Thursday, February 8, 2018

20pc plunge in air cargo volume triggers concern


By Alex Malanga @ChiefMalanga

Dar es Salaam. Cargo volume dropped by 20 per cent between 2015 and 2016, a new report has established.

The document, titled ‘Civil Aviation Statistics of Tanzania, 2016,’ shows that the cargo tonnage decreased from 30,021 to 24,030 during the period.

The volume of domestic cargo fell by 15.7 per cent, to 2,042 tonnes while international cargo dwindled by 20.3 per cent, to 21,988 tonnes.

The Tanzania Civil Aviation Authority (TCAA) report associates the drop to factors such as the lack of business attractiveness and facilities at main airports and high airway transport costs.

Others are the decrease in the volume of business activities within the country and a fall in food exports from Tanzania to the Comoros.

“Unfavourable business environments at Julius Nyerere, Kilimanjaro and Abeid Amani Karume and Mwanza airports are to blame for the drop in airfreight,” reads the report in part.

It noted that some exporters had shifted to use airports such as Jomo Kenyatta and Entebbe to transport fish fillets, meat, flowers, vegetables and fruit.

To reduce transport costs, according to the regulator, entrepreneurs who do business between Tanzania, Middle East and Asia prefer to use waterways to ferry their goods.

“It’s no longer business as usual. Some companies have found the environment unbearable and have wound up business,” Swissport chief executive officer Mrisho Yassin said.

He speaks about tighter fiscal policies, saying they have changed the business environment.

Since President John Magufuli came to power in November 2015, he has been waging a campaign against corruption, wasteful spending of public funds and laxity.

The tax collection system has been strengthened, leaving dishonest traders whining.

Mr Yassin said unscrupulous businesspeople were indeed denying the government of revenue.

Swissport --a ground and cargo handling service provider -- accounts for 99 per cent of the industry’s market share in Tanzania.

The company handled 20,145 tonnes of cargo in 2016, down from 24,874 tonnes in 2015.

The decrease cut its revenue to Sh20.139 billion from Sh22.033 billion.

However, the situation improved in 2017 as the company invested Sh12.1 billion on the construction of the new import warehouse and installation of equipment and upgrading of cold rooms to enhance its handling of perishable cargo.

Sh2.8 billion was spent in procurement of ground support equipment and staff transport vehicles.

“The investment enabled us to improve efficiency,” noted Mr Yassin. As a result, Swissport missed its revenue target by only 10 per cent.

“Air transport suffered in 2016 when the government embarked on cost-cutting measures,” said Precision Air corporate affairs manager Hillary Mremi.

TCAA says countries have been adopting more flexible regulatory approaches to widen air cargo market sizes.

The International Civil Aviation Organisation has developed guidelines for air transport agreement, for optional use by states in liberalising air cargo services.

According to preliminary data from the Airports Council International, total cargo handled by airports worldwide in 2016 increased by 3.3 per cent from that of the previous year.

International freight handled rose by 4.3 per cent.