Traders are losing $48m in insurance and $500m in transport fees to multinational companies every year due to unfair practices in the international logistics industry, John Bosco Rusagara, the president of the Rwanda Freight Forwarders Association, has said.
Rusagara also said most importers and exporters do not understand international trade terms and modern freight management, which results into avoidable costs, delays and losses.
He noted that shipping companies have capitalised on this weakness to impose various unwarranted charges on local clearing agents and importers.
"Local business people need to join an umbrella group to benefit from the power of collective bargaining. The Private Sector Federation should also support us, especially in negotiating better terms with shipping firms in Mombasa and Dar es Salaam," he explained.
Rwanda is one of countries in the region that faces high transport costs, which are estimated at about 30 to 40 per cent of the goods imported into the country. This is about three times more compared to other regions, where it is at between five and 10 per cent.
Rusagara revealed that if importers changed from the current cost insurance freight Kigali to cost and freight Mombasa/Dar es Salaam, they would be able to appoint a shipping, clearing agent or transporter of their choice and avoid payment of container deposit and reduce transport and insurance costs tremendously.
"So, switching to cost and freight will also save foreign exchange for the country, increase market share for local companies and government revenue, as well as support the economy," he said.