By Gael Raballand*
Containers spend, on average, several weeks in ports in Africa. In fact, over 50% of total land transport time from port to hinterland cities in landlocked countries is spent in ports.
Our recent study demonstrates that, excluding Durban and Mombasa, average cargo dwell time in most ports in sub-Saharan Africa is close to 20 days whereas it is close to 4 days in most large ports in East Asia or in Europe. In this setting, the main response has been to push for: (a) concession of terminal operators to the private sector, (b) investments in infrastructure (such as quays and container yards) and (c) investments in super-structures such as cranes and handling equipment.
What has been the result on cargo dwell time? Not much. On average, it is extremely difficult to reduce cargo dwell time. In Douala (Cameroon), for example, planners set an objective of seven days at the end of the 1990s, but the dwell time remains over 18 days (despite real improvements for some shippers).
How can this be explained? A common assumption is that the private sector (terminal operator, customs broker, owner of container depots, shipper) has an interest in reducing dwell time. But this is not always true.
Poor handling and operational dwell time generally add no more than two days. The bulk of the delay comes from transaction and storage time.
And firm surveys demonstrate that low logistics skills and cash constraints explain why most importers have no reason to reduce cargo dwell time; in most cases, it would increase their input costs. In addition, collusion of interests may reinforce rent-seeking behaviors among shippers, intermediaries and controlling agencies. Some terminal operators earn large revenues from storage. Customs brokers do not fight to reduce dwell time since the inefficiency is charged to the importer and eventually to the consumer.
Firm surveys also show that companies may use long dwell times as a strategic tool to prevent competition, similar to a predatory pricing mechanism. Incumbent traders and importers see a benefit to long cargo dwell time (2-3 weeks), which acts as a strong barrier to entry for international traders and manufacturers. Delays at port also may be considered a means to sustain rent generation for some shippers.
These findings may help explain why many trade facilitation measures have faced difficulties in sub-Saharan Africa. Market incentives are too weak for supply-side measures to drive radical changes. An implication is that governments and donors need to re-think intervention strategies. One of the worst options is to invest in additional storage and off-dock yards where congestion occurs. Structural issues that lead to long dwell times, including demand characteristics, need to be tackled before undertaking costly physical extensions.
The effective solutions to high dwell times in sub-Saharan Africa ports will revolve around the challenging task of breaking the private sector’s short-term collusive strategies and providing incentives for public authorities, intermediaries and shippers to reduce delays. In this regard, what has been done in Cameroon customs goes in the right direction in order to give advantages to the most compliant and professional shippers and better sanction non-compliant and rent-seeking shippers.
*Gaël Raballand is a senior economist for Africa at the World Bank.