Logistics costs in East Africa remain extremely high, compared to other regions in the world. Some of the contributing factors to the high costs include high cost of transport and warehousing. There is also significant variation in the time taken for export and import. This uncertainty in the logistics chain significantly increases direct, inventory and opportunity costs in the region. Studies indicate that logistics costs can range from anywhere between 30 to 60% of commodity value for rice (and other cereals), while the logistics costs penalty on high-value items like electronics are considerably lower.
TMEA’s logistics initiatives will enable manufacturers and traders to utilise cost effective logistics services in the region, which is projected to result in reduced logistics costs of basic commodities. Currently, large players dominate the EAC logistics sector as they control skilled personnel, information on trade flow and access to infrastructure. TMEA will build the capacity of smaller firms to effectively compete with larger firms in the market, by:
- Providing capacity-building opportunities to improve the quality of logistics services;
- Enabling access to credible data to overcome information deficits and building stronger advocacy; and
- Creating third party logistics infrastructure to allow them to provide end-to-end services to their clients.
Special focus will be put on encouraging and enhancing the participation of women in the sector as they are massively under-represented, despite their larger position in the regional labour market.