The season of tea, which is one of the most popular beverages in the world, is upon us, with East African countries accounting for 94% of all African tea exports by value
Tea plays a key role in the East African economy. Kenya is the second largest exporter of tea globally (after China). In Kenya, tea accounts for almost 18% of all its exports by value, while in Burundi, tea also accounts for a significant figure of its exports at 19%. In Rwanda, it accounts for 15% of all its exports by value and is one of the country’s main export crops. The tea supply chain typically consists of activities such as growing, picking, withering, rolling, fermenting, drying, blending and packaging. For a company providing transportation and insurance services, such as MSC Mediterranean Shipping Company, the tea production supply chain in Africa presents an economic avenue that can be tapped into.
According to Statista, the revenue which Uganda received from tea exports in the year 2022 is estimated to be at US$ 134.1mn. If we analyse this revenue in relation to Uganda’s population figures, we get a revenue of US$2.77 per person. This indicates that the tea industry in Uganda generates a considerable amount of income to its overall Gross Domestic Product (GDP) and GDP per capita. According to the same source, the tea market is expected to grow with a volume of 9.4% in 2023. Kenya received US$109mn from its tea exports. Although the East African country received low tea export revenue compared to Uganda in 2022, it is still considered as one of the main tea exporters globally, after China and Sri Lanka.
The domestic consumption of tea in East Africa is also considerably high and it contributes to the tea production sector outside of exports, making it a pivotal industry with the potential to generate even more income and reduce unemployment. There are various activities that occur at moving tea leaves from a field and into the cup of tea lovers. Transportation is central to ensuring timeous and smooth deliveries. The movement of tea products from one location to another has an impact on the profitability or success of the entire sector. Decisions surrounding raw materials, production amounts, inventory levels, distribution network configuration and shipping or receiving transportation all depend on the reliability of available transportation service providers.
MSC, with its global rail, road and sea transport network that enables offering sustainable and reliable door-to-door services, is better positioned to enhance transportation in the Kenyan and Ugandan tea production sector. The company can add value at almost every point in the tea production supply chain as follows. The tea production supply chain relies on functional transportation and logistics networks for its success. In order to reach full capacity utilisation, participants in the tea production supply chain need a reliable intermodal transport services provision partner, a role which can be strategically fulfilled by MSC through its provision of shipping, inland and air cargo solutions which are all ideal in the delicate transportation of tea. MSC ships of an African network of local agencies in more than 40 countries, global port coverage, and integrated road and rail transport solutions. The shipping company is already the supply chain partner of choice for importers and exporters in Africa.
Additionally, MSC provides the kind of service within the tea production supply chain that is considerate of the risks. Tea is a sensitive product which can have its essential aromatic features distorted during its transportation or handling. This applies from warehouse to warehouse and anything in between to and from almost anywhere in Africa with managed restrictions as to the nature of the cargo.