Malawi struggles to cut transport costs
Delays in clearing goods at Malawi’s major ports is squeezing most local importers and exporters out of business as they are incurring huge transport costs on their import and export consignments.
This is according to an analysis sourced by Nation Online this week, compiled by Combine Cargo—a Malawian owned freight services company represented both regionally and internationally. It was presented in Lilongwe during a third joint transport sector review forum last month.
Malawi largely depends on her neighbours for accessing ports and international markets and transport alone accounts for up to about 60 percent of the landed cost of the product.
Based on Combine Cargo’s analysis, both Beira, Nacala, Dar es Salaam and Durban ports continue to face delays to clear Malawi goods due to slow documentation, cumbersome clearing procedures, poor port equipment and congestion, among others.
Director of transport in the Ministry of Transport and Public Infrastructure Victor Lungu confirmed the delays in clearing Malawi goods at ports.
But he said government is currently harmonising speed with neighbouring countries to ensure a reduction in the time to clear goods at both ports and borders.
In the presentation, Combine Cargo executive director Eddie Kalua said: “Due to deficiencies in physical infrastructure, inefficient operations and high transport costs, our ability to offer competitive rates for our products on the international market is a serious challenge to overcome.”
On the Beira Port, Kalua said the harbour offers Malawi the shortest route but at the moment has several capacity constraints that limit its ability to serve Malawi and the region, including Zimbabwe, Zambia and the Democratic Republic of Congo (DRC).
On the Dar es Salaam Port, he said the harbour’s equipment has aged and needs replacement.
On the Durban route, Kalua noted that traffic passing through the port has to go through seven border points and the period of transit sometimes takes up to 15 days.
Demurrage costs are charges levied by shipping lines when the containers are not cleared within the specified grace period.
But he said delays in customs processes by customs authorities attract extra port charges which, he said, have a negative impact on the overall landed cost of any product into the country.
“Malawi’s transport costs are increasingly becoming unbearable due to other incidental costs such as port storage and demurrage charges…speeding up the port processes will help reduce these costs for Malawi destined traffic,” said Kalua.
