Tanzania’s partnership with Dubai-based logistics giant DP World is set to bring significant cost reductions at the Dar es Salaam port, including the elimination of container demurrage fees.
This move is expected to save the port approximately $600 million (Sh1.62 trillion) annually, according to Zanzibar Investment News.
Plasduce Mbossa, Director-General of the Tanzania Ports Authority (TPA), announced that the typical $1,000 fee for delayed containers at the port has been removed, thanks to DP World’s upcoming operations at the port.
The reduction in waiting times for ships has led to lower shipping costs, with charges dropping from $4,500 to $3,500 per container.
MSC was the first shipping company to eliminate these fees, aligning the shipping costs at Dar es Salaam Port with those at Mombasa Port, and putting pressure on other shipping firms to follow suit.
With the port handling 1.2 million containers annually, removing the $1,000 fee for the remainder of the year will result in substantial savings for Tanzania, which can now be redirected from foreign exchange payments.
The DP World partnership, though controversial, has shown success by reducing ship waiting times from 28 days to 10 days, improving turnaround times, and cutting costs.
Despite initial opposition from various political figures, the Catholic Church, legal experts, and human rights organizations, the government, under President Samia Suluhu Hassan, has reassured that the agreement is in the best interest of the Tanzanian people.
In October 2023, Tanzania formally signed a 30-year agreement with DP World to manage a section of the Dar es Salaam port, marking a significant step in the nation’s efforts to modernize its port operations.
