A decrease in cargo at the port of Mombasa has affected freighters that have seen 40 percent of the trucks parked due to a lack of business.
The slowdown in freight forwarding demand has also affected transportation costs, and the cost of transportation to Kampala has dropped by 17 percent, according to the Kenya Carriers Association (KTA).
KTA CEO Dennis Ombok said they are now charging just $ 2,000 under $ 2,400 and the decline is attributed to slow demand.
Ombok said there has been a decrease in cargo volumes at the Mombasa port in recent days, reducing the number of trucks required to transport the goods.
“Cargo volumes at the port have dropped and now most trucks have been parked due to lack of business,” Ombok said in an interview with the Business Daily.
The acting managing director of the Kenya Port Authority, Rashid Salim, said that the drop in cargo has been caused by the effects of Covid-19 and the shortage of containers that have affected the shipping industry around the world.
“We are still working on the numbers, but a decrease would likely be the effect of Covid-19 and the shortage of shipping containers globally,” said Mr. Rashid.
The cargo business had started collecting between October and December 2020, when the port realized better performance.
According to KPA, the total return within this period not only recovered, but also exceeded the forecast target by 2.8 percent and 1.2 percent from the 2019/20 performance.
KPA data indicated that container traffic declined by four percent to 1,359,579 twenty-foot equivalent units (TEUs) in 2020, from 1,416,654 TEUs recorded in 2019.
KPA said the marginal decline was attributed to global lockdowns that disrupted business.
“The impact of the Covid-19 pandemic on the economy is reflected in the port’s 2020 performance, which was also 2.8 percent lower than the planned target,” KPA said last month.
KPA data showed that the port handled a total of 34.44 million tons of cargo in 2020 compared to 34.06 million tons handled the previous year.
The Covid-19 pandemic, which is still rampant in Europe and America, has contributed to shortages as shipping containers are not returning to China due to the drastic reduction in imports from China.
A global increase in demand for certain goods during the pandemic has improved normal trade flows, stranding empty cargo containers and causing bottlenecks, according to Reuters.
The cost of shipping a 40-foot container from China has risen to Sh550,000 from Sh330,000 in December, according to a lobby of traders.
Traders have attributed the sharp increase to a global shortage that has seen countries around the world scramble for empty containers for use.
A significant percentage of the products on Kenyan retail store shelves are shipped from China and other countries in the Far East.
These assets include electronic products such as mobile phones and televisions and their accessories, utensils, furniture, appliances, clothing, and prefabricated buildings, not to mention capital-intensive ones such as heavy machinery.
Kenya is heavily dependent on China for basic household supplies.