Tanzania: managing risk in East Africa and key importance of shipping agents

The Port of Dar es Salaam is administered by the Tanzania Ports Authority (TPA). By contrast, vessel operations and shipping agency activities are regulated by the Tanzania Shipping Agencies Corporation (TASAC), a statutory body. 

As a matter of practice and regulatory requirements, any vessel entering a Tanzanian port must appoint a local shipping agent who acts on behalf of the vessel throughout the vessel’s stay in port. This agent is registered as the authorised representative by the TPA.

The formally appointed shipping agent plays a crucial operational role, including coordinating port formalities, facilitating cargo discharge, processing payments through the relevant port systems, liaising with the TPA and the port operators (DP World), and ultimately obtaining port clearance for the vessel’s departure.

In practice, the appointed shipping agent is integrated into the TPA operational and payment systems, meaning that the vessel’s ability to complete discharge operations and obtain sailing clearance is heavily dependent on the agent’s competence, financial capability, and cooperation. 

Also in practice, the appointed agent is rarely appointed by owners, but instead by charterers or sub-charterers, leaving owners at risk. 

While Tanzania has several TASAC-licensed shipping agents, in our opinion and according to our experience, only a limited number possess the operational capacity, financial standing, and experience necessary to efficiently handle high-capacity cargo vessels and complex operational planning.

Accordingly, there remains a significant residual risk where an appointed shipping agent may fail to properly facilitate cargo discharge or meet the financial obligations required for port operations. Based on our experience, and from information obtained directly from TASAC, shipping agency licences may be obtained with relatively limited financial thresholds, which does not necessarily reflect the operational or financial capability of the agent.

In a recent case, we assisted a ship owner in circumstances where a vessel remained stranded and unable to depart at the Port of Dar es Salaam for more than five months because, amongst other reasons, the appointed shipping agent lacked the financial capacity to facilitate discharge operations and had failed to settle various port-related charges. 

The owners were ultimately compelled to intervene directly and incur substantial additional costs to regularise the process through various court applications.

The situation became further complicated after discharge had been completed, as the shipping agent failed and/ or refused to take the necessary steps to procure port clearance, thereby delaying the vessel’s departure from the port.

In our view, the principal risk for owners lies in the appointment and reliability of the shipping agent. Given the operational control exercised by shipping agents within the port and clearance systems, owners may wish to consider either maintaining a list of vetted and trusted shipping agents who can be engaged directly whenever vessels call at Tanzanian ports, or insist on the appointment of a protective owner’s agent when calling in Tanzania.

Lana Stockton is a partner in the Cape Town office and a member of Bowmans’ Shipping and Logistics practice. Brian Mambosho is a partner in the Dar es Salaam office with extensive experience in commercial litigation. Mohammedzameen Nazarali is a Senior Associate in Dar es Salaam with extensive experience in dispute resolution, shipping, and project development.