What you need to know:
- The deliberate decision to help users and customers of the paort recover from the slump brought by the Covid-19 pandemic, conflicts and Climate Change was made early this month during the FIATA-RAME 2023 Logistics Conference, hosted in Kampala – Uganda.
Dar es Salaam. High optimism greeted the Tanzania Port Authority (TPA)’s decision to provide a free 30-day storage period to Ugandan importers.
Experts said the move will boost confidence of Kampala businessmen, many of whom have been using the port of Mombasa.
Recently, in response to the disruptions in the global supply chains caused by the Covid-19 crisis, global conflicts and climate change, TPA offered several incentives to the Ugandan shippers, including the 30-day free storage period for all their imports.
The deliberate decision to help users and customers of the paort recover from the slump brought by the Covid-19 pandemic, conflicts and Climate Change was made early this month during the FIATA-RAME 2023 Logistics Conference, hosted in Kampala – Uganda.
For several years now, Tanzania has been striving to attract Ugandan importers, but existing challenges have posed a hindrance to the efforts.
Reports show high transportation costs were the overriding reason Ugandan importers preferred Mombasa port over the to Dar es Salaam port for quite a long time.
For instance, 2018 statistics showing the cost of transporting one container from Dar es Salaam Port to Kampala was around $4,800 (Sh10.6 million) in 2018, compared to $2,700 (Sh6 million) from Mombasa.
The country’s ports are also disadvantaged by the distance to Uganda. While the distance from Dar es Salaam to Kampala, where most Ugandan imports are destined is about 1,600 kilometres, from Kampala, the distance from Mombasa to Kampala is about 1,200 kilometres.
With that reality, experts say TPA still needs to do more to win Ugandan importers
"Business is about caring for customers and what TPA has done is part of the process of wooing Ugandan importers. This will eventually bear fruit as the country strives to boost capacity to 30 million tonnes by 2030 from around 17 million tonnes in 2022,” said Dr Jane Buberwa, an expert based in Dar es Salaam.
She believes conducive environment for business is a pre condition to attracting traders. “Even with the distance factor, still better customer care can woo more freight forwarders," he said.
TPA has pledged to support the shippers and logistics service providers in building resilience in their operations and in adapting to the new trends and disruptions in international trade.
"TPA has a dedicated Ugandan shed, which is available for shippers to use at any given time as both a consolidation and deconsolidation centre, especially for imports,” Mr Yesaya Masangya, marketing manager at TPA was quoted as saying.
He said exports of up to 3,500MT are also allowed in this shade for consolidation purposes. “The 30 days will give shippers a more realistic import planning as well as comply with the requirements of various stakeholders, he added"
Dr Abdul Mkongwa, an economist from the University of Dar es Salaam said: "With all the ports we have, giving opportunities to traders is one of the ways to tell them that you are better than others and give them a reason to continue using your location."
"Traders do communicate among themselves. Considering the ongoing strategy to improve our ports, we can, with this generosity and conducive environment, attract traders who were not using our ports," he added.
TPA operates major seaports of Dar es Salaam, Tanga, and Mtwara, along with small ports such as Kilwa, Lindi, Mafia, Pangani, and Bagamoyo, and the lake ports on Lake Victoria, Tanganyika, and Nyasa.
Uganda is a strategic transit market to TPA. By virtue of her strategic location, this market is serviced through an efficient multimodal system, that is; the rail - lake network from the Port of Dar es Salaam to Jinja through Mwanza.