Kenya loosing port business to neighboring Tanzania

Last Updated 13 years ago by Kenya Engineer

Kenya’s Mombasa Port which is largely considered the East African gateway is reportedly losing its business to neighbouring Tanzania’s port of Dar es Salaam. Reports by Trademark East Africa show that Dar es Salaam has in the past five years increased its imports and exports in several landlocked countries while a decrease on the same has been reported in the port of Mombasa.

The report shows that Dar es Salaam port increased its share of Rwanda’s imports and exports to 68 percent from 41 percent in 2008 while Mombasa’s share of that trade has shrunk to 32 percent from 59 percent. Report also shows that Tanzania accounted for 89 percent of Burundi’s cargo at the end of that period, up from 76 percent in 2008, compared with Mombasa’s 11 percent.

With such turnovers over a short period of time, Tanzania seems to have identified a business opportunity that they seemingly won’t let pass. The country is reportedly spending at least $10 billion in constructing a new port at Bagamoyo, 37 miles northwest of Dar es Salaam, where it’s upgrading an existing facility.

Data compiled by Trademark East Africa shows that Dar es Salaam handled 12.1 million metric tons of cargo last year, about 45 percent less than Mombasa. The data also shows that Volume Growth Volumes at the Dar es Salaam port have increased an average 9.4 percent annually during the past five years, compared with 6 percent in Mombasa.

The loss of business to the Dar es Salaam port is attributed mostly to the post election violence that happened in 2008 disrupting transport of cargo from the port.

The two countries serve the same landlocked countries and thus the clients have an option to choose the best port to use considering speed and efficiency factors. This leaves the two nations with the best option being to improve their ports for better marketing power of the ports to respective clients.

Kenya has on the other hand made ambitious strides towards improving the ports efficiency. The president who is currently on a tour to China has signed deals worth KShs425 billion with China. A portion of the coffers will go towards the construction of a standard railway gauge that will extend from Mombasa to Malaba. This will help bolster the port’s efficiency by allowing faster movement of cargo from the port which has in the past been cited as a contributor to the ports inefficiency.

Time & distance
The port of Mombasa has been on the spotlight for some time now. Cargo deliveries from Mombasa to the Ugandan border town of Malaba, 800 kilometers northwest of the port, currently take an average of 18 days, according to Kenyatta’s office, which in June ordered the harbor to reduce the delay to five days.

The journey by sea of a container from Singapore to Mombasa, a distance of more than 7,500 kilometers, takes only a day longer, according to Wolfgang Fengler, the World Bank’s lead economist for Kenya. 

With the LAPSSET project underway, it’s expected that the port’s performance will increase to serve the growing east and central African market. Other projects ongoing at the port include construction of a new container terminal and dredging of berths.