abstract - welcome to university of bolton …ubir.bolton.ac.uk/983/1/frank chirwa dissertation 2015...
TRANSCRIPT
AN INVESTIGATION OF PORTS THAT SERVE LAND-LOCKED MALAWI WITH REGARD TO REDUCTION OF COSTS AND SUPPLY CHAIN OBSTACLES
FRANK GLADWELL CHIRWA
Submitted in partial fulfilment of the requirements of the award of a Master of Science Degree in Supply Chain Management
FACULTY OF WELLBEING AND SOCIAL SCIENCES
(University of Bolton, Off Campus Division)
The University of Bolton
April 2015
1 | P a g e
ABSTRACT
Malawi as a Land locked country face numerous of challenges in its supply chain
networks for both imports and exports due to a number of obstacles ranging from long
distances to the open sea, third-country transit regulations, poor road networks, high
inland haulage costs, fragile currency, fragile external relations with neighboring
countries, unreliable port infrastructures and capacities. This renders Malawian products
uncompetitive on the world market compared with countries with direct access to the
open seas. Over the years has continuously sought to find and develop the most direct
and cost effective route to the open seas that can substantially reduce the overall cost
of bring goods to Malawi considering that 55% of the total cost of the import charge
constitutes the inland haulage cost.
The continual search for viable options and alternatives led to the birth of this
investigation to review the current port options used by Malawi, potential sea ports that
could be used and also the proposed world inland port in Nsanje district on the Shire-
Zambezi waterways, which can be harnessed and developed into viable options with
regard to reducing the overall importation and exportation costs. It is also envisaged
that the results of the investigation will add value to existing knowledge on the various
challenges affecting efficient trade logistics in Malawi and ultimately form the basis for
policy makers to embark on projects designed to reduce importation and exportation
costs and elimination of supply chain obstacles from an informed position.
2 | P a g e
Table of ContentsABSTRACT................................................................................................................................................2
ACKNOWLEDGEMENTS........................................................................................................................4
LIST OF ABBREVIATIONS.....................................................................................................................5
LIST OF FIGURES...................................................................................................................................6
INTRODUCTION AND BACKGROUND................................................................................................7
Malawi’s Exports...................................................................................................................................9
Malawi’s Imports.................................................................................................................................10
Inland Haulage Issues........................................................................................................................12
Non-Tariff Barriers..............................................................................................................................20
The Problem Statement.....................................................................................................................21
RESEARCH OBJECTIVES...................................................................................................................23
Aim of the Study..................................................................................................................................23
LITERATURE REVIEW.........................................................................................................................25
Nsanje World Inland Port (Shire-Zambezi Waterway)...................................................................31
Beira Port - Mozambique...................................................................................................................35
Nacala Port – Mozambique...............................................................................................................39
Quelimane Port - Mozambique.........................................................................................................41
Dar Es Salaam Port - Tanzania........................................................................................................43
Durban Port – South Africa................................................................................................................46
Coega Port – South Africa.................................................................................................................48
RESEARCH METHODOLOGY.............................................................................................................50
Scope of the Study.............................................................................................................................52
Limitations of the Study......................................................................................................................53
Research Design................................................................................................................................55
Data Collection....................................................................................................................................56
Data Analysis.......................................................................................................................................57
SURVEY FINDINGS..............................................................................................................................68
Respondents Attributes......................................................................................................................68
User Perception of the ports in use..................................................................................................68
Reduction of cost of importation and exportation...........................................................................70
Development of Nsanje Inland Port (Shire-Zambezi Waterway)..................................................70
3 | P a g e
User perception of Quelimane Port in Mozambique......................................................................71
Overall best option for Malawi...........................................................................................................72
Critical Supply Chain Obstacles........................................................................................................72
CONCLUSION AND RECOMMENDATIONS.....................................................................................74
REFERENCES........................................................................................................................................76
APPENDICES.........................................................................................................................................83
Data Collection Questionnaire..........................................................................................................83
Trade Deficit Statistics.......................................................................................................................92
4 | P a g e
ACKNOWLEDGEMENTS
I sincerely thank my supervisors Mr. Owen Jones and Mr. Peter Chiligo, who supervised
and guided me through this journey. Words cannot express my appreciation for their
invaluable help, patience, and support. These two distinguished gentlemen have
opened my eyes to the academic world.
Many thanks go to Mr. Alex Chanza and Dr. Ida Mbendera for their guidance during the
research proposal processes. Their unwavering and untiring support cannot go
unnoticed.
I would finally want to thank my family, wife Rhoda and daughters Thelma and
Theodora for enduring long periods without my attention in the heat of putting up this
dissertation. Your understanding and patience is bearing fruits today. Above all, glory to
God for being with me throughout this journey.
5 | P a g e
LIST OF ABBREVIATIONS
ADB - African Development Bank
AIM - Agência de Informação de Moçambique
ATPC - Africa Trade Policy Centre
BTI - Bertelsmann Stiftung
CFM - Caminhos de Ferro de Moçambique
COMESA - Common Market for Eastern and Southern Africa
CYN - Chinese Yen
EAC - East African Community
EU - European Union
GDP - Gross Domestic Product
IMF - International Monetary Fund
KPI - Key Performance Indicators
LLDC - Landlocked and Least Developed Country
MITC – Malawi Investment and Trade Centre
MK – Malawi Kwacha
MRA - Malawi Revenue Authority
MSC - Mediterranean Shipping Company
NSO – National Statistics Office
NTB - Non-Tariff Barrier
ONC - On carriage
SADC - Southern African Development Community
TMSA - TradeMark South Africa
UNCTAD -United Nations Conference on Trade and Development
UNECA – United Nations Economic Commission for Africa
USD - United States Dollar
6 | P a g e
LIST OF FIGURES
Figure 1 – Map of Eastern Africa Figure 2 - Nsanje World Inland port Figure 3 - Beira Port Figure 4 - Bay of Nacala Port Figure 5 - Quelimane Port Figure 6 – Port of Dar es Salaam Figure 7 – Durban Port Figure 8 – Coega Port
7 | P a g e
INTRODUCTION AND BACKGROUND
Landlocked Malawi is a southern African country of approximately 13.1 million people
according to the last population and housing census conducted in 2008 (NSO, 2008). It
is also one of the least developed countries in the world. Malawi’s real GDP growth is
estimated to have been 5% in 2013 and is projected to accelerate to 6.1% and 6.2% in
2014 and 2015 respectively, driven by tobacco exports and continued growth in the key
sectors of agriculture, manufacturing and service (ADB, 2013). Malawi is a largely
importing than exporting country; the manufacturing industry is very small and limited to
production for domestic use. The industry in Malawi is concentrated in the urban centres
of Blantyre, the commercial capital and Lilongwe, the capital city and imports almost all
raw materials. The mining industry is also in its very infancy stages, with one uranium
mine in the northern part of Malawi. Currently Globe Metals of Australia is conducting
mining feasibility studies and testing Niobium samples at Kanyika in Mzimba District
which could yet be another revenue stream for the Malawi Government. The
government of Malawi has also recently granted oil exploration licenses to a few oil
exploration companies from the United Kingdom and the Middle East to prospect for oil
in the Lake Malawi. Due to its landlocked status, Malawi uses ports in Tanzania,
Mozambique, Namibia and South Africa for its imports and exports. However the
distances, port, road and rail infrastructure, transit and customs regulations, the overall
cost of importation or exportation is too high and renders the Malawi market unattractive
to investors. Most import commodities are containerized. United Nations Armenia
(2014), states that international merchandise trade for landlocked countries depends on
transit through other countries. This transit dependence, often coupled with
8 | P a g e
cumbersome border-crossing procedures and inadequate transit transport
infrastructure, substantially increases transport and trade transaction costs, erodes their
competitive edge, discourages investors, reduces economic growth and subsequently
limits their capacity to promote sustainable development.
Malawi’s Exports
As highlighted, the major exports out of Malawi are tobacco, sugar, cotton, tea and
coffee. Other exports include timber, pulses, apparel, mineral sands, fresh fish and
groundnuts. More recently Malawi has been exporting uranium yellow cake grade 7 but
recently mining of uranium has stopped due to fall in world prices. The Malawi National
Export Strategy Volume 1, 2013- 2018 states that in 2010 Malawi imported US$2.3
billion worth of goods and services (43 per cent of GDP), but only exported US$1.2
billion1 (22 per cent of GDP). This is a reflection of a big trade deficit and no doubt
Malawi needs to expand its export base to balance the import versus export statistics
and to leverage the economy (see annex 2 – trade statistics with the United States for
2015, 2014 and 2013). The overall external trade indicates imports have accelerated
more than the growing exports. During the period under review, total merchandize
exports registered an increase estimated at 41.3 per cent. According to MITC (2011),
the total export value in 2012 was MK296.5 billion, while in 2011 exports recorded
MK209.4 billion. In 2012, Malawi imported merchandize goods worth MK661.5 billion
compared to MK345.3 billion in 2011. Trade balance gap worsened from MK135.5
billion in 2011 to Mk365.2 in 2012.Tobacco cotton and tea is mostly exported via port of
Beira whilst sugar is exported via Nacala. Of course Illovo, the sugar producer in
9 | P a g e
Malawi, takes advantage of the fact that CEAR (Central East African Railways) have to
reposition back to the Port of Nacala, empty container wagons, to explain their
preference for Nacala Port for their exports hence are able to move sugar containers
from Malawi to Nacala Port at discounted rates. Under normal circumstances, the empty
container wagons have to be repositioned back to the Port of Nacala with no cargoes
due to the seasonal nature of Malawi’s exports but also generally low export volumes.
Malawi’s Imports
Most of the imports into Malawi are raw materials for the manufacturing industry, fuel
and petroleum products, medicines, chemical fertilizers, new and used vehicles,
foodstuffs and other commodities. Most of these import cargoes are containerized and
are imported into Malawi via Mozambique, Tanzania and South African ports.
Containerization of cargo ensures security, efficient loading and unloading, efficient
space utilization, eliminates unnecessary need for warehousing, ability to stack cargoes
that would not be otherwise stacked in a break-bulk environment. Almost 65% of all
imports are in form of containerized cargo and the balance is break-bulk cargo and
liquid fuels. However the challenge becomes the cost on inland haulages from the ports
to landlocked Malawi. Brasca (2012) lends weight to the foregoing that containerization
is especially useful for companies that move products in varying weight categories.
Heavy and light freight can be shipped together to utilize all available container
capacity, resulting in increased resource utilization, and fewer containers required to
move the same volume of goods. Imports into Malawi are faced with long distances
10 | P a g e
characterized by poor road and rail infrastructure from the ports of discharges and this
has a direct impact on the final delivery cost.
Malawi celebrated 50 years of independence on 6th July 2014 but has for the past 50
years depended on the ports of Dar es Salaam in Tanzania, Beira and Nacala in
Mozambique, Durban in South Africa for both imports and exports. More recently Port
Quelimane in Mozambique is being rehabilitated and could yet provide another
interesting prospect for Malawi. In terms of overall distance calculation, Mozambican
ports provide the shortest access to the sea however at some point due to the 16-year
Mozambican civil war; Malawi had no option but to use long and commercially
untenable routes to Durban in South Africa through Zambia and Zimbabwe but also to
Dar es Salaam on the northern corridor. This became a serious economic challenge for
Malawi with regard to importation of essential commodities such as chemical fertilizer,
fuel and medicines. For the record, current inland haulage costs from Durban to
Lilongwe is around $9000 per 40’ container, from Beira to Lilongwe is around $4000 per
40’, from Nacala to Blantyre is around $3900 per 40’ container and from Dar es Salaam
to Lilongwe is around $6500 per 40’ container. These costs are evidently very
prohibitive and counter-productive to the economy adding to the fact that most of these
imports will also be subjected to customs duties and taxes and after value addition,
manufacturers will add some mark up to sustain operations and business. This renders
Malawi produced goods to be very expensive on the market compared to similar
products in neighbouring markets. Due to the inland geographical locations of Lilongwe
and Blantyre, importers will either opt for Nacala or Beira despite each of these ports
having advantages and limitations and usage of these ports presents various supply
11 | P a g e
chain obstacles at continuous intervals. According to UNECA (2009) transit times on
African transport corridors are unduly long due to a number of reasons, including
unclear and sometimes conflicting rules and regulations, inefficient service providers,
roadblocks, as well as cumbersome administrative and customs procedures.
Inland Haulage Issues
United Nations Economic and Social Council (2002) suggests that the situation for land-
locked countries is almost always aggravated when being landlocked coincides with
other factors such as remoteness from major markets, tropical climates, considerable
distance from the coast, poor infrastructure, or an inadequate policy, legal or
institutional environment. When cargoes have been discharged at the preferred ports of
either in Beira, Nacala or Dar es Salaam, the cargo has to be moved to inland locations
either by truck or rail. This is the single greatest challenge in the importation and
exportation cycle considering the costs and logistics involved. The Malawi road
transport system is not well organized and the few road hauliers available are foreign
owned hence most of the imports and exports are moved by foreign owned trucking
companies. This essentially means Malawi cannot control the cost of inland haulage of
its own imports and exports. This situation can also create room for price collusion and
growth of cartels amongst the transporters to Malawi’s disadvantage.
Over the years, Malawi has been continuously sought to explore the most cost effective
and direct route to access the open sea in order to reduce the overall cost of importation
and corresponding trade logistics obstacles. Faced with the challenges as outlined,
Malawi decided in 2010 to construct an Inland port in Nsanje District on the banks of the
12 | P a g e
Shire River to connect to the Indian Ocean via the Zambezi River in Mozambique. The
thinking behind the project was that cargo vessels could be sailing all the way to the
Malawi Inland Port hence eliminating the need for inland haulages by trucks from the
third party country ports. Whilst this was a novel idea, it was forced through without a
proper feasibility study, the available facts were largely based on historical data
regarding vessels that used to ferry molasses from Nsanje to the coast (The Maritime
Aid Agency, 1997). Around the time, maximum tonnages loaded on the barges were
limited to 200 metric tonnes per barge basically representing close to 10 TEUS (twenty-
foot-container equivalent), quite low volumes compared to increased levels of
importation in modern times. However a number of issues that arose at the material
time i.e. absence of a feasibility study, obscure port throughput, channel capacity,
environmental concerns, incrementing of total import transit time, unascertained port
demand versus ability to repay the investment, different levels of interest by the
concerned countries and lack financial commitments by stakeholders, banks and donors
prevented the Nsanje Inland Waterway project from becoming a reality. In pushing for
the realization and local support for the project, the government of Malawi went into
overdrive and gave the public very questionable information i.e. that by opening up the
inland port, the cost of importing would go down by 60%. This was misleading
especially where there was no feasibility study of any kind to determine a number of
parameters that would have ensured commercial viability of the project. There are so
many factors that shape up the final cost of importation and exportation. Any port is of
economic significance if it is able to attract direct calls from port of loadings however for
this to happen a number of issues come into play e.g. volume of business, channel size
13 | P a g e
and depth. Otherwise the port was going to be a feeder along the existing supply chain
options i.e. barges would still be required to load cargoes from Beira, Quelimane and
Nacala for offloading in Nsanje before on-carriage to the industrial centres. With this
mode of operation, there is the increased handling cost at both ports in Mozambique
and Malawi and this would have not been attractive to the importing and exporting
industry. Malawi needs a viable and long lasting solution that effectively lowers the
inland haulage cost but also eliminates unnecessary trade logistics obstacles. Below is
a breakdown of the various costs/charges that form the shipping cost that is paid by the
importer in Malawi;
• Sea freight (Amount payable to shipping line for moving goods from point A to B)
• Bunker Contribution (Additional charge levied on the shippers to compensate for
fluctuations in the price of the ship's fuel)
• Carrier Security Fee (Surcharge for Armed Security for combating Piracy)
• Terminal Handling Fee (Amount charged at each port including loading,
transshipment and discharge ports for handling of containers from one vessel to the
quayside and onto another vessel – also known as stevedoring costs)
• Wharfage (Charge payable to port operator)
• Security Scanning Fee (Electronic Security Scanning of Containers at
Beira/Nacala)
• On-carriage (Amount paid for inland haulage leg e.g. Beira to Blantyre or Nacala
to Lilongwe)
14 | P a g e
Sea freight forms a very small fraction of the whole shipping costs. For example, current
costs of a 40 foot container from Chiwan in China via Beira to Lilongwe will cost an
importer;
• Sea freight - $400.00
• Bunker Contribution - $1200.00
• On-carriage - $4171.00
• Pre-Carriage - $165.00
• Terminal Handling Charges at Port of Discharge - $175.00
• Terminal handling Charge at Port of Origin – CYN 1100.00 (Chinese Yen)
• Add local costs for clearing, storage at final destination – Approximately $200
The World Bank (2004) concluded in its assessment that the volume of trade for Malawi
is small and Malawi is not generating enough traffic by itself to justify its own gateways.
For instance petroleum imports do not fill a tanker, tea exports hardly fill an ordinary
cargo and the container traffic of Malawi is only a fraction of the capacity of the port of
Beira. Inland haulage issues into Malawi is also greatly affected by an ageing fleet,
trucks are capital intensive and with the conditions of the roads in the region most
trucking companies prefer used trucks from the United States. These old trucks have
problems of constant breakdowns, high fuel consumption and high maintenance costs
due to old age. Most of the truck operators are reluctant to invest in modern fleets due
to poor condition of the road networks in the region.
15 | P a g e
Figure 1 – Map of Eastern Africa (Port of Beira Profile Directory)
As figure 1 shows, the shortest distances to Malawi are in Mozambican ports (Beira,
Quelimane and Nacala), of these three ports, it will be noted that Quelimane Port
16 | P a g e
provides the shortest distance hence the need to investigate why this cannot be
harnessed into a port of choice for Malawi.
Major trading partners with Malawi include the Far East countries of China, Malaysia,
Singapore Thailand, India, Pakistan and japan, the European Union bloc, United States
of America, Canada and Brazil and of course South Africa on the local continent. Most
of these commodities are containerized in Malawi but sometimes due to issues of
container equipment imbalance and fumigation requirements, sometimes the cargoes
are moved break-bulk for containerization either in Mozambique or South Africa. A
number of international shipping lines operate in Malawi offering services from world
destinations via the ports of Beira, Nacala, Dar es Salaam and Durban and on-carriage
from these destinations except Port of Nacala is by road. Inland haulage cost
constitutes a big percentage of the overall importation cost whilst rail option should be
naturally cheaper, the available rail option via Nacala is on the contrary not, the rail tariff
is benchmarked against road and is very inefficient due to rail capacity constraints,
shortage of container carrying wagons, port infrastructure and management issues, as a
result the Port of Nacala is constantly with congestion and delays. The delays are so
excessive and detrimental to cargoes with short-shelf life e.g. food items and this
presents serious supply chain obstacles. Some businesses have failed to fulfil delivery
contractual agreements due to delays experienced in Nacala Port. The situation is even
worse during the rainy season when most of the rail sections are submerged in water
and renders the whole rail line impassable or leads to frequent train and wagon
derailments.
17 | P a g e
Although some rehabilitation has taken place, the line is in need of more extensive
rehabilitation in certain sections (particularly Cuamba to Entre Lagos) and the
expansion of the line into Zambia (Mchinji to Chipata) is required to provide a
comprehensive railway network. Nacala lies on the northern coast of Mozambique and
is the deepest natural port and a natural harbor on the east coast of Africa.
On the other hand the Port of Beira is not a natural deep sea port as it is situated on the
mouth of a river channel and as a result is faced with siltation problems which require
dredging at constant intervals to maintain water levels required for berthing of vessels
into the port. Dredging is a very expensive operation and each time the port is being
dredged, a surcharge is levied on all containers loading or discharging at the port to
cover for the costs of the dredging exercise.
Inland haulage from Beira Port to Malawi is by road, and it is quite efficient compared to
the rail option from Nacala Port however the drawback is the high cost charged by
transporters. Of course there is the Sena rail link from Beira which goes to Moatize, the
coal mining town in Tete province. This rail link can be connected to the Malawi link
from Nsanje District and provide alternative to the costly road haulage option. The huge
inland haulages costs should stimulate Malawi to find shortest, cost effective and most
direct route to the sea.
Depending on route and volumes, shipping lines may offer direct service or offer feeder
service to a particular port. For example, Mediterranean Shipping Company operates
five feeder vessels every fortnight from Durban, calling ports of Maputo, Beira,
Quelimane, Nacala, Dar es Salaam and Mombasa whilst other shipping lines like
MAERSK and CMA CGM are able to offer direct services from Far East into Beira and
18 | P a g e
Nacala. The feeder service usually involves a combination of series of transshipment
ports up until the final port of discharge. Such arrangements are subject to change
depending on vessel size, requirement to reduce transit times, demand and volumes.
All containers discharged in Mozambican ports to inland destinations are subjected to
transit clearance by the Mozambican Customs. This procedure entails that shipping
lines and forwarding agents submit copies of shipping documents to customs and place
the transit cargoes under customs transit bond to ensure that cargoes declared as
transit do not evade duty and find their way into the Mozambican market. This
procedure is not very efficient and documentation can be processed from within 3 days
of cargo discharging up to 15 days, this therefore leads to delays and eventual port
storage charges. These and other numerous non-tariff barriers in the ports leads to high
port dwell time and congestion. On average cargo takes 17 to 20 days inside port
before being moved to transit final destinations. Cornelder, the port operator of Beira
Port, offer port users 12 days free to clear and remove cargoes from the port storage,
whilst 12 days might sound reasonable, sometimes this is rendered useless by the
delays in processing transit clearance inside customs and cargoes are subjected to port
storage of $18 per 20 foot container and $36 per 40 foot container at the expiry of the
allowable free period up until cargo is removed from port storage yard. Supply chain
performance is affected due to huge transit time from port of loading to the port of
discharge through to the final destination mainly caused due to unnecessary delays at
port of discharge. The problem is so grave when cargoes involved are short-shelf life
type of commodities e.g. foodstuffs. Certainly for transit cargoes, it would have been
ideal to allow pre-clearance of cargoes before the actual vessel discharge however this
19 | P a g e
is not allowed and increases the cargo dwell time at the ports leading to port storage
charges. Security of cargo in transit is another big challenge for both Tanzania and
Mozambique, cases of cargo thefts have been reported on both routes.
From the foregoing, it is evident that Malawi needs to find means to lower the costs of
on-carriage for its cargoes in order to become attractive on the international markets.
Non-Tariff Barriers
Non-Tariff Barriers (NTBs) refer to non-tariff related trade restrictions resulting from
prohibitions, conditions or specific requirements that make importation and exportation
of goods difficult or expensive. COMESA, EAC and SADC have, in the past, developed
different mechanisms to identify report and monitor elimination of Non-Tariff Barriers
and resolve disputes. These mechanisms have, to a great extent, identified all the
common NTBs encountered in the region and the frequency at which they occur and
has attempted to facilitate resolution of the same through resolution at the Council of
Ministers level and other consultative processes (TMSA 2014). Whilst tariff and charges
are attributed to the high costs of Malawi’s imports and exports, several other non-tariff
barriers come into play. These include delays in port or customs procedures, where
cargoes are subjected to heavy storage charges which are added to the above charges
and borne by consignee at final destination. These are regular and constant problems
faced by Malawi importers and exporters. Sometimes customs in Mozambique will
decide to perform customs escort and a levy of $200 per container is charged, this
again adds up the very many other non-tariff barriers that makes cost of importing or
exporting very uncompetitive. When the trucks and rail reach the borders, there is an
20 | P a g e
endless array of paperwork and procedures to be followed usually leading to truck
detention of up to 3 days, the truck operators resort to charging truck detention fees at
the expiry of 48 hours, these costs are all for the consignee to bear. Sometimes the
Malawi Bureau of Standards will insist to examine certain goods right at the border
before consignment is allowed to cross into Malawi, this procedure again costs a lot of
time to conclude. These are non-tariff barriers and supply chain obstacles that need
solutions for the smooth and efficient supply chain performance. Based on the
foregoing, the researcher saw the need for a thorough investigative and comparative
study that looks at all the current options available to Malawi and how these can be
harnessed to the economic advantage of Malawi with regard to overall reduction of
importation but also removal and elimination of supply chain obstacles.
The Problem Statement
As highlighted in the introduction and background, Malawi is faced with huge inland
haulage costs for its imports and exports coupled with various supply chain operational
obstacles. Although being landlocked is a challenge, it is not destiny. There are practical
solutions to many of the problems faced by landlocked countries ranging across
comprehensive approaches to transit corridors, overall regional integration efforts, legal
and regulatory reforms, institutional and administrative overhauls, specific international
protection mechanisms and including an in-depth analysis of each landlocked country’s
foreign trade composition and its adequacy with regard to transport constraints (United
Nations Economic and Social Council 2002). Whilst attempts have been there to
establish Malawi’s own inland port to counter increased delivery costs and supply chain
21 | P a g e
obstacles, the process has been marred by several challenges including absence of
feasibility study, lack of interest from neighboring Mozambique and lack of commitment
from financial donors. This has effectively put brakes to Malawi’s desire to open up an
inland port and counter the various challenges. Development of an own inland port in
itself does not resolve the myriad problems affecting importation and exportation
challenges of Malawi. The proposed inland waterway solution in the absence of
feasibility study portrays a vague picture of the commercial viability of the waterway
against financial resources required to put the waterway at optimum use. Existing ports,
currently being used by landlocked Malawi, have different challenges but some could be
redeveloped and optimized to militate against the increased inland haulage costs, huge
delays, high transit times, customs inefficiencies and inconsistencies, poor road and rail
infrastructures. For example, cargoes will have been delayed at transshipment port in
Durban, at Beira port due to transit clearances and on arrival at the Malawi border
posts, MRA (Malawi Revenue Authority) and Malawi Bureau of Standards will also insist
to perform physical inspections of the cargoes; this again leads to delays of sometimes
up to 2 or 3 days.
22 | P a g e
RESEARCH OBJECTIVES
The subject under investigation is a critical topic for Malawi considering the various
challenges being faced but also the various efforts being done by Government to
counter the problems. The problems are cross-cutting in that various sectors of the
Malawi economy are directly. The objectives of this investigation are as detailed below;
a) To assess user perception and knowledge of the ports being used by landlocked
Malawi.
b) To assess the efficiency parameters (i.e. Port infrastructure, equipment, tariffs,
transit cargo legislation, customs procedures, transit times, on-carriage costs, port
throughput/capacity, channel size and type of vessels calling, natural restrictions) of
from the various current ports
c) To assess impact of distance on inland haulage costs to final destinations in
Malawi.
d) To provide recommendations on viable port options with quantifiable data and
measurable targets that may be harnessed and developed as first port of choice by
landlocked Malawi.
Aim of the Study
This study seeks to investigate critical factors that should provide a basis for meaningful
research and development of the shortest and most efficient route and access to the
open sea with regard to reduction of overall costs of importation and supply chain
obstacles. This investigation will contribute to available and existing literature because it
includes data on new ports e.g. Quelimane and Coega ports, previously not
23 | P a g e
documented with regard to Malawi imports and exports. The study also highlights critical
issues with regard to the proposed developments of Malawi’s own inland port in direct
relation to Malawi’s wish of reducing final cost of importation and also supplies chain
obstacles.
24 | P a g e
LITERATURE REVIEW
This Literature reviews draws from wide ranging sources of secondary data. The United
Nations has drawn up a lot of comprehensive statistics and reports on trade and
landlocked countries which provides a lot of insight to some of the issues under
research. Similarly a lot of academics and scholars have done extensive research on
matters relating to landlocked countries and their corresponding challenges to access
the seas. According to the United Nations Information Service (2015), landlocked
developing countries (LLDCs) lack territorial access to the sea which means they can
face significant challenges in trade, transport and infrastructure amongst other areas.
Ocean ports are a central and necessary component in facilitating trade. Yet, there is
only limited comprehensive information available on the efficiency of ports, much less
evidence of the effect of port efficiency on trade (Blonigen and Wilson 2006). This is
very true in the sense that water transport is the cheapest and most reliable due to the
fact only water connects almost all the continents in the world. Secondly the capacities
of cargo carried by water transport far exceeds those that can be transported by rail, air
and road hence by economies of scale, water transport becomes very cost effective and
every country needs so form of access to water transport. A port is the interface
between intercontinental transport and a place in the hinterland being considered for
production, assembly, or final distribution. Port capability and efficiency can greatly
influence the decision for locating a plant or distribution center, and often determine
whether a local producer can compete globally or regionally with other producers (World
Bank 2007). The foregoing provides basis for Malawi to continually seek viable port
options that can make its imports to compete globally. For example tobacco is grown in
25 | P a g e
Malawi, Zambia, Tanzania, Zimbabwe and even South Africa but whilst Tanzania,
Mozambique and South Africa have got their own sea ports, they have to compete for
the same market in America, Europe and Asia with the landlocked countries of Malawi,
Zambia and Zimbabwe. Dunne (2015) states that recognizing the economic
interdependence between landlocked countries and their neighbors is clearly important
and the solutions to the landlocked countries’ problems are pretty obvious. They include
improving the security environment, the countries’ own infrastructure (including inland),
neighbors’ policies, coastal access, other transport access and rural development. This
is a perfect example in the Malawi’s quest for own inland port, where among other
things, diplomatic relations between Malawi and Mozambique has been key in
preventing successful launch of the inland waterway project. Lahiri and Masjidi (2012)
suggests that diversification of the transit options to several neighbors of the landlocked
economies could potentially reduce the monopoly power of any single coastal neighbor.
Whilst the theory sounds correct that is dependent on the geographical setup where
other potential ports and coastal neighbors are viably present. In the Malawian context
that remains a challenge as the viable options only lie within Mozambican territory since
the other available options are Tanzania and South Africa. Snow et al. (2003) suggests
that landlocked countries are completely dependent on their transit neighbors’
infrastructure for access to international markets. Where a landlocked country only has
access to routes of poor quality, the cost of overland trade is significantly higher than
they would otherwise be. Hence, the cost of trade of a landlocked country is heavily
determined by the infrastructure levels, and, indirectly, by the level of development of its
transit neighbors. Malawi has the highest freight cost in the southern African sub-region
26 | P a g e
despite having manageable distances to the nearest ports in Mozambique but due the
poor quality infrastructure at Nacala or Beira ports, the poor road network from Inchope
to Beira in Manica province, from Moatize to Mussacama in Tete province contribute to
increased delivery cost for cargoes to Malawi. Landlocked developing countries
(LLDCs) face particular challenges that limit their potential gains from trade, and restrict
their resources for investing in development. The lack of access to the sea means it is
far more expensive to import essential items and export goods. It is estimated that the
basic trade costs of LLDCs are nearly twice those of neighboring countries with
coastlines (Kurz and Chandra Acharya 2014). The foregoing is practically true, most
small scale Malawian traders travel to Tanzania and South Africa to buy merchandize
for resale in Malawi due to the fact that they are able to make good profits. Arvis et al,
(2010) states that transport costs account for only part of the real cost of being
landlocked. They do not factor in transit delays and unpredictability, which are critical
parameters in international trade. UNCTAD Secretariat (2013) adds that the many
obstacles faced by landlocked countries’ trade transiting through other territories are
commonly known. They range from long distances to inadequate transport services and
infrastructure, and inefficient institutional and operational transit frameworks.
Whilst landlocked countries’ problems are often generalized, some landlocked countries
are better off than some others. Of course countries like Swaziland and Lesotho
completely surrounded by South Africa benefit from highly efficient South African ports,
customs, rail and road systems. Landlocked Botswana is economically advanced than
most countries with coastal lines and international ports mainly due to a vibrant diamond
mining industry in Botswana. According to a UNCTAD report (2013), there are 44
27 | P a g e
landlocked countries in the world, of which 31 are classified as LLDCs: 15 in Africa, 10
in Asia, 2 in Latin America and 4 in Central and Eastern Europe. Landlocked countries
do not have direct access to the sea and have to use third party country to access the
sea ports. Due to a number of issues including politics, regulatory red tape landlocked
countries are sometimes forced to use long distances to access the open seas when
alternative short alternative options are available. This creates a whole host of supply
chain challenges and obstacles.
Faye et al (2004) adds weight to the foregoing that landlocked countries not only face
the challenge of distance, but also the challenges that result from a dependence on
passage through a sovereign transit country, one through which trade from a landlocked
country must pass in order to access international shipping markets. Free passage in a
sovereign transit country is wholly dependent on good neighborliness. Similar
sentiments are echoed in the ATPC briefing (2010), that the lack of territorial access to
the sea, remoteness and isolation from world markets and high transit costs continue to
impose serious constraints on the overall socio-economic development of landlocked
developing countries.
In the mid-term review of the World Bank (2008) the Almaty Ministerial Conference in
2003 gathered to address specific problems to land locked developing countries where
a number of important resolutions were adopted including ;
Secure access to and from the sea by all means of transport according to
applicable rules of international law.
Reduce costs and improve services so as to increase the competitiveness of
their exports.
28 | P a g e
Reduce the delivered costs of imports.
Address problems of delays and uncertainties in trade routes.
Develop adequate national networks; reduce loss, damage, and deterioration en
route.
Open the way for export expansion
It is quite evident that the highlighted and adopted resolutions are indeed the common
challenges faced by land locked countries. In the Malawian case, being an agro-based
economy mainly producing tobacco, sugar, cotton and tea, products which are exported
to United States and Europe, easy and cost-effective access to the open sea is a non-
negotiable requirement.
On the other hand, due to unattractiveness of the landlocked countries there exists little
or no competition on the available infrastructure to try and push costs down. Point in
case is the current scenario in Malawi, where only one rail operator enjoys monopoly of
the rail route and the trend has been that the rail operator usually pegs their tariffs
based on the road tariffs. Very recently Mota Engil, a Portuguese engineering firm has
drawn up a concept to build and operate a dry port at Liwonde in Malawi, to consolidate
all exports via Port Nacala, in its presentation to the Malawi transport ministry, Mota
Engil believes that the dry port logistical center will be able to reduce transit times by 19
days on exports and 14 days on imports and this will translate to an almost 50% cost
saving on the importer/exporter. Whilst this theory is yet to be tested, it is one of the
moves to try and bring about competition in the supply chain market by competing with
existing corridor options i.e. the Northern Corridor, Mtwara corridor but also the
proposed Nsanje Inland Port. Of course the concentration of logistics at a single hub
29 | P a g e
brings along multiple challenges of cargo handling i.e. initially all cargoes being handled
and loaded from Lilongwe or Blantyre will have to be road hauled to Liwonde for
fumigation, containerization and subsequent movement to Nacala.
According to Matenje (2008), the Malawi Government is vigorously pursuing a multi
modal inland transport system to improve road, rail, air and inland water transportation
with a view to facilitating internal trade as well as import and export trade. Of course in
reality the air option is very expensive and not readily available for certain commodities.
Development of multi-modal transport systems for a land-locked country should
however consider a number of factors e.g. feasibility of the option, capacity or
throughput, return on investment, environmental concerns, political will, cost efficiency
and available financing.
It is quite interesting to note that chapter 7 of the African Maritime Transport Charter
(1994) obliges partner transit states for landlocked countries to grant facilities and
benefits to landlocked States and to apply nondiscriminatory administrative, fiscal, and
Customs measures. They agree to coordinate their policies of acquisition and uses of
land, river, air and maritime transport, and ports. They are encouraged to enter into
bilateral and multilateral conventions on transit and to ratify those in force. Whilst this is
the case, we have a very recent case of Mozambique dragging its feet on Malawi’s
intention to open up Nsanje World inland port on the shire/Zambezi river due to a
number of reasons. This begs the question, how can continental bodies’ effectively
police the implementation of charters and other agreements?
30 | P a g e
Nsanje World Inland Port (Shire-Zambezi Waterway)
Figure 2 - Nsanje World Inland port
Nsanje is the southernmost district of Malawi entirely surrounded by Mozambique. It the
exit point of the Shire River which is the major outlet of Lake Malawi and flows into the
Zambezi River all the way to the Indian Ocean at Chinde port in Mozambique. Malawi
has pushed so hard for the development of Nsanje inland port as a means of opening
up to the world but most importantly reducing costs of importation and exportation. This
development has been met with a lot of challenges both internal and external. There
31 | P a g e
has been limited development of roads and inland waterways to improve landlocked
countries challenges and in the case of river transport; the absence of navigable rivers
into the hinterland limits the use of such a mode of transport (ADB 2010). Without
entering into any formal agreements with neighboring Mozambique, Malawi went ahead
to construct the first phase of the proposed Nsanje port and commissioned a trial barge
to run from Chinde Port in Mozambique to Nsanje. This was thwarted and blocked by
the Mozambican governments who have resisted any attempt to commercialize sailing
in the Zambezi River without an environmental feasibility study. According to a blogger,
Jones (2010) Nsanje was indeed a port – Port Herald – for many years subsequently,
right up to the late 1960s. The problem is that both rivers are difficult to navigate (the
marshy Shire bit is only possible in a canoe now, it has silted up to badly, and the
Zambezi is extremely shallow in places). Not only that, but the Malawian government
has managed to upset Mozambique, who rightly point out that they’re not obliged to let
traffic use their river, and anyway there are no good technical, financial, or
environmental studies to support the viability of the project.. According to Robinson &
Wakeford (2013), Malawi has already spent millions of Kwacha on the construction of
the Nsanje World Inland Port, but the lack of a comprehensive feasibility study and
concerns raised by the Mozambican government have delayed the project indefinitely.
They further state that the future of the project will depend on the outcome of the
feasibility study and whether the Mozambican government – a critical partner in the
endeavor - can be convinced of its viability. This is a major setback to the whole
programme and a major sticking point. Contrary to common knowledge of lack of a
feasibility study, the Malawi government has continually courted investors for the
32 | P a g e
project. Mehler et al (2011), reports that there have been reported tensions between the
Malawi and Mozambique government over the proposed use of Zambezi river with
Mozambique rejecting the proposals on environmental grounds due to the fact that
extensive dredging would have too much impact on the river flows and a danger of
pollution. AIM Reports (2010) conveys the anger of the Mozambican President with
regard to Malawi sending a trial barge on the Zambezi River inside Mozambique without
following proper protocols and agreements. Diplomatic tempers flared again in 2011
when a barge destined for the inauguration of the Nsanje Port in Malawi was
impounded by the Mozambican authorities (Lalbahadur 2013). The issue of diplomatic
relations has been a crucial factor in the delays regarding the opening of the Nsanje
inland port. Landlocked countries must ensure to have good bilateral and diplomatic
relations with transit countries. According to BTI (2012), Malawi continues to enjoy good
relations with its neighbors, including Tanzania to the north, Zambia to the west and
Mozambique to the east and south. However, in 2010, relations with Mozambique were
negatively affected by the Malawi government’s decision to proceed with the launch of
the Nsanje inland port (which opens up Malawi’s access to Mozambique’s Indian Ocean
coastline through the Shire-Zambezi waterway) without the necessary approval by
Mozambique’s government, which insisted on a comprehensive environment impact
assessment. Similar sentiments are also echoed by the IMF (2012) that the Nsanje
World Inland Port was embarked upon without technical, economic and environmental
feasibility study. Malawi cannot afford to wait hence has to consider other appropriate
avenues. According to the Epoch Times (2012) delays by the government of Malawi in
completing the Nsanje World Inland Port is becoming the focus of increasing
33 | P a g e
resentment from local people promised jobs and development. The Malawi civil society
during the famous 20 July 2011 mass demonstrations in Malawi, raised in their petition
to Malawi Government a concern on how the contract to construct Nsanje Inland port
was awarded to a company with close links to the then President (civil society, 2011).
Whatever the angle it seems Malawi needs the full support of the Mozambican
government in order for the project to fully realize it’s potential. Until that is achieved,
the Malawi Government needs to start considering other existing options and see what
contextual value such options can bring to the desired goal of bringing down costs.
Beira port in Mozambique is accessible only road from Malawi but has potential to
connect via rail on the southernmost tip of Malawi on the sena railway line. Since
Malawi has a fully developed rail link to Nsanje district, it would require constructing a
few kilometers of rail to connect to the sena line and enjoy preferential and low rail rates
for cargoes coming in via Beira. In case the Nsanje project was successfully
implemented, an envisaged major drawback would the channel depth which at the
moment varies greatly from one stage to another. Secondly increased agricultural
activity along the banks of the Shire and Zambezi Rivers has significantly contributed to
massive siltation leading to floods altering of navigable river channels. In the event that
commercial sailing, the channel would require regular dredging to maintain water levels.
Environmentalists argue that dredging has ability to disturb the marine ecosystem. It is
also not known at this stage, which section of the importing and exporting community in
Malawi would opt for Nsanje port due to its apparent limitations in vessel capacity that
would ply along the route. Currently, there is an approximately 150meter quayside with
no gantries at the Nsanje port.
34 | P a g e
Beira Port – Mozambique
Figure 3 - Beira Port
Beira port is a concession operated by Cornelder de Mozambique, a joint-venture
between the Dutch company Cornelder (70%) and CFM (30%). The lease agreement,
effective since October 1998, has duration of 25 years, and Cornelder agreed to invest
US$ 15 million during the first five years (CFM, date unknown). Beira port is about 20km
from the sea on the Macuti channel and channel deepening is necessary if it is to attract
deep sea vessels and in particular to accommodate the deep-drafted bulk carriers
required for the export of bulk minerals (Harding, 2009). This problem is quite evident
35 | P a g e
during low tides when vessels cannot berth alongside the port due to low water levels.
This is very critical as it delays vessel berths by sometimes over one week. Beira port is
approximately 900km from Malawian cities of Blantyre and Lilongwe. On-carriage from
Beira to Malawi is only by road and currently this is the most preferred option since
transit times is only 3 days despite this, the road condition is bad especially from
Inchope to Beira. Due to the fact the only option is road, the cost from Beira is very high
unlike from port of Nacala. The transporters usually blame the high inland haulage costs
on ever increasing cost of wear and tear due to poor road conditions, truck delays at
border crossing affecting truck turnaround times, fuel cost and the distance. Currently
Beira port is the most highly used and preferred port by Malawian importers and
exporters, this of course is largely thanks to the inefficiencies of Nacala in terms of
inadequate container carrying wagons, unstable rail network and port congestion. Beira
port biggest problem is the average port dwell time due to customs transit clearances
regulations and procedures. Secondary major constraint in most African ports is that
Container handling falls below international standards in most ports. Even when
container gantry cranes are available, the number of container moves per crane hour is
usually 10 to 20, compared with 25 to 30 moves in the world ports (Foster and Briceño-
Garmendia 2010). This is also emphasized by Murithi et al (2012) that dwell times for
both ports (thus Beira and Nacala) are exceedingly high, with annual average for 2011
of 18.25 days for Beira Port and 26 days for Nacala Port. This is at a time when the
dwell time at Durban Container Terminal is under four days and well below the
international benchmark of less than seven days. In addition to port terminals
concessionaires shortfalls, other important contributing factors to high dwell times in
36 | P a g e
Beira and Nacala include a significant number of empty boxes kept inside the port by
several shipping lines, as well as use of marine terminals for confiscated containers by
customs authorities. Usually the free time allowed by Beira port authority is not sufficient
and cargoes are usually levied port storage charges which add on to the increasing
costs. According to Murithi et al, (2012) Beira and Nacala Ports do not offer favorable
productivity and efficiency advantages compared to other ports in Eastern and Southern
Africa. When benchmarked against several standard Key Performance Indicators (KPIs)
affecting port operations, including delivery, storage, transfer; and loading and
discharging cargo, as was done in this assessment, both ports exhibit remarkable
inefficiencies and low productivity. Another setback affecting Mozambique port users is
that full pre-clearance is not allowed by customs. These are very serious supply chain
operational problems and have a direct consequence on the overall costings especially
for transit cargoes to landlocked countries. Slow port operations leads to port
congestion and the port operators impose charges to shipping lines, which in turn
impose congestion surcharges to their clients. Port storage charges in Beira are the
single most punitive non-tariff barrier in Mozambican ports, especially as delays are
usually created inside customs when transit clearing cargoes either due to unstable
computer network systems or outright corruption. Cornelder, the port operator in Beira
has continuously sought to address these and other problems by among other things
deployed and commissioned 2 (two) additional gantry cranes in 2013 to increase port
operational capacity bring the total number of gantry cranes to 4 (four), 20 reach
stackers, 3 empty container handlers, 33 terminal trucks and 40 trailers. At the moment
Beira port boasts of 350,000m2 of well illuminated container yard capable of handling
37 | P a g e
400,000 TEUs per year, it has 144 reefer container points and a dedicated a dangerous
goods storage area. Cargo stacks opens 2 days before vessel estimated time of
berthing and closes the actual day of vessel actual berthing. Beira is currently served by
various shipping lines with both direct calls and through feeder service from South
Africa ports of Durban and Coega. Frequencies of calls of some shipping lines are;
Mediterranean Shipping Company – 7 days
Maersk/OACL – 7 days
PIL – 10 Days
CMA CGM/Delmas – 10days
38 | P a g e
Nacala Port – Mozambique
Figure 4 - Bay of Nacala Port
The Port of Nacala is currently ranked third in terms of cargo handling and container
handling among Maputo, Beira and Nacala, principal commercial ports of Mozambique
(Japan International Cooperation Agency 2013).Time and again Beira port faces a
number of problems which forces the Malawian importers and exporters to opt for
Nacala Port. Nacala is a natural seaport and is deep unlike Beira which requires
dredging time and again. With an average depth in the inner bay of 40 meters and more
than 200 meters depth in the outer bay, there are no restrictions on any vessel calling at
39 | P a g e
Nacala (SDV, undated). Port of Nacala has a container terminal storage of 2000TEU
capacity, 26 reefer container plugs and 8 warehouses covering 21000 m2. There is no
shore crane in Nacala and this effectively means ships have to use ships gear to offload
containers which is a very tedious task and operations drastically slowing down
operations (LBH South Africa 2015). Generally equipment and infrastructure is in state
of disrepair. The natural advantages of Nacala Port are almost squared off by poor
infrastructure. On-carriage from Nacala is only serviced by rail which is hampered by its
own share of challenges. According to USAID (2010), the railway freight logistics are
constrained by a myriad of interrelated problems, among which are: the physical
condition of the track; the lack of rolling stock and equipment; and sub-optimal train
operations. These constraints result in a downward spiral of low traffic volumes caused
traffic diversion, as in the case of Malawi’s transit traffic of due to low service level, lack
of service, low speeds, long transit times, low productivity, poor locomotive and wagon
availability and utilization. Further to the foregoing, the USAID (2010) report states that
users of the Nacala Corridor, which includes freight forwarders, clearing and shipping
agents, major shippers, etc., have not been sufficiently organized as a stakeholder
group to leverage their inherent power to address logistics constraints in the corridors.
With few exceptions, corridor users have often adopted a “go it alone approach”,
whereby issues of mutual interests e.g., port inefficiencies, terminal handling charges,
scanning and containers fees, unreliable rail services or high road freight rates, etc.
have not been generally addressed as a group with common interest. These challenges
again do not do Malawi any favor in as far as trying to make imports cheaper and
exports competitive.
40 | P a g e
For the Beira and Nacala review, either option presents serious supply chain obstacles
and being the main two current options for Malawi, Beira and Nacala, have huge
logistical challenges that requires pragmatic approach to streamline and provide
effective operations that benefits the hinterland countries.
Quelimane Port – Mozambique
Figure 5 - Quelimane Port
On the other hand Quelimane Port (see figure 1) presents the shortest distance of all
ports in Mozambique with regard to major towns in Malawi. At only 306km to Malawi’s
41 | P a g e
commercial city of Blantyre, Quelimane presents an exciting prospect worth
investigating and developing as it would drastically reduce transit times but also on-
carriage cost Quelimane Port was largely abandoned during the Mozambican civil war
but recently a number of shipping lines have started calling Quelimane port which is
north of Beira and South of Nacala. Quelimane is the administrative capital of the
Zambezia Province and the province's largest city, and stands 25 km from the mouth of
the Rio dos Bons Sinais (Delmas, 2013). The major drawback at the moment is the
absence of no direct road network from Quelimane to Malawi. Quelimane is connected
by asphalt road to Caia and the south of the country. From Quelimane north and west a
good partly new asphalt road runs as far as Mocuba. From Mocuba north to Nampula
(350 kms) and Nacala (+190 kms) the road is a good asphalt road that has been
recently resurfaced. From Mocuba west to the border with Malawi at Milange/Mulange
(180 kms) there is an unpaved road that during the wet season is generally unpassable
but is very good during the dry season. Quelimane is connected to the Zambezi River
by means of an inland waterway (Koopmann, 2013). Quelimane Port has 800 TEUs
container yard capacities, just like Nacala port, ships have to use own gear for
discharge and load operations which drastically reduces operational efficiency. There
are also 18 reefer plugs for reefer containers. Quelimane Port is also a concession
managed by Cornelder de Mozambique. Maybe unlike the proposed Nsanje world
inland port, Malawi can stand to benefit from Quelimane port by entering into bilateral
agreements with Mozambique and developing the road network to Quelimane from
Muloza Border in Mulanje, with a distance of approximately 180km, transit times could
be drastically reduced to almost less than 8 hours as compared to 3 days from Beira
42 | P a g e
and 7 days from Nacala. If fully developed, Quelimane port could present a real solution
in reducing the on-carriage cost of importing cargo plus fact that Quelimane is an
established port with shipping lines already calling the port, in other words, it will less
costly to opt for Quelimane since amenities are present unlike Nsanje where everything
has to start from scratch. Apart from the road network issues, Mozambican government
has so much interest to improve the capacity of Quelimane Port so that it can also be
used for oil and coal exports. The major drawback for Quelimane is the siltation which
reduces the depths required for vessels to berth and just like Port of Beira; it requires
constant dredging which is a fairly expensive operation.
43 | P a g e
Dar Es Salaam Port – Tanzania
Figure 6 – Port of Dar es Salaam
Dar es salaam in the capital city of the united Republic of Tanzania. Tanzania shares a
common border with Malawi in the Northern part but also along the shores of Lake
Malawi (known as Lake Nyasa in Tanzania). Dar es Salaam port is an important port
serving the Tanzanian hinterland but also landlocked Malawi, Uganda, Rwanda, Zambia
and Burundi. Other major ports of Tanzania are Tanga and Mtwara, however most
cargoes for Malawi discharge at Dar es Salaam. Most used vehicles are discharged in
Dar es Salaam from RORO (roll-on roll-off) vessels. A total of 18 shipping lines call the
Port of Dar es Salaam. Port of Dar es salaam offers 15 free days from vessel discharge
44 | P a g e
completion for transit full container loads there after storage charges apply at $40/20’
container and $80/40’ container. The Port of Dar es salaam is equipped with 5 ship to
shore gantry cranes, 32 container spreaders, 52 tractors, 77 trailers, 16 front loaders,
16 forklifts 3 mobile cranes and 1 reach stacker. The port operates 24 hours and also
requires dredging of the entry channel. Dar es Salaam port is approximately 1,800km
from Lilongwe and close to 2,100km to Blantyre. These are very long distances and
explain the very high on-carriage cost of up to $6500 per 40’ container to Lilongwe.
Most of the truck operators in Tanzania are not willing to haul Malawi cargoes as they
are return loads to Dar es Salaam, so the Malawi route is deemed not competitive. The
other major problem associated with Dar es Salaam port is congestion. According to
Japan International Cooperation Agency (2009) Tanzanian Ports Authority is making
efforts to expand container handling capacity through various measures to address the
prevailing congestion at Dar es Salaam Port’s container terminal. Though a traditional
approach, TPA has secured additional space for container operations capable of
handling 8,000 TEUs, by moving automotive vehicle cargo outside of the port area. The
JICA report states that apart from the congestion at the port, transit cargoes to inland
countries suffer from unnecessary delays at the border posts due to unnecessary
customs procedures. This is a serious supply chain obstacle especially that truck
companies will charge truck detention fees for idle trucks and short-shelf life cargos
suffer from unnecessary delays. Ntibarekerwa (2010) states that Dar es Salaam Port is
also faced with long container dwell times reaching 25 days in August of 2008. So it will
be noted that critical supply chain challenges affecting Dar es Salaam port include
congestion, long container dwell times, unnecessary delays at border posts and long
45 | P a g e
distances to the transit countries effectively contributing to high on-carriage costs.
However the challenges aside Dar es Salaam remains an important port to Malawi, this
particularly evident during the civil war in Mozambique when Malawi had to opt for
longer routes to access either Durban or Dar es salaam. While Malawi relies heavily on
Tanzania and Mozambique ports, it should ensure that diplomatic relations with these
countries are cordial at all times, very recently Malawi has been loggerheads with
Tanzania over the sharing of boundaries along the Lake Malawi similarly Malawi had a
diplomatic spat with Mozambique over the Nsanje Inland Port development. These
issues have negative consequences on trade and supply chain operations.
46 | P a g e
Durban Port – South Africa
Figure 7 – Durban Port
Durban is one of the major cities of South Africa and has one of the biggest and busiest
ports in Africa. The critical location of Durban on the North South Freight Corridor, an
important route for transit traffic bound for Zambia, Zimbabwe, Malawi and a connection
going as far north as Dar es -Salaam, puts it on the spot light and its performance is
extremely vital for countries along the corridor (Kgare et al, 2011). Durban is also a
major transshipment port for several shipping lines operating feeder services to
Mozambique, Tanzania, Kenya and Madagascar. Transshipment usually concerns
gateways that are able to combine feeder services and hinterland access or "pure"
47 | P a g e
transshipment hubs that are almost entirely focusing on feeder (linking deep-sea and
short sea services) or relay (linking different deep-sea services) functions (Rodrigue et
al, 2013). Durban Port compared to most African ports is one of the most efficient due to
decreased cargo dwell time. Kgare et al (2011) says the foregoing is a result of public
sector players such as customs, the port authority, putting pressure to change the
behavior of the private sector port users to better comply and reduce cargo dwell time.
In this regard, prohibitive charges for storage, coupled with strict enforcement, and the
possibility to pre-clear with Customs with advantages attached to it and service level
agreements binding both parties are critical tools for the reduction of cargo dwell time.
Durban Port despite its long distance to Malawi remains an important port up until
today. Again during the Mozambique civil strife, Malawi had no option but to take the
longer route via Zambia and Zimbabwe for its exports and imports. However with peace
and stability returning to Mozambique, Malawi quickly repositioned and started using the
Mozambican Ports. Currently some commodities from Malawi e.g. Tobacco is still
moved break-bulk to for containerization and shipping in Durban whatever economies
are benefitted by doing this are yet to be explained considering proximity of Beira and
Nacala which are relatively cheaper.. The drawback with Durban port to Malawian
importers remains the huge distances and corresponding huge on-carriage charges.
Most of the literature available on issues affecting landlocked countries suggests a
common theme of high trading costs, inefficient logistics, poor infrastructure and other
similar challenges. However few of the literature suggests how the challenges can be
overcome with internal administrative governance, domestic removal of non-tariff
48 | P a g e
barriers, upgrade of road and rail infrastructure, legal, diplomatic and international
instruments.
Coega Port – South Africa
Figure 8 – Coega Port, South Africa
Coega Port is also known Port of Ngqura, a deep-water port located on the east coast
of South Africa, 20 kilometres north east of Port Elizabeth and midway between Durban
and Cape Town. It is very new port officially opened on 16th March 2012; the port
boasts of very efficient world class port equipment and has capacity to handle
1,200,000 TEUS. Containers handled include imports and exports from across the
49 | P a g e
globe as well as trans-shipment cargoes serving primarily East and West coast traffic as
well as inter-line traffic from South America to Asia. Sometimes due to congestion the
port is used as transshipment port for feeder vessels into Maputo, Beira, Quelimane,
Nacala, Dar es Salaam and Mombasa ports. Just like Durban, the challenge for
Malawian exporters and importers is the long distance translating into high inland
haulage costs (Transnet National Ports Authority 2014).
50 | P a g e
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. In it we study
the various steps that are generally adopted by a researcher in studying his research
problem along with the logic behind them (Kothari 2004). Any research should have a
philosophy whether positivism, realism, interpretivism, objectivism, subjectivism and
pragmatism and the research should always ensure that precise and flawless
procedures are applied to generate solutions to a research problem. The set of
measures to undertake or perform the research procedures should be valid and reliable
at the same should seek to establish the results naturally without bias. The researcher
deployed a mixed method approach to the investigation i.e. both quantitative and
qualitative approached were used in the study. A questionnaire was deployed to mainly
the shipping industry e.g. customs, freight forwarding and clearing, shipping lines,
importers and exporters, the government, the academia to have as much diverse views
as possible. The investigation also used much on secondary data sources in form of
reports, websites, dissertations, journals and conference reports to add valuable
information for review. This study is motivated by the desire to investigate efficiency
parameters of the various ports that are currently being used by landlocked Malawi with
a view to identify the most cost efficient and most direct access to the open sea in order
to reduce the overall cost of importation and exportation but also eliminating supply
chain obstacles along the way. These obstacles range from regulatory red tape, long
distances, huge transit times, unnecessary long documentation requirements and
political influences. As highlighted, the study has adopted a combined qualitative and
51 | P a g e
quantitative approach, so this is basically a mixed method approach considering that
each method has its own strengths and shortfalls. Scholars and researchers have
highlighted the fundamental advantages of mixed method approach in that it provides
depth to the research. By mixing both quantitative and qualitative research and data, the
researcher gains in breadth and depth of understanding and corroboration, while
offsetting the weaknesses inherent to using each approach by itself (FoodRisc
Resource Centre 2015). Most mixed-methodology research begins with a qualitative
observation of an event or phenomenon. Qualitative study offers the opportunity to
provide subtle details that outline a problem. The research then uses a quantitative tool,
like a survey, to validate or invalidate observations made during the qualitative phase
(Mossy 2015). Malina et al (2010), writes that positivism searches for empirical truths.
Positivism is not about confronting “things themselves”, because direct observation of a
phenomenon is subjective and hence not reliable. Likewise, a phenomenologically
based methodology also does not create an immediate interpretation of phenomena to
the level of concepts, theories or statements of fact. Tashakkori and Teddlie (2010)
suggests that a fundamental assumption about mixed methods research in the social,
behavioral, and health sciences is that it might potentially provide a better (broader,
more credible) understanding of the phenomena under investigation than a
dichotomous qualitative/quantitative approach. Johnson-Burke (2014) adds that
fundamental principle of mixed research: advises researchers to thoughtfully and
strategically mix or combine qualitative and quantitative research methods, approaches,
procedures, concepts, and other paradigm characteristics in a way that produces an
52 | P a g e
overall design with multiple (divergent and convergent) and complementary strengths
(broadly viewed) and non-overlapping weaknesses.
A questionnaire (See annex 1) was developed to facilitate uniform data gathering to
ensure consistency. The researcher also used a lot of secondary data sources in form
of journals, corporate reports, newsletters, websites and conference papers. The
importance of the journals is that most of them have been reviewed by renowned
scholars who have done extensive research in similar fields and their theories have
been adopted by so many students and researchers. The questionnaire had been
structured to be deployed within the supply chain and logistics industry in Malawi. This
includes the tobacco exporters association of Malawi, the freight forwarding industry,
direct importers and exporters, the academia this is generally to get a feel from the
frequent users of the various ports and their expectations. The study targeted a
minimum sample size of 100 respondents which is quite representative considering the
nature of the industry involved however only 60 (sixty) questionnaire were distributed.
Scope of the Study
This study investigates the factors that the various ports being used by landlocked
Malawi presents in terms of efficiency and supply chain obstacles with a view to finding
solutions to reduce costs. The study looks at distances from the ports vis-à-vis inland
haulage costs, port infrastructure and equipment, custom procedures, road and rail
networks, port capacity, political and environmental issues. The investigation is also
looking at the proposed own inland port in Nsanje District and how the surrounding
issues affecting its continued development might impact on the shipping industry. This
53 | P a g e
therefore necessitated analysis of the individual ports to determine the efficiency and
obstacles as defined in the objectives. Whilst the research is looking at ports within the
reach of Malawi, it is drawing from wide ranging sources of literature including reports
from world international ports so as to draw parallels and lessons.
Limitations of the Study
Some of the ports under investigation have very little published material and data and it
was a big problem to generate reliable information for such ports. This was a problem
especially with Nsanje Inland and Quelimane ports; apparently these are relatively new
ports i.e. Quelimane Port despite being constructed in 1953, its use was stopped during
the Mozambique civil war up until very recently when the Mozambican government
started rehabilitating the port so that it can be used for coal exports. With Nsanje Port
the available literature is very old dating back to the times when barges with molasses
used to sail down the channel, so there is a general absence of technical data. However
the author based the minimum requirements for port channels and container carrying
vessel capacities to determine challenges that would be encountered with the Shire
Zambezi waterway in case of approval.
Other serious limitations included the problem of generating feedback from Government
respondents, most of who apparently couldn’t voice out diverging views from the current
government policy especially on Nsanje inland waterway. It seems the issue is highly
political in Malawi hence government employees especially from the Ministry of
Transport were not interested to put their personal views forward. Of course the
researcher understood the public service respondents since it has become evident that
54 | P a g e
the Nsanje project was a political pet project of the then President because since his
death in office, Nsanje Inland port has rarely featured in current government agenda.
Public servants in Malawi avoid as much as possible to seen to voice opposition with
government policy and be seen to align with opposing voices, this was however a
missed opportunity since government input into the survey could have added a different
dimension to the results. To counter this problem, though it yielded little results, the
researcher instead opted for questionnaires which did not oblige respondents to
mention their names. Very few respondents could also understand technical issues of
channel capacity limitations and port infrastructure issues and in view of this, the
researcher gathered as much secondary data as possible to compare as much
available written information as possible for the various port options. The other
challenge in conducting this investigation was time constraints i.e. to balance work
commitments and gathering of research material proved an obstacle. Secondly due to
the nature of the study and the industry in Malawi, the sample size selection was an
issue. The researcher decided to target 100 people to be served with questionnaires but
the number proved too ambitious, hence only managed to distribute the 60
questionnaires, the response rate was very low i.e. received 26 copies of completed
questionnaires. Some of the questionnaires were handed out in hard copies and other
respondents asked to be emailed the questionnaires. All the questionnaires that were
received from the respondents were completed accurately and were valid for data
analysis.
55 | P a g e
Research Design
The function of a research design is to ensure that the evidence obtained enables us to
answer the initial question as unambiguously as possible (Vaus 2001). Similarly with
this research, the design was to probe for similar data and parameters regarding the
various ports under review to provide a basis for comparison i.e. average dwell time,
port equipment, distance, capacity and storage but also to gauge public perception as a
valuable component of the research. Sometimes government will want to convince and
push through its strategy to the public on certain policies and projects when the public
has a different perspective and priority hence the idea to engage user perception. The
research design refers to the overall strategy that you choose to integrate the different
components of the study in a coherent and logical way, thereby, ensuring you will
effectively address the research problem; it constitutes the blueprint for the collection,
measurement, and analysis of data. The research problem determines the type of
design you should use, not the other way around (Kirshenblatt-Gimblett 2006).
This investigation was initially planned to be a qualitative study however in the course of
collecting data, it was noted that the research will be deficient if it does not incorporate
views from the industry through a structured questionnaire, so this necessitated a
modification and change in approach to a mixed method i.e. exploratory and descriptive
approaches. Mixed methods research is a research design with philosophical
assumptions as well as methods of inquiry. As a methodology, it involves philosophical
assumptions that guide the direction of the collection and analysis and the mixture of
qualitative and quantitative approaches in many phases of the research process. As a
method, it focuses on collecting, analyzing, and mixing both quantitative and qualitative
56 | P a g e
data in a single study or series of studies. Its central premise is that the use of
quantitative and qualitative approaches, in combination, provides a better understanding
of research problems than either approach alone (Creswell & Plano Clark, 2007). The
researcher developed a check point of the parameters to be tested for each of the ports
under review, the list was eventually converted into a questionnaire to gauge and test
the views and opinion of the respondents. The questionnaire was also structured in a
way to provide an opportunity to the respondents to give in their own words their views,
suggestions and understanding of certain relevant issues regarding the ports and
supply chain performance. The original plan was to involve a huge number of
respondents but in the actual research this proved untenable.
Data Collection
The researcher collected data through selection of secondary data sources but also
through a detailed questionnaire (see attached annex 1). The questionnaire was sent to
various selected respondents in hard copy format and through email. The sample size
was 100 (one hundred) but only sixty questionnaires were deployed but only 26
responded to the questionnaires and sent them back to the researcher. The researcher
dedicated two weeks to deploy and collect the finished questionnaires but this again
was not met due to a number of respondents having other commitments so this created
a delay in data collection and eventual data analysis. The type of data influences the
data collection methods i.e. questionnaires will assist a researcher to gather uniform
data. Questionnaires also facilitate elimination of researcher bias in that all respondents
give feedback on the same set of research questions which is not quite possible with
57 | P a g e
interviews or focus group discussions. Of course one setback with questionnaires is that
they cannot be used with illiterate people. Data collection needs to be systematic
otherwise wrong procedure can lead to inconsistent and invalid survey results.
Data Analysis
Data Analysis is the process of systematically applying statistical and/or logical
techniques to describe and illustrate, condense and recap, and evaluate data [online].
This being a mixed method approach, the researcher analyzed the qualitative data by
identifying and isolating common themes and patterns and organizing them into
coherent categories. This is always a very complex exercise that demands reading and
re-reading of the available data. The quantitative data was generated by the survey
questionnaire and the data collected was analyzed using SPSS version 16.0 mainly due
to its user-friendliness and simplicity.
Below are the results of the data analysis
58 | P a g e
0-3
year
s
4-7
year
s
8-10
yea
rs
11 a
nd a
bove
0-3
year
s
4-7
year
s
8-10
yea
rs
11 a
nd a
bove
0-3
year
s
4-7
year
s
8-10
yea
rs
11 a
nd a
bove
0-3
year
s
4-7
year
s
8-10
yea
rs
11 a
nd a
bove
0-3
year
s
4-7
year
s
8-10
yea
rs
11 a
nd a
bove
Basic Count(%) 1(3.85)
Intermediate Count(%) 1(3.85) 1(3.85)
Proficient Count(%) 1(3.85)2(7.70)2(7.70) 3(11.55) 1(3.85) 4(15.40) 1(3.85) 1(3.85) 1(3.85)
Expert Count(%) 3(11.55) 2(7.70) 1(3.85) 1(3.85)
Total Count(%) 1(3.85)2(7.70)2(7.70) 6(23.10) 1(3.85) 4(15.40) 4(15.40) 3(11.55) 1(3.85) 1(3.85) 1(3.85)
Basic Count(%) 1(3.85) 1(3.85) 1(3.85)
Intermediate Count(%) 1(3.85)2(7.70)1(3.85) 2(7.70) 2(7.70) 1(3.85) 1(3.85)
Proficient Count(%) 1(3.85) 2(7.70) 1(3.85) 1(3.85) 1(3.85) 1(3.85) 1(3.85)
Expert Count(%) 2(7.70) 1(3.85) 1(3.85) 1(3.85)
Total Count(%) 1(3.85)2(7.70)2(7.70) 6(23.10) 1(3.85) 4(15.40) 4(15.40) 3(11.55) 1(3.85) 1(3.85) 1(3.85)
Basic Count(%) 2(7.70) 1(3.85) 1(3.85) 1(3.85)
Intermediate Count(%) 1(3.85)
Proficient Count(%) 1(3.85) 2(7.70) 1(3.85) 3(11.55) 1(3.85) 1(3.85) 1(3.85)
Expert Count(%) 2(7.70)2(7.70) 2(7.70) 2(7.70) 1(3.85) 1(3.85)
Total Count(%) 1(3.85)2(7.70)2(7.70) 6(23.10) 1(3.85) 4(15.40) 3(11.55) 3(11.55) 1(3.85) 1(3.85) 1(3.85)
Basic Count(%) 1(3.85) 1(3.85) 1(3.85)
Intermediate Count(%) 1(3.85) 3(11.55) 1(3.85)
Proficient Count(%) 1(3.85) 3(11.55) 1(3.85) 1(3.85) 2(7.70) 1(3.85)
Expert Count(%) 2(7.70)1(3.85) 2(7.70) 2(7.70) 1(3.85) 1(3.85)
Total Count(%) 1(3.85)2(7.70)2(7.70) 6(23.10) 1(3.85) 4(15.40) 4(15.40) 3(11.55) 1(3.85) 1(3.85) 1(3.85)
Respondent Summary Logistics and Supply
ChainClearing and Freight
Forwarding
Knowledge of Imports and Exports
Knowledge of Port Operations
Knowledge of port current used by Malawi
Knowledge of port in countries surrounding Malawi
Imports/Exporting Academic Shipping Line
Respondent knowledge bout shipping
Frequenc
y%
Knowledge of Imports and Exports Logistics
Basic 1 3.8Intermediate 2 7.7
Proficient 16 61.5
Expert 7 26.9
Knowledge of port operations
Basic 3 11.5
Intermediate 10 38.
5
Proficient 8 30.8
Expert 5 19.2
Knowledge of port currently used by Malawi
Basic 5 19.2
Intermediate 1 3.8
Proficient 10 38.5
Expert 10 38.5
59 | P a g e
Knowledge of ports in countries surrounding Malawi
Basic 3 11.5
Intermediate 5 19.
2
Proficient 9 34.6
Expert 9 34.6
Total Cases 26 100
Basi
c
Inte
rmed
iate
Profi
cien
t
Expe
rt
Basi
c
Inte
rmed
iate
Profi
cien
t
Expe
rt
Basi
c
Inte
rmed
iate
Profi
cien
t
Expe
rt
Basi
c
Inte
rmed
iate
Profi
cien
t
Expe
rt
Case
s
Knowledge of Imports and Exports Logistics
Knowledge of port op-erations
Knowledge of port cur-rently used by Malawi
Knowledge of ports in coutries surrounding
Malawi
Total
0.0
20.0
40.0
60.0
80.0
100.0
120.0
3.8 7.7
61.5
26.911.5
38.530.8
19.2 19.23.8
38.5 38.5
11.519.2
34.6 34.6
100.0
Respondent 's know ledge about shipping
Most efficient port that serves Malawi N %Beira 22 84.6Nacala 1 3.8Durban 3 11.5Total 26 100.0
Key factors for the port efficiency (Responses)
N=26Beira
NacalaDurban
Good port infrastructure and equipment 11 3Short transit time and favorable regulations 8 Good customer service delivery 4 1Shorter distance to inland destinations 13 Lower cost of inland haulage 10 1 Availability of both rail and road 1
60 | P a g e
Vessel capacity calling port 4 2Port channel depth 1 High security 2 1
85%
4% 12%
Most Efficient Port that serves Malawi
Beira Nacala Durban
Crucial issues regarding port choice
N=26 Responses%
Port infrastructure and equipment15 57.
7
Transit time and regulations10 38.
5
Customer service delivery9 34.
6
Distance to inland destination7 26.
9
Cost of inland haulage17 65.
4
Availability of both rail and road3 11.
5
Vessel capacity calling port7 26.
9Port channel depth 1 3.8
Security8 30.
8
61 | P a g e
Port infra
structu
re an
d equipmen
t
Transit
time and re
gulati
ons
Customer
servic
e deli
very
Distance
to inlan
d destinati
on
Cost of in
land hau
lage
Availab
ility o
f both ra
il and ro
ad
Vessel c
apaci
ty cal
ling p
ort
Port chan
nel dep
th
Security
02468
1012141618
Crucial issues regarding port choiceRe
spon
ses
For Malawi to reduce cost of Importation/Exportation
N=26 Responses %
Develop and construct own inland port18 69.
2Explore and develop Quelimane port 2 7.7
Improve capacity of Nacala corridor13 50.
0Improve capacity of Northern corridor via Dar es Salaam
5 19.2
Build rail connection to Beira port8 30.
8
Improve the road network to Beira5 19.
2
62 | P a g e
Critical supply chain obstacles
N=26 Reponses %
Long distances 8 30.8High haulage costs 19 73.1Port storage charges 6 23.1Customs red tapes 5 19.2Corruption 2 7.7Inadequate climate control equipment 2 7.7Dependency on third-party country ports 15 57.7Unstable economy 5 19.2High handling costs 3 11.5Fragile foreign relations with neighboring countries 4 15.4
User perception of ports
Very good Good Bad
Worse
No rating
Dar es Salaam 2 20 4 Nacala 3 12 9 2 Beira 12 10 4 Durban 11 12 1 2Coega 12 14
Very good Good Bad
Worse
No rating
Dar es Salaam 7.7 76.9 15.4 0.0 0.0Nacala 11.5 46.2 34.6 7.7 0.0Beira 46.2 38.5 15.4 0.0 0.0Durban 42.3 46.2 3.8 0.0 7.7Coega 0.0 46.2 0.0 0.0 53.8
63 | P a g e
Very good Good Bad Worse No rating0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
User perception of ports
Dar es SalaamNacalaBeiraDurbanCoega
Port Major reasons
Dar es salaamPort handles a lot goods due to its good infrastructure, however high transportation costs to Malawi
Nacala Efficient communication, however too much congestion
BeiraFaster delivery of cargo to Malawi, efficient communication, good port infrastructure, however costs are still high
DurbanEfficient in transshipment of cargo to Beira or Nacala, Good port infrastructure, good road network, however very high transportation costs
CoegaUsed in transshipment of cargo to Beira or Nacala, however Malawi rarely use this port
Perception on the proposed Nsanje World inland port
N %
Worth pursuing and developing21 80.8
Not worth pursuing 4 15.4
Not sure 1 3.8
Total (N)26 100.0
64 | P a g e
Worth pursuing and developing
Not worth pursuing Not sure Total (N)0.0
10.020.030.040.050.060.070.080.090.0
100.080.8
15.43.8
100.0
Perception on Nsanje World Inland Port
Critical reasons to develop Nsanje port
N=21 Responses
%
Reduction of Import costs 15 71.4
National Pride 6 28.6Reduce over dependency on third-party country ports 12 57.1
Control over own imports/exports 8 38.1
Job creation 9 42.9
Geographically well positioned 2 9.5
Opening up to the international markets 5 23.8
Reduction of distance to open sea 8 38.1
65 | P a g e
15
6
12
8 9
25
8
Critical reasons to develop Nsanje port
Potential challenges facing Nsanje Inland port
N=26 Responses
%
Unknown port user demand 3 11.5
Potential for diplomatic rift with neighboring Mozambique 8 30.8
Lack of feasibility study 18 69.2
Channel capacity restrictions 8 30.8
Inconsistent water levels 9 34.6
Environmental concerns 5 19.2Distance from Nsanje to Major cities does not help reducing costs 4 15.4
Lack of Interest from financing partners 5 19.2
Drain on financial resources 1 3.8
Not sure 2 7.7
Perception of Quelimane port in Mozambique
N %
Worth exploring and developing 10 38.5
Not worth exploring 9 34.6
Not sure 7 26.9
Total (N) 26 100.0
66 | P a g e
Worth exploring and developing
Not worth exploring
Not sure Total (N)0.0
10.020.030.040.050.060.070.080.090.0
100.0
Perception of Quelimane Port in Mozambique
Reasons to Develop Quelimane port
N=10 Responses
%
Shortest possible distance to the open sea 7 70
Already has developed port 2 20
Has interest from neighboring countries 1 10
Don’t know anything on Quelimane port 1 10
Shortest possible distance to the
open sea
Already has de-veloped port
Has interest from neighboring coun-
tries
Don’t know any-thing on Quelimane
port
0
1
2
3
4
5
6
7
8
Reasons to develop port Quelimane
67 | P a g e
Reasons not to develop Quelimane port
N=9 Responses
%
Just develop our own port with the same resources 4 44.4
Will not create jobs for Malawi 3 33.3
Improve existing port already in use 4 44.4
Don’t know much about Quelimane port 2 22.2
The best option for Malawi
N=26 Responses
%
Explore and develop new options 17 65.4
Rehabilitate existing options 10 38.5
Improve relations with neighboring countries 5 19.2
Reduce logistical red tapes 4 15.4
68 | P a g e
SURVEY FINDINGS
As highlighted, the objectives of this research were to assess user perception and
knowledge of the ports being used by landlocked Malawi, assess the efficiency
parameters of from the various current ports, assess impact of distance on inland
haulage costs to final destinations in Malawi and to provide recommendations on viable
port options with quantifiable data and measurable targets that may be harnessed and
developed as first port of choice by landlocked Malawi. Of course it is important to
mention that sometimes despite having knowledge of the various problems associated
with certain ports, the users have no choice due to the lack of other viable options and
have to make do with existing options.
Respondents Attributes
From the analysis, most of the respondents have adequate and considerable
experience in shipping, clearing and forwarding, supply chain and logistics hence have
a good understanding of the subject matter. 26.9% of the respondents are experts in the
field of shipping and supply chain whilst 61.5% of the respondents are proficient in
shipping and logistics. 38.5% reported to have expert knowledge on the ports currently
being used by Malawi and 34.6% reported to have expert knowledge on ports in
countries surrounding Malawi. This therefore provides an assurance of thought-through
responses provided by the respondents.
69 | P a g e
User Perception of the ports in use
With regard to user perception, 84.6% respondents selected Beira port as the most
efficient port mainly due to good port infrastructure, short transit time and distance to
inland destinations. Other issues which respondents felt Beira port is better than other
ports were vessel capacity calling port, good customer service and high security. 11.5%
of the respondents chose Durban port especially with regard to efficient transshipment
of containers from Durban into Nacala and Beira. Nacala port scored 3.8% in terms of
user perception and preference.
With regard to port choice, 17 responses out of 26 representing 65.4% reported that the
primary factor for choice of port is cost of inland haulage, 15 responses out 26
representing 57.7% reported that port infrastructure and equipment were the
determining factor for port choice, 10 responses out of 26 representing 38.5% reported
that transit time and favourable regulations are key determinants for port selection. 9 out
of 26 respondents representing 34.6% felt customer service delivery is critical when it
comes to choice of port, 8 out of 26 representing 30.8% opted for security as a key
factor, 7 out of 26 respondents representing 26.9% opted for port capacity in terms of
handling vessels, another 7 out 26 representing 26.9% chose distance to inland
destinations as a key factor in determining port selection for their imports or exports as it
has a direct impact on inland haulage cost. Beira was cited for efficient communication,
faster delivery of cargoes besides huge on-carriage costs to Malawi, Nacala was cited
for efficient communication but too much congestion as the drawback, Dar es Salaam
was cited for good infrastructure but too congested and huge on-carriage cost due to
the distances involved. Durban port was cited a s efficient in transshipping cargo, good
70 | P a g e
road network but huge on-carriage costs to malawi was a major dissuading factor for
Malawi imports and exports and Coega Port was cited for efficient transshipment of
cargoes but rarely used by Malawi imports and exports. The user perception test simply
is an indicator of preference but also due traditional usage of the port, most of the users
have not had the opportunity to test in practical sense all available options and come up
with an informed decision. Sometimes the port preference is dictated by consignees
hence shippers have to simply follow. Fear of the unknown also prevents most users
from trying new options.
Reduction of cost of importation and exportation
With regard to proposals for Malawi to reduce of cost of importation and exportation, 18
responses out of 26 representing 69.2% support the development and construction of
Malawi’s own inland port, 13 responses out of 26 representing 50% favour the
upgrading and improvement of the existing rail link between Nacala and Malawi, 8 out
26 respondents representing 30.8% propose the connecting the Malawi rail link to the
existing Sena rail link which goes to Beira port to provide competition with road traffic. 5
out of 26 respondents representing 19.2% support the idea of improving the road
infrastructure to Beira Port whilst a similar number of 5 out of 26 support the idea of
improving the northern corridor to Dar es Salaam Port.
Development of Nsanje Inland Port (Shire-Zambezi Waterway)
21 respondents representing 80.8% support the proposal for Malawi to construct its own
inland waterway port in Nsanje, 4 respondents representing 15.4% reported that the
71 | P a g e
Inland waterway project was not worth pursuing, whilst 1 respondent representing 3.8%
was not sure about either way.
15 respondents, thus 71.4% reported that Nsanje Port should be developed to reduce
import costs, 12 respondents, thus 57.1% think that Nsanje Port should be developed to
reduce over dependency of ports in other countries, 9 respondents representing 42.9%
favoured the Nsanje Port project as it will lead to job creation in Malawi. 8 responses,
thus 38.1% think by developing Nsanje Port, Malawi will effectively reduce distance to
the open sea and consequently costs. Another 8 respondents reported that Malawi will
have control over its imports and exports if it develops its own inland port. 6
respondents representing 28.6% reported that Nsanje Port should be developed for
national pride. Most respondents have shown preference for construction of own port
largely based on thinking that own port is the solution to the myriad operational
problems being encountered, very few have seriously considered the technicalities
involved in opening up of own port and viability of the same. This is largely due to the
information that was provided by the Malawi government at the time it was launching
the Nsanje Inland waterway project that the development was going to save 60% of
inland haulage costs. The information however was vague on capacity of vessels that
would sail in the waterway considering the geographical challenges, the haulage
mechanism s from Nsanje to the commercial centres of Blantyre and Lilongwe at
distances of 160km and 460km respectively. Certainly handling costs due to multiple
transshipments is another issue that was not being considered by respondents in opting
for development of own inland port and the issue of economic viability where Malawi
seasonal imports and exports do not necessarily warrant operation of own port So the
72 | P a g e
feedback from the respondents might be inconclusive and misleading if read in the
context provided.
With regard to potential challenges that could hinder development of Nsanje Waterway
Project, 18 respondents representing 69.2% acknowledge that lack of feasibility study
could derail the whole project, 9 respondents representing 34.6% reported that
inconsistent water levels in the Shire-Zambezi river channels would make the project
not viable, 8 respondents representing 30.8% have doubts over the river channel
capacity with regard to handling commercial cargo vessel channel and water depth
requirements, another 8 respondents representing 30.8% of the sample size fear that
the diplomatic rift between Malawi and Mozambique over Malawi’s insistence to open
the waterway could key to blocking development of the waterway project., 5
respondents representing 19.2% reported that environmental concerns to the Shire-
Zambezi waterway with regard to ecosystem and catchment area benefits from the
water sources would be a stumbling block to realization of the project.
User perception of Quelimane Port in Mozambique
10 respondents representing 38.5% of the sample size reported that it was worth
exploring and developing Quelimane Port corridor, 9 respondents representing 34.6%
reported that Quelimane port was not worth exploring, 7 respondents representing
26.9% were not sure of either option. 7 respondents felt that Quelimane Port provides
the shortest possible distance from Malawi to the open sea hence need for serious
exploration, 2 respondents representing 20% favoured development and exploration of
Quelimane Port corridor due to the fact that it is already a developed port. On the other
73 | P a g e
hand 4 respondents representing 44.4% think there is no reason for developing
Quelimane Port corridor rather Malawi should just develop its own inland port, 3
respondents representing 33.3% thinks Quelimane should not be explored because it
will not create jobs for Malawians, another 4 representing 44.4% thin the solution lies in
developing existing options. Most respondents indicated not to have adequate
knowledge on this port, since Malawi is rarely using this port due to the absence of a
road network from Quelimane to Muloza Border in Malawi. This option presents an
exciting opportunity for Malawi as it is only 300km from the commercial city of Blantyre
and economically contributes to lowering transit times and inland haulage costs if an
agreement could be reached with Mozambique, which also has considerable interest in
upgrading this port.
Overall best option for Malawi
In this regard, 17 respondents suggests that Malawi should consider exploration of new
options to complement the existing options, 10 respondents think that Malawi should
rehabilitate the rail and road networks to improve performance of existing options, 5
respondents representing 19.2% thinks that the solution to the challenges lies in Malawi
normalizing its diplomatic relations with neighbouring countries especially Mozambique
and Tanzania so that bilateral agreements aimed at easing the various supply chain
obstacles may be drawn and agreed upon. 4 respondents representing 15.4% reported
that Malawi should work to remove the various logistical red tapes by government
agencies at the border posts e.g. Customs and Malawi Bureau of Standards.
74 | P a g e
Critical Supply Chain Obstacles
19 respondents representing 73.1% reported that the biggest obstacle to Malawi’s
supply chain operation is huge inland haulage costs, 15 respondents representing
57.7% cited dependency of third party country ports as a major obstacle, 8 respondents
representing 30.8% cited long distances from the ports to Malawi’s inland destinations
as critical obstacles, 6 respondents representing 23.1% cited the problem of port
storages levied in the ports of discharge as single most critical obstacle to supply chain,
5 respondents representing 19.2% cited customs procedures as being hindrances to
efficient supply chain performance, another 5 respondents cited malawi unstable
economy as the most critical obstacle, other obstacles were high handling costs at
11.5%, fragile diplomatic relations with neighbouring countries at 15.4%.
75 | P a g e
CONCLUSION AND RECOMMENDATIONS
From the foregoing, high inland haulage costs and long distances are the major
challenges affecting supply chain operations and performance in Malawi. Basically this
confirms one of the research objectives in finding impact of distance on cost. Whilst
most Malawians are in favour of developing an own inland port to counter the problem
of distance and hug on-carriage costs, it is evident that the fears of challenges that will
derail realization of an own inland port are real and founded especially with the absence
of a feasibility study and at most cooperation of neighbouring Mozambique through
which most of the waterway crisscrosses to the Indian ocean. A number of respondents
agree to explore the possibility of connecting to Quelimane port on the basis of short
distances provided. Whilst the existing developed ports do not offer any reduced on-
carriage or inland haulage costs, the only real short distances to Malawi are offered by
Nsanje Waterway project and Quelimane Port. A second feasible option is to connect
the Malawi rail link to the Sena rail link which connects to Beira port as this will provide
direct competition to road haulage and facilitate bringing down of costs. Dar es Salaam,
Durban and Coega may not in any way offer any incentives for reduced costs due to the
long distances involved. Malawi’s lifeline is Mozambique and should ensure that
diplomatic relations are restored to its best so that Malawi should benefit from all the
suggested options of either developing the waterway or developing a road network to
the existing Port of Quelimane. The Malawi government should conduct a feasibility
study on the viability of Quelimane Port corridor and compare with viability of Nsanje
Inland waterway so as to embark on a meaningful cost reduction exercise and initiative
void of political connotations. Due to the distances offered by Quelimane, transit times
76 | P a g e
and inland haulage costs will be considerable reduced and could become a gateway for
Malawi.
The existing Nacala railway link should also be rehabilitated to increase its capacity
especially during the rainy season so as to complement the existing other options.
The Ministry of Trade and Finance in Malawi should also seriously review the non-tariff
barriers at the various border entry points especially Mwanza and Dedza border posts
to eliminate unnecessary delays which results in fines and penalties. At the same time
these two line Ministries should engage their Mozambican counterparts to review and
ease some challenges faced by Malawi imports and exports e.g. port storages but also
to reduce the amount of time taken to process transit clearance documents in
Mozambican customs.
77 | P a g e
REFERENCES
1. 2008 population and housing census, available from< http://www.nsomalawi.mw/>
accessed on 22nd October 2014.
2. Malawi Economic Outlook, 2013, available from
http://www.afdb.org/en/countries/southern-africa/malawi/malawi-economic-outlook/
3. Yin, R. (2010). Qualitative research from start to finish (1st ed., p. 6). Guilford Press
4. Michael L. Faye, John W. McArthur, Jeffrey D. Sachs, Thomas Snow (2004) 'The
Challenges Facing Landlocked Developing Countries', Journal of Human
Development, Volume 5(issue 1), pp. 6.
5. World Bank (2008) A report for the mid-term review - Improving Trade and Transport
for Landlocked Developing Countries - World Bank contributions to implementing the
Almaty Programme of Action, Washington: Office of the Publisher, The World Bank.
6. United Nations Conference on Trade and Development (2013) The Way to the
Ocean - Transit corridors servicing the trade of landlocked developing countries,
Geneva: UNCTAD.
7. African Trade Policy Centre (2010) The Development of Trade Transit Corridors in
Africa’s Landlocked Countries, Addis Ababa: Economic Commission for Africa.
8. Matenje, S. 2008, High level plenary meeting on the mid-term review of the Almaty
programme of action for landlocked countries: General Assembly United Nations,
New York, pp. 3.
78 | P a g e
9. Grosdidier de Matons, J. (2007) Facilitation of Transport and Trade in Africa: "A
Review of International Legal Instruments, Treaties, Conventions, Protocols,
Decisions, Directives” SSATP Working Paper No. 73, 3, pp. 88.
10.Mehler, A. Melber, H. Walraven, K. (2011) Africa Yearbook - Politics, Economy and
Society South of the Sahara, Volume 8 edn., Boston: Brill.
11.Robinson, B. Wakeford, J. (2013) Oil Shock Vulnerabilities & Impacts: Case Study
of Malawi. United Kingdom Department for International Development.
http://r4d.dfid.gov.uk/Output/193546/ (accessed: 23rd February 2015).
12.African Development Bank (2010) Connecting Ports to the Markets, Tunis: African
Development Bank
13.Unknown (2010) 'Mozambique and Malawi disagree over use of Zambezi',
Mozambique News Agency (AIM Reports), 2nd November, p. 1.
14.Lalbahadur, A. (2013) 'Mozambique and Malawi: Recalibrating a Difficult
Relationship’ SAIIA POLICY BRIEFING 68. p. 3.
15.Bertelsmann Stiftung, BTI 2012 — Malawi Country Report. Gütersloh: Bertelsmann
Stiftung, 2012.
16. International Monetary Fund, (2012). IMF Country Report. Malawi: Joint Staff
Advisory Note of the Poverty Reduction Strategy Paper. Washington DC: IMF, p.8.
17.The African Trade & Transport Report (2011), Focus: Nsanje Port Malawi, (Issue 7),
p.14.
18.The Epoch times, (2012). Dream fades for Inland Port project. p.16.
19.Concerns and demands, 2011, “ Poor Economic and Democratic governance in
Malawi”, Civil Society, 2011
79 | P a g e
20.Murithi. A, Mintz. S, Sarguene. F, Mendonça. C, (2012) Technical Report: Logistics
Review of the Beira and Nacala Corridors. p. 9. Gaborone: USAID.
21.Mozambique Ports and Railways (CFM) Report, Date unknown.
22.USAID, (2010): Nacala Corridor Assessment: Strategy-Based Transport Logistics
and Supply Chain Efficiency.
23.Harding. A, (2009): Review of the Effectiveness of Port and Port Terminal
Concessions, p.21, Gaborone: USAID.
24.Port of Beira, (2013); Profile Directory
25.Foster, V and Briceño-Garmendia, C. (2010) Africa’s Infrastructure: A Time for
Transformation. Washington: The International Bank for Reconstruction and
Development / the World Bank.
26. SDV report, undated. Accessed from: http://www.afritramp.eu/UserFiles/File/PORT
%20INFORMATION%20NACALA(1).pdf
27.LBH South Africa. (2015) Nacala. http://lbhsouthafrica.com/portfolio/nacala/
(accessed: 14th March 2015).
28.Koopmann K. (2013) Mozambique Port of Quelimane.
http://dlca.logcluster.org/display/public/DLCA/2.1 .4+Mozambique+Port+of+Quelima
ne (accessed: 14th March 2015).
29.Japan International Cooperation Agency. (2009) the Research on the Cross‐Border
Transport Infrastructure: Phase 3. Tokyo: JICA.
30.Kgare, T, Raballand, G., and Ittmann, T. (2011) Cargo Dwell Time in Durban:
Lessons for Sub-Saharan African Ports. Washington: World Bank
80 | P a g e
31.Rodrigue, J, Cooper, J., and Merk, O. (2013) the Competitiveness of Ports in
Emerging Markets: the Case of Durban, South Africa. Paris: International Transport
Forum.
32.Blonigen, B and Wilson, W. (2006) Port Efficiency and Trade Flows. Paper
Presented Oregon: University of Oregon.
33.World Bank. (2007) Port Reform Toolkit Second Edition: The Evolution of Ports in a
Competitive World. Washington: The International Bank for Reconstruction and
Development / the World Bank.
34.FoodRisc Resource Centre. (2015) Mixed methods research: What is it?
http://resourcecentre.foodrisc.org/mixed-methods-r esearch_185.html (accessed:
15th March 2015)
35.Mossy M. (2015) the Advantages and Disadvantages of Mixed Methodology
Research. http://classroom.synonym.com/advantages-disadvanta ges-mixed-
methodology-research-4263.html (accessed: 15th March 2015).
36.Malina, M, Nørreklit H, and Selto, F. (2010) Lessons Learned: Advantages and
Disadvantages of Mixed Method Research. Http://papers.ssrn.com/sol3/papers.cfm?
abstract_id =1826304.
37.TradeMark Southern Africa. (2014) Elimination of Non-Tariff Barriers to Trade.
http://www.trademarksa.org/our_work/trade_facilitation/ntb (accessed: 06th April
2015).
38.Jones, M. (2011) Malawi, End to End. The Full Story. 20 March 2011
http://www.design-edge.co.uk/mwe2e/story.html (accessed: 6th April 2015).
81 | P a g e
39.Japan International Cooperation Agency. (2013) Signing of Japanese ODA Loan
Agreement with the Republic of Mozambique –Contributing to economic
development in southern Africa through rehabilitating the port of Nacala–.
http://www.jica.go.jp/english/news/press/2012/1303 07_01.html (accessed: 6th April
2015).
40.U.S. Department of Commerce. (2015) Trade in Goods with Malawi.
https://www.census.gov/foreign-trade/balance/c7970 .html (accessed: 7th April
2015).
41.Malawi Investment and Trade Centre. (2011) FOREIGN TRADE.
http://www.mitc.mw/index.php?Itemid=568 (accessed: 7th April 2015).
42.UNECA (2009) The Transport Situation in Africa. Addis Ababa:
Http://www1.uneca.org/Portals/ctrci/6th/TransportSituation-inAfrica.pdf (accessed:
7th April 2015).
43.Kirshenblatt-Gimblett, B. (2006) Performance Studies Methods Course syllabus:
What Is Research Design? The Context of Design. In: New York University.
Washington: Https://www.nyu.edu/classes/bkg/methods/.
44.David, M and Sutton, C. (2011) Social Research, an Introduction. 2nd ed. London:
SAGE Publications.
45.Vaus, D. (2001) Research Design in Social Research. London: Sage Publications.
46.Creswell, J and Plano Clark, V. (2007) Designing and Conducting Mixed Methods
Research. 2nd ed. London: SAGE Publications.
47.Kothari, C. (2004) Research Methodology: Methods and Techniques. 2nd ed. New
Delhi: New Age International Publishers.
82 | P a g e
48.Dunne, J. (2015) ‘Order at sea’ and landlocked countries in Africa.
http://www.sipri.org/media/blogs/eps-blog/order-at -sea-landlocked-countries-in-
Africa (accessed: 11th April 2015).
49.Snow, T, Faye, M., McArthur, J., and Sachs, J. (2003) Country Case Studies on the
Challenges Facing Landlocked Developing Countries. New York: United Nations
Development Programme.
50.Kurz, S and Chandra Acharya, G. (2014) we must recognise the special needs of
landlocked developing countries. The Guardian. 2 November 2014 p.
Http://www.theguardian.com.
51.Arvis, J, Raballand, G., and Marteau, J. (2010) the Cost of Being Landlocked
Logistics Costs and Supply Chain Reliability. Washington:
Https://openknowledge.worldbank.org
52.UNCTAD Secretariat. (2013) Review of Maritime Transport 2013. New York and
Geneva: United Nations.
53.Lahiri, B and Masjidi, F. (2012) Landlocked Countries: A Way to Integrate with
Coastal Economies. Journal of Economic Integration. 27 (4): p. 506. http://www.e-
jei.org/upload/JEI_27_4_505_519_714.pdf (accessed: 11th April 2015).
54.The World Bank. (2004) Malawi Trade and Transport Facilitation Audit. Lilongwe:
World Bank.
55.United Nations Economic and Social Council. (2002) Landlocked Countries:
Opportunities, Challenges, Recommendations. Geneva: United Nations.
56.United Nations Information Service. (2015) Landlocked Developing Countries.
http://www.unis.unvienna.org/unis/en/topics/lldc.html (accessed: 13th April 2015).
83 | P a g e
57.United Nations Armenia. (2014) Landlocked Developing Countries (LLDCs).
http://www.un.am/en/news (accessed: 13th April 2015).
58.Tashakkori, A. and Teddlie, C. (2010) Putting the Human Back in ‘‘Human Research
Methodology’’: the Researcher in Mixed Methods Research. London: SAGE
Publications.
59.Johnson-Burke, R. (2014) Mixed Methods Research Design and Analysis with
validity: A Primer. 3rd ed. SAGE Publications.
60.Transnet National Ports Authority. (2014) Port of Ngqura.
http://www.transnetnationalportsauthority.net/ (accessed: 14th April 2015).
61.Brasca, F. (2012) Containerization’s Benefits Can’t Be Contained. Inbound
Logistics.Http://www.inboundlogistics.com/cms/article/containerizations-benefits-
cant-be-contained/.
84 | P a g e
APPENDICES
Data Collection Questionnaire
MSc Supply Chain Management - Data Collection Questionnaire
Dissertation Project – A Comparative Study on the sea ports that serve landlocked Malawi including Nsanje Inland Port with regard to cost reduction and elimination of supply chain obstacles
Research Student: Frank G. Chirwa
Supervisor (s): Owen Jones – University of Bolton
Peter Chiligo – Malawi Institute of Management
85 | P a g e
Section A
Respondent Professional Background
1. Importing/Exporting2. Academic3. Clearing and Freight Forwarding4. Customs5. Port Operations6. Shipping Line 7. Trade and Policy8. Logistics and Supply Chain
Other profession, please specify in the space provided.
1. No of Years in the Profession1. 0 – 32. 4 – 73. 8 – 104. 11 and above
2. Knowledge of Import and Export Logistics1. Basic2. Intermediate3. Proficient4. Expert
3. Knowledge of Port Operations1. Basic2. Intermediate3. Proficient4. Expert
4. Knowledge of ports being currently used by Malawi1. Basic2. Intermediate3. Proficient4. Expert
86 | P a g e
5. Knowledge of all ports in the countries surrounding Malawi1. Basic2. Intermediate3. Proficient4. Expert
Section B
6. Which is the most efficient port that serves Malawi?1. Beira2. Nacala3. Dar es Salaam4. Durban5. Coega6. No port is efficient
B. What are the key factors that make this port most efficient?
1. Good port infrastructure and equipment2. Shorter transit time and favorable regulations3. Good customer Service Delivery4. Shorter distance to inland destinations5. Lower cost of Inland haulage6. Availability of both rail and road7. Vessel capacity calling port8. Port Channel depth9. High security
Please add any additional information in the space provided
7. Of the below issues, which are most crucial, with regard to port choice?1. Port infrastructure and equipment2. Transit time and regulations3. Customer Service Delivery4. Distance to inland destinations5. Cost of Inland haulage6. Availability of both rail and road
87 | P a g e
7. Vessel capacity calling port8. Port Channel depth9. Security
Please add any additional information in the space provided
8. If Malawi has to reduce cost of importation/exportation, it has to;1. Develop and construct own inland port2. Explore and develop Quelimane Port3. Improve capacity of Nacala Corridor4. Improve capacity of Northern Corridor via Dar es Salaam5. Build rail connection to Beira Port6. Improve the road network to Beira7. Move cargo by truck from Durban and Coega
Please add any additional information in the space provided
9. Critical Supply Chain obstacles1. Long Distances2. High haulage costs3. Port storage charges4. Customs red tapes5. Corruption6. Inadequate climate control equipment (Short-shelf cargoes)7. Dependency on third-party country ports8. Unstable economy9. High handling costs10. Fragile foreign relations with neighboring countries
Please add any additional information in the space provided
88 | P a g e
Section C
10. User Perception of Dar es Salaam Port1. Very Good2. Good3. Bad4. Worse5. No rating
Please add any additional information in the space provided
11. User Perception of Nacala Port1. Very Good2. Good3. Bad4. Worse5. No Rating
Please add any additional information in the space provided
12. User Perception of Beira Port1. Very Good2. Good3. Bad4. Worse5. No Rating
Add any additional information in the space provided
89 | P a g e
13. User Perception of Durban Port1. Very Good2. Good3. Bad4. Worse5. No rating
Please include any additional information in the space provided
14. User Perception of Coega Port1. Very Good2. Good3. Bad4. Worse5. No rating
Please include any additional information in the space provided
Section D
15. Perception of the proposed Nsanje World Inland Port1. Worth pursuing and developing2. Not worth pursuing (should be abandoned)______Skip to 173. Not sure
Please add any additional information in the space provided
90 | P a g e
16. Critical reasons to develop Nsanje Inland Port1. Reduction of import costs2. National pride3. Reduced over-dependency on third-party country ports4. Control over own imports/exports5. Job creation6. Geographically well positioned7. Opening up to the international markets8. Reduction of distances to open sea9. Not sure
Please include any additional information in the space provided
17. Potential Challenges facing Nsanje Inland Port1. Unknown port user demand2. Potential for diplomatic rift with neighboring Mozambique3. Lack of feasibility study4. Channel capacity restrictions5. Inconsistent water levels6. Environmental concerns7. Distance from Nsanje to Major cities does not help reducing costs8. Lack of interest from financing partners9. Drain on financial resources10. Not sure
Please include any additional information in the space provided
91 | P a g e
18. Perception of Port Quelimane in Mozambique1. Worth exploring and developing____________Skip to 202. Not worth exploring3. Not sure
Please include any additional information in the space provided
19. Reasons not to develop Port Quelimane1. Just develop our own port with the same resources2. Will not create jobs for Malawi3. Improve existing ports already in use4. Don’t know much about Quelimane Port
Please include any additional information in the space provided
20. Reasons to develop Port Quelimane1. Shortest possible distance to the open sea2. Already has developed port3. Has interest from neighboring Mozambique4. Don’t know anything on Quelimane Port
Please include any additional information in the space provided
92 | P a g e
21. What is the best option for Malawi?1. Explore and develop new options2. Rehabilitate existing options3. Improve relations with neighboring countries4. Reduce logistical red tapes5. Just live with status quo
Please include any additional information in the space provided
22. Any General additional information
93 | P a g e
Trade Deficit StatisticsAnnex 2 – Trade Deficit (courtesy of https://www.census.gov/foreign-trade/balance/c7970.html)
2015: U.S. trade in goods with Malawi
NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding.
Month Exports Imports Balance
January 2015 2.3 4.9 -2.6
February 2015 1.2 1.5 -0.4
TOTAL 2015 3.4 6.5 -3.0
2014: U.S. trade in goods with Malawi
NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding.
Month Exports Imports Balance
January 2014 2.6 4.5 -1.9
February 2014 18.9 2.8 16.1
March 2014 3.2 4.7 -1.4
April 2014 4.0 5.9 -2.0
May 2014 1.7 5.1 -3.5
June 2014 1.8 3.5 -1.6
July 2014 5.0 2.1 2.8
August 2014 5.7 4.1 1.6
September 2014 1.1 5.8 -4.7
October 2014 2.5 17.4 -14.9
November 2014 1.3 5.1 -3.8
December 2014 2.8 5.8 -3.1
TOTAL 2014 50.6 66.8 -16.1
94 | P a g e
2013: U.S. trade in goods with Malawi
NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding.
Month Exports Imports Balance
January 2013 2.3 4.0 -1.7
February 2013 3.0 4.5 -1.5
March 2013 1.7 3.7 -2.1
April 2013 1.8 7.0 -5.2
May 2013 4.0 4.4 -0.4
June 2013 13.9 4.7 9.2
July 2013 3.8 3.8 -0.0
August 2013 7.8 6.6 1.3
September 2013 3.7 2.7 0.9
October 2013 6.3 9.4 -3.1
November 2013 3.8 15.2 -11.4
December 2013 2.4 7.1 -4.7
TOTAL 2013 54.5 73.1 -18.6
95 | P a g e