Rising shipping charges a concern in East Africa

Wednesday December 08 2021
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EAC trade hit $5.9 billion last year despite many hurdles. PHOTO | FILE

By Zephania Ubwani

Arusha. Business captains in the East African Community (EAC) region say they are concerned by escalating maritime transport costs.

They said while intra-regional trade has kept on rising, businesses continue to encounter high transaction costs related to shipping and allied logistics.

This emerged here yesterday during the signing of a Memorandum of Understanding (MoU) between the East African Business Council (EABC) and Inter-Governmental Standing Committee on Shipping (ISCOS)

The agreement is intended to ease and reduce high transaction costs related to maritime, shipping, transport and trade logistics in the EAC in the EAC bloc.

“The cooperation delves into joint advocacy for the conducive policies for the maritime and shipping industry to reduce high transaction costs and ensure seamless flow of trade,” said EABC executive director John Boso Kalisa.

He stated that congestion, delays, complex freight clearance procedures, inadequate storage and birthing facilities, piracy and terrorism are among the challenges at the EA ports.

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The cooperation inked at the EABC head offices in Arusha also focuses on training, information sharing and supporting shippers (importers and exporters) and other players in the shipping logistics.

ISCOS secretary general Daniel Mwanza Kiange said, this partnership will enhance the efficiency and competitiveness of shipping and maritime services for socio-economic development for eastern, central and southern Africa.

He explained in 2020, cargo at Mombasa and Dar es Salaam port was 34.1 million tonnes and 17 million tonnes respectively.

He added that the partnership will boost collaboration with port authorities on matters affecting port productivity and their impact on trade logistics costs and consultations with cargo owners and service providers.

“In the long run this will boost the bargaining power of the EAC bloc as most maritime services are offered by international companies,” he further explained, according to a dispatch to The Citizen.

He said the cooperation will reduce the high cost of doing business, investment and shipping logistics in the region.

According to EABC, an apex body of private sector associations and corporates based in Arusha, intra- EAC trade hit $5.9 billion last year despite being hampered by hurdles related to shipping and allied logistics.

Regional analysts insist that trade facilitation in the maritime industry was vital for the EAC bloc to boost the competitiveness in light of the trade opportunities availed by the African Continent Free Trade Area (AfCFTA) and the global market.

ISCOS mandate is to protect and promote shipping and maritime interests and ISCOS is Africa’s Centre of Excellence for Shipping and Maritime Matters.

The organisation enables public and private sectors to engage on matters affecting the seamless flow of exports and imports along the entire transport and trade logistics chain.

It has been instrumental in the formation of Shippers’ Councils in the Eastern and Southern Africa region through the mobilization of cargo owners (importers and exporters).