Higher transport costs to see local consumers spend more on goods.
The Rwanda business community using the Dar es Salaam port to transport goods are bracing for tough times as Tanzania moves to lower permissible axle loading limits starting March 1.
The changes are expected to increase the cost of doing business locally due to higher transport costs expected to raise the prices of several key imported commodities and those manufactured from raw materials imported through the corridor.
The Rwanda business community using the Dar es Salaam port to transport goods are bracing for tough times as Tanzania moves to lower permissible axle loading limits starting March 1.
The changes are expected to increase the cost of doing business locally due to higher transport costs expected to raise the prices of several key imported commodities and those manufactured from raw materials imported through the corridor.
Local transporters told Rwanda Today that tonnages per truck could reduce by between two to five tonnes when Tanzania adjusts downwards the legal weight for commercial vehicles on its roads.
Robert Bapfakurera, a transport and logistics firm owner and also the chairman of the Rwandan Private Sector Federation predicted a 10 per cent loss based on the transport costs for a 27-tonne truck, which will be reduced to only 25-tonnes under the impending weight limit.
“The reduction is significant considering that a 10 per cent drop translates into more than $350 in losses per vehicle. This is a lot of money because there are some goods like rice, edible oil and others that don’t even generate that much in profit when sold,” said Mr Bapfakurera.
Extra costs
He added that higher transport costs will see local consumers spend more on goods that come through Tanzania as the new weight limit will attract extra costs on top of fuel, per-mileage driver pay and import permits fees expenses, which have remained unchanged.
Rwanda relies heavily on the central corridor for imports of goods like rice, sugar, edible oil, cooking gas, construction materials and fuel, among others while other goods come through the port of Mombasa in Kenya.
Ephraim Rwamwenge, a local importer, said that transport costs already accounted for 30 to 40 per cent of the total costs of imported products for consumers.
“The new weighing rules will have a direct effect on the overall cost of commodities,” said Mr Rwamwenge.
Transporters voiced concern about the new axle load rules making the Dar es Salaam port less attractive, but were still unsure of the extent to which Tanzania would implement the changes.
The Dar es Salaam government had initially planned to enforce the weight rules in January but later offered an extension pending installation of weighbridges.
Rwanda Today learnt that several importers had been stocking up some goods in anticipation of costlier transport costs when the rules come into force on March 1.
Tanzanian authorities said they were complying with the East Africa Community Vehicle Load Control Act adopted in 2016. The Act determines the maximum permissible weight limits for load and vehicles on regional trunk road networks.
For instance, Tanzania wants to lower the weight in axle of super single tyres from the existing 10 tonnes to 8.5 tonnes. Noncompliance attracts a $15,000 fine or three-year jail term or both, according to the impending weight rules.