By Dr. Sadok ZERELLI REC- TCC Meeting 14-17 February ... - MCLI

By Dr. Sadok ZERELLIREC‐ TCC Meeting14‐17 February, 2011Kigali, RWANDA

• I‐ MethodologyOUTLINES• II‐ Mombasa port procedures and costs• III‐ Total logistic costs structure• IV‐Program activities interconnection

Few Statements from literature• Costs of road transport in Africa were 40% more thanrates in South East Asia,• Transport prices for most African landlocked countriesrange from 15 to 20 % of import costs, a figure three tofour times more than in most developed countries.• Road transport in three Francophone African countries(Cameroon, Côte d’Ivoire, and Mali) was up to six timesmore expensive than in Pakistan and about 40 percentmore expensive than in France (where labor rates aremuch higher).

Total logistics chain costs1. Fixed Costs ofShipmentsSea freight to portarrival2. TransportationCosts• Road• Rail• Pipeline• Inland Waterways3. Transit Overheads• Customs proceduresand costs• Forwarding agent feesand middle men• Bribes and facilitationpayments4. Hidden Costs• Direct Costs associatedwith delays: Additionalport charges, containerdemurrage penalties andother charges• Indirect Costs associatedwith delays: Loss inbusiness opportunitiesdue to delays andunreliability. We estimatethese based on theopportunity costs ofextra inventory

Mombasa Port Traffic‣100% traffic increasesince 2000 : From 9.13million tonnes ‐ 18.9million DWT in 2009‣Port at 86% capacity in2009‣Imports dominate (85%of traffic)Imports dominate (85% oftraffic

Mombasa Port traffic (ctd)

Import/Export fromMom Export Export Export Import Import ImportOrigin Mombasa Mombasa Mombasa Durban Singapore Europe/UKDestination Rotterdam Dubai Europe Mombasa Mombasa MombasaProduct Fresh Agri (refirg) Fresh Agri (refrig) Tinned Fruit/Veg Paper Batteries VehiclesUnit (20, 40 container)40 40 20 40 20 Prime mover truckWeight of unit (tons)20 20 24 25,3 21 50 cbmTariff (USD) per Unit$4,750 $3,250 $1,500 $1,771 $1,700 $800

Flow Chart of Clearance Process for Imported TransitContainers: 27 steps required to clear Transit Container

Direct costs associated with port use (1 / 2)

Direct costs associated with port use (2/2)

Average clearing delays (days) from arrival atMombasa to departure from port / CFS

Summary of Direct Port Clearing Costs, per 20’containerExcluding costs from storage and demurrage due to delays

Total logistics costs by destination (in $/20’ forcontainer imported from Singapore throughMombasa port)

Program activities interconnectionCorridorAuthorityFactors behind thehigh logistics costsin a specificcorridorInput in TransportobservatoriesPerformance indicatorsTrade Facilitation Forum