Shipping to the Developing Markets of East Africa
Posted on Wednesday, October 28th
However surprising it may be, the East African countries of Kenya, Madagascar, Malawi, Tanzania, Uganda, Zambia and Zimbabwe are among the eleven most rapidly developing economies in the world between 2010 and 2020, ten of which are assigned to the African continent. Similarly, five of the six investment hotspots can be tracked to the African continent as well. In this context, let us have a look at the benefits of shipping to and from East African markets. Associated with frontier or pre-emerging markets, i.e. risky, undeveloped markets, the shipping industry of East Africa is governed by organisations such as the EAC Customs Union, the EAC Common Market or the East Africa Monetary Union. Consisting of the countries of Burundi, Kenya, Tanzania, Uganda and Rwanda, the East African Community (EAC) promotes increased competitiveness, investment, commerce and value added production as solutions towards an improved quality of life among Africans. The 2005-launched EAC Customs Union proposes that any trading activity between EAC members be duty-free and that a common external tariff apply to imports from third world countries. The 2010-launched EAC Common Market promotes the free movement of services, goods, labour and capital between EAC members. Finally, the East Africa Monetary Union proposes the introduction of a regional currency, an endeavour which is yet to succeed. In terms of economic and infrastructural development in East Africa, the initiatives include a number of important projects, such as the Mombasa-Kigali railway, the LAPSSET Lamu port of South Sudan, Ethiopia and Kenya, the Lamu-Lokichoggio railway, the Nairobi-Moyale railway or the KenGen project attributed to Kenya Electricity Generating Company Limited. These projects are seconded by a number of others in the areas of infrastructure, agriculture and tourism. It should be noted that the development of East Africa's railway system is bound to cause a significant drop in freight and transportation costs. However, the demands are very high indeed. American Export Lines (AEL) stands out as a 3PL provider with almost forty years of experience in shipping to East Africa, having developed a solid base of strategic agents and partners for carrying out intermodal shipping, warehousing and distribution activities, as well as final-mile deliveries. Delmas, Maersk, Simatech are some of the names featuring in this partner base. The freight forwarding services provided by AEL include ocean freight transportation, air freight transportation, intermodal shipping, dangerous goods shipping, project cargo and logistics and cargo insurance services. The oil and gas discoveries made in this part of the continent, along with the niobium and gold deposits, have also lured a large number of investors and explorers, starting with the Chinese CNOOC. Moreover, the energetic resources have drawn the attention of European companies such as Tullow Oil, Cove Energy, BG Group or ENI, among others. The reality is that East Africa has a great deal of potential to lure investors and traders, but no infrastructure development strategies. However, several governments are looking to develop major projects in collaboration with various trade associations, private companies and donors.
