The new ‘Logistics Innovation for Trade’ fund launched by Trademark East Africa is a new financing vehicle for companies and organisations seeking to enter this market. At the fund’s presentation in Vlaardingen near Rotterdam, not a single word was said about air cargo. CargoForwarder Global wanted to know why not.
In recent years the economies of the East African region have grown by an average of 6% per annum, calling for a major upgrade of the logistics infrastructure and expertise. Of the 5 countries
making up the East African Community, namely –Burundi, Rwanda, Uganda, Kenya and Tanzania - 3 are land locked, as are the eastern parts of the Democratic Republic of Congo and South Sudan. Due to
the poor road and rail infrastructure linking the seaports of Mombasa and Dar es Salaam with the hinterland, surface transport is very costly.
Agricultural products are among the main exports and both Nairobi and Entebbe are well equipped to handle them. The Kenyan airport can boast state-of-the-art facilities such is offered for example at the Swissport facility and Transglobal Cargo Centre. Entebbe too, is a well solicited cargo station, still on the top three list of Brussels Airlines Cargo. Still, air cargo does not top the list of TMEA’s projects for better access to this growing market.
Looking for alternatives
“The cost of air cargo within the region is also high,” said Bert Hofhuis, LIFT Logistics Advisor. “There is also the question of (the lack of) quality and capacity within the region which is ranked very low. That’s why the flower exporters are looking for alternatives. It is estimated that about 30% of the Kenyan flower production can be moved by ocean. Agricultural products are not seasonal in East Africa, so they are not subject to time pressure. It is only when you have to take the time frame into account, that air cargo becomes an issue. At this very moment, air cargo does not make up very much in the modal mix we are presenting.”
On the other hand, there is no reason why air cargo should not have a place in the next 5 year strategy, says Frank Matsaert, CEO of TMEA. “Most of the big freight from and to the region moves by sea, truck and rail. For some of the landlocked countries, however, air cargo certainly has a role to play. Rwanda, to give but one example, has expressed its desire to upgrade Kigali Airport. We are thinking of including air cargo into our scope. And in the past we already supported some improvements in Bujumbura and Juba.”
Marcel Schoeters in Brussels