The survey by Shippers Council of Eastern Africa further noted that lake services in the region ran without internationally accepted standards necessary to ensure safety of life, navigation and prevention of pollution.

“Vessels trade without rules, regulations, navigational aids, trained manpower and pollution controls.

“Although there is an inland waterway transport agreement under the EAC Development Strategy, providing minimum internationally accepted standards for the conduct of safe maritime activity is yet to be fully implemented,” said the report.

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