Hapag-Lloyd Intensifies Competition in East Africa With New Service

Port of Mombasa (UK DFID)

Published May 25, 2021 11:03 PM by The Maritime Executive

East Africa is set to witness increase in competition among shipping lines following the entry of German’s Hapag-Lloyd into the region. Hapag-Lloyd container cargo MV Northern Valence made a maiden call at the port of Mombasa on Saturday before proceeding to the port of Dar es Salaam, the two ports the company intends to serve with its new East Africa Service 3 (EAS3).

The EAS3 will offer direct weekly sailings between China, Southeast Asia, Kenya and Tanzania with competitive transit times for better connectivity between Asia and East Africa.

The target is to provide seamless connections to Hapag-Lloyd’s global network via the hub ports of Singapore, Port Klang and Shanghai by deploying seven 2,800 twenty-foot equivalent unit (TEU) vessels, including two provided by Hapag-Lloyd.

Hapag-Lloyd's entry into the region is also designed to serve landlocked countries like Uganda, Rwanda, Burundi and South Sudan with regular inland connections to and from Mombasa port. As part of its growth strategy, the shipping company will also work to develop inland connections to Somalia, Southern Ethiopia and Northern Tanzania.

The entry of Hapag-Lloyd into the region opens another front for competition among global shipping lines targeting importers and exporters in the East Africa region, including Maersk, Mediterranean Shipping Company, CMA-CGM, China Ocean Shipping Company and Evergreen, among others.

“The new service line EAS3 to the East African region and particularly our port is a testament of the confidence that Hapag-Lloyd and other shipping lines have in the port of Mombasa,” said Rashid Salim, Kenya Ports Authority acting Managing Director.

Apart from intending to capture a huge market of importers in a region that is a net importer of goods, Hapag-Lloyd intends to offer exporters of agricultural products - mainly tea, coffee and avocado, among others - competitive rates to penetrate the market.

The service comes at a time when both the Mombasa and Dar es Salaam ports are witnessing a steady increase in throughput, with both facilities handling about three million TEUs annually.

The maiden voyage of the EAS3 service comes a few months after Hapag-Lloyd opened a new office in Kenya bringing its total number of offices in Africa to five. Hapag-Lloyd entered the Sub-Saharan African market about 13 years ago and has seen steady and significant growth in transported volumes to and from Africa since then.