RLL Container Report - 28 February 2018
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 28 February 2018
A revolution in the making
It was only seven weeks ago that the President of Kenya, Uhuru Kenyatta inaugurated the new standard-gauge line linking the capital, Nairobi with the country’s principal port, Mombasa on the Indian Ocean. In so doing, the president not only inaugurated a rail line but also unleashed a transport revolution that will transform Eastern Africa stretching from Ethiopia and Southern Sudan in the north to Malawi and Zimbabwe in the south. The newly-opened, standard-gauge railway has already slashed the journey time between the Kenyan capital and its main port from 12 to a mere 4 hours. At the same time, the cost of transporting a 20` unit from the port to the capital will be cut in half to USD 500.
However, the Kenyans are not sitting on their laurels and are already working to electrify the line, which will allow the railway and intermodal operators to run double-stack train services, similar to those in North America. This will, in turn, further reduce the time and cost of transporting fertilisers and other import goods, as well as exports in the form of agricultural and mineral products. Little wonder that land-locked nations such as Ethiopia, South Sudan, Uganda, Rwanda, Burundi, Zambia, Malawi, Zimbabwe and Botswana are queuing up to participate in the project of the century in order to profit from this intermodal windfall. The government of Rwanda calculates that rail transport would slash the cost of trucking a 20’ container load from the port of Dar Es Salaam to Kigali from USD 4990 to USD 2504.
At the same time, fertiliser producers can join this jolly bandwagon by converting from bulk to far cheaper containerised shipments. They simply by-pass the middlemen and sign a direct deal with the governments of each of these landlocked states, which will receive fertilisers by intermodal transport at far lower rates. Everyone, except the traders in the middle, are winners. And to add the icing to the cake, the fertiliser producers and the large containership operators can use the same inbound boxes to transport agricultural exports as well as manufactured goods.
The Ethiopian authorities are currently discussing with major European retailers plans to open large, modern factories producing a wide range of consumer goods to be sold on the global market. African countries on the coast or connected to the ports of the Indian Ocean find themselves on the verge of their own version of a new Industrial Age. For their part, fertiliser producers such as Uralkali and Akron, Phosagro are opening up new markets at the same time as embracing a whole new approach to the transport and distribution of traditional cargoes by means of ISO containers rather than traditional bulk vessels. In embracing this new intermodal approach they have become masters of their own destiny.
John Keir, Ross Learmont Ltd.
28 February 2018
Copyright ©, 2018, John Keir