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Mombasa Benefits as Dar Port Deals With Congestion

Tanzania Ports Authority (TPA) has suspended the bagging of loose cargo inside Dar es Salaam Port to reduce the number of waiting ships and causing congestion in the facility.

TPA officials, in a letter to port stakeholders, explained the move as meant to increasing number of waiting ships, which has reached 40. This affords the port time to evacuate cargo and reduce waiting time for ships at the outer anchorage.

The letter was addressed to major loose cargo operators in Dar port, including Export Trade Group Yara Tanzania Company, Zenj General Merchandise and Premium Agro.

“Due to the current line-up (sic) of vessels at the outer anchorage waiting for berthing, we wish to inform you that bagging of cargo inside the port will be temporarily suspended to evacuate and reduce waiting time at outer anchorage,” reads the letter.

The move comes in the wake of massive congestion being experienced in the Dar es Salaam and Djibouti ports.

According to gomet.com, an online real-time port congestion portal, Dar es salaam has recorded 16 days of ship waiting time; Djibouti five days, with 18 ships waiting, while Mombasa has recorded highest port turn-around time of one day.

In October, the Tanzania government signed a Host Government Agreement (HGA) and lease and operation agreements with Emirati logistics major DP World to operate berths four to seven at the port to improve efficiency, and it is looking for other investors to operate berths eight to 11.

TPA Director-General Plasduce Mbossa said DP World will lease and operate four of the 12 berths at the country’s largest port. He said the partnership with DP World will improve the effectiveness and efficiency of the port by reducing cargo clearance time and increasing port capacity to process 130 vessels per month, compared with the current 90.

DP World Chairman and CEO Sultan Ahmed Bin Sulayem said at the signing ceremony in Dodoma that the company will invest $250 million over the next five years to upgrade the port, focusing on improving cargo clearing systems and eliminating delays.

Regional ports have been experiencing delays in the past few weeks and, according to Kenya Ports Authority (KPA), some ships destined for Tanzania are now being diverted to Mombasa port.

Last week, MV Jolly Oro, which was expected to offload its cargo in Dar es Salaam docked at Mombasa to discharge 510 containers belonging to Tanzanian importers, KPA Managing Director Capt William Ruto said.

South African ports, too, are suffering the consequences of inefficiencies, with two of the largest shipping lines suspending their direct call to the Durban over congestion.

After being hit with a series of port congestion surcharges last month, CMA CGM and Maersk decided to remove Durban from the port rotation their joint Middle East-West Africa Midas1/Mesawa service.

CMA CGM and Maersk, in a notice to its customers, said the decision was taken due to heavy congestion in South Africa and will be effective until, at least, the end of January.

Additionally, Port Elizabeth and Port Reunion will be called alternatingly by the companies’ joint Midas2/Protea service.

The reduced service also comes amid mounting costs. This month, MSC announced a $210 per 20-foot equivalent unit (teu) port congestion surcharge (PCS) for all South African ports beginning December 3, while Hapag-Lloyd will introduce a similar, $200, PCS on December 8.

With the suspension of Durban and increased congestion in other South African ports, Mombasa and Dar es Salaam ports have registered increased vessels scheduled to dock in the next 15 days.

Mombasa port expects 25 containerised ships in the next two weeks.

“We have seen an increase in traffic of ships since some regional ports experienced inefficiencies. With our new investments in the Container Terminal 2, we are capable in handling any vessel,” said KPA’s Capt Ruto.

“KPA has prioritised efficiency, eliminated waiters and reduced ship turnaround time, making the port attractive to shipping lines.”
In trying to revive the situation in its ports, South Africa has announced that it would inject R47 billion ($2.48 billion) into the troubled state-owned Transnet Group, which manages Durban — the country’s largest port, which is suffering massive container congestion.

The aid will take the form of a guaranteed mechanism to help Transnet meet impending debt repayments, said the National Treasury, taking into account the company’s “central role” in the economy.

Transnet “has experienced significant operational, financial and governance challenges in recent times and is struggling to fulfill this strategic role,” Treasury added.

The main opposition party, the Democratic Alliance, described the situation at the port of Durban as “disastrous” for the economy, while the port of Richards Bay (east) is also in difficulties.

The main opposition party, the Democratic Alliance, described the situation at the port of Durban as “disastrous” for the economy, while the port of Richards Bay (east) is also in difficulties.

“No guaranteed mechanism can tackle the root causes of this inefficiency and fiscal irresponsibility,” said Dion George, finance spokesman for the Democratic Alliance, criticising the government’s decision.

End of November, President Cyril Ramaphosa vowed that Transnet would shed itself of incompetence and address the major backlogs at the country’s ports.

If not, it could see the economy continue to bleed.

Around 71 000 containers are stuck on ships outside the port of Durban, a backlog which port officials say they will only be able to clear by next year.

Source: The East African