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With Lamu port up, Kenya now plans to raid Djibouti's business

NEWS
By Benard Sanga | May 28th 2021
The first cargo ship, Alianco, before off-loading containers at Lamu Port. [Omondi Onyango, Standard]

With the launch of the first berth of the Lamu Port, Kenya has set its sight on the share of businesses at the port of Djibouti.

Djibouti port poses a great challenge to the success of newly commissioned port because of its close proximity to Ethiopia.

Yesterday, East African Community and Regional Development Cabinet Secretary Adan Mohammed said a team of experts has been assembled to market Lamu in Ethiopia. He said the State was also keen to have a different body other than Kenya Ports Authority to run the port amid reports that global terminal operators were keen to run the facility.

“The team will aggressively market Lamu in Ethiopia. We are keen to get the Southern Ethiopian market. We know the threat posed by Djibouti,” said Adan.

Reports indicate that the Government was also open to allow major global powers to establish military bases in Lamu just like the case in Djibouti.

France, US, China, Germany and Italy have all established military bases in Djibouti. In Lamu, the US has a small military base at Manda.

Analysts say Djibouti has been able to attract both cargo and military bases because it is located between Somalia, Eritrea, and Yemen.

Djibout is also located near the Bab el Mandab Strait, which connects the Red Sea to the Gulf of Aden, is a critical corridor for international shipping.

Lamu is also disadvantaged in the quest to attract cargo from Addis because of distance with reports indicating that over 90 per cent of goods to landlocked Ethiopia pass through Djibouti.

"It is about 900 kilometers from Djibouti Port to Addis Ababa compared to 1,279 kilometers from Lamu Port," said Adan, adding that the government had also prioritised the construction of the roads.

Currently, the road from Lamu to Garsen is complete, Garsen-Hole-Garissa road is about 83 per cent complete and Garissa to Modogashe is also complete.

 “Modogashe to Isiolo is yet to start but it will start soon but Isiolo to Moyale is complete,” said Adan, adding that Kenya and Ethiopia have already established a common border post at Moyale.

“We want to attract big ships (Panamax ships) to drop cargo in Lamu before small ships transport it to Mombasa, Dar, Salala and Somali ports. Very many shipping lines have shown interest to use Lamu,” he said.

This means that Kenya is focusing on the transshipment business putting it in direct competition with the ports of Djibouti and Durban in South Africa.

KPA has already offered generous promotional offers to the shipping lines and shippers keen to use Lamu Port.

In the new tariffs, stevedoring charges have been reduced by 40 per cent.  Stevedoring is the loading or offloading of cargo from the ship.

Shore handling and wharfage services will also attract a 40 per cent discount.

Meanwhile, goods dropped at Lamu by big ships before they are transported to other small ports will enjoy a 30 per cent free storage period.

Domestic cargo will enjoy free storage for 15 days. Between 16th and 18th, Sh3,250 ($30) will be charged for a 20ft container while a 40ft container will attract Sh6,495 ($60).

“We will offer even more generous tariffs to attract cargo,” said Adan, while addressing the press in Mombasa days after President Uhuru Kenyatta launched the first berth of the Lamu Port.

 

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