The structure and economic impacts of maritime transport in Kenya

Abstract

Transport is one of the industries In the tertiary sector of the Kenyan economy. Maritime transport is a part of the transport industry and in Kenya it is the mode by which over 90 per cent of her international trade is conveyed. This study is on maritime transport in Kenyan international trade. It examines the structure of the industry and attempts to find out the factors used in determining freight charges in the dry general cargo Trade and their relative importance .. Linear regression analysis, results based on data collected over a period of six months suggest that value of cargo has the highest explanatory power among the other variables which are distance cargo is conveyed and its tonnage. Distance and tonnage are not significant in several trade zones. It is also realized that the level of freight rates in the Kenyan trade is higher than in most parts of the world by comparisons with levels worked out by UNCTAD. This indicates some degree of overcharging and high possibilities of monopolistic behaviour by the shipping conferences operating here. It would result in Kenya incurring excessive costs on shipping her imports. Finally estimates of excess costs paid by Kenya for her seaborne international trade are calculated and are found to be substantial. This implies that Kenya loses directly in the way of resource extraction by the amount of excess charges paid for thi transport services. It also has negative effects because the prices of locally made products are higher in the local markets and also may not be competitive for export markets.