Relief for traders after shipping line drops port delay-related fees

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Shipping & Logistics

Relief for traders after shipping line drops port delay-related fees

A cargo ship arrives at the port of Mombasa. FILE PHOTO | NMG

Summary

  • Importers say inefficiencies and delays at the Mombasa port are increasing the cost of doing business.
  • CMA CGM introduced a port congestion surcharge in February to meet the additional costs it incurred as a result of delays.

A shipping line has suspended its port congestion surcharge it introduced last month, offering relief to traders who continue to decry inefficiencies and delays at the Mombasa facility.

CMA CGM, one of the leading shipping groups in East Africa and the third biggest worldwide container carrier, introduced the fees in February, for all cargo to and from Mombasa except that from China, to meet the additional costs it incurred as a result of delays.

The liner charged Sh5,000 per 20 feet container and Sh10,000 per 40 feet container from Mombasa to other worldwide destinations for the same kind of cargo.

For cargo from global port states to Mombasa, traders paid Sh15,000 per 20 feet container and Sh30,000 per 40 feet container.

Port stakeholders say the fee suspension will lower the cost of business but challenged Mombasa port operators to streamline operations to end congestion which has remained unresolved since the beginning of this year.

“We are happy that port congestion surcharge to all cargo which was introduced by shipping lines about a month ago has been scrapped after long discussions but the rate of cargo uptake to Nairobi and other hinterland regions remains a major issue which needs to be addressed,” said Shippers Council of Eastern Africa (SCEA) chief executive officer Gilbert Langat.

Mr Langat said an increase in vessels calling at the port from Asia against inadequate numbers of wagons using the standard gauge railway (SGR) to ferry the cargo from Mombasa to Nairobi was a major setback that has resulted in the delays.

“Despite the introduction of double stacking (rail) containers and conversion of high-sided wagons to carry containers, the problem is still not solved,” lamented Mr Langat.

The Port of Mombasa receives more than 3,400 containers a day, some 1,200 of which are hauled using the SGR.

Transport costs

Kenya Private Sector Alliance (Kepsa) public-private dialogue specialist Patrick Maingi said despite challenges reported during the Covid-19 pandemic peak last year, the Mombasa port registered increased cargo.

He added that there was a need to reduce the cost of business to compete regionally.

“The cost of transportation brought about by a number of non-tariff barriers needs to be addressed to attract more people to use Port of Mombasa and the Northern Corridor,” said Mr Maingi, adding that they will expand Kepsa Mombasa Charter participants from 23 to 50 to allow for more consultations on challenges.

Last month, transporters protested the introduction of License for Conveyance of Goods under Customs Control where they were required to pay about Sh22,000 per truck to get the licence as of February 15 this year. The Kenya Revenue Authority has however postponed the order to allow further consultations.

According to Kenya Ports Authority (KPA) data, total cargo imports increased by 212 metric tonnes from 27,558 metric tonnes in 2019 to 27,770 metric tonnes last year.

During the period, exports declined by 72 metric tonnes to 4,205 metric tonnes in 2020 from 4,277 metric tonnes a year earlier.

The port stakeholders were speaking at a forum in Mombasa held to address reforms at the port.

Other participants included officials from KRA, the Kenya Maritime Authority, Northern Corridor Transit and Transport Coordination Authority, seafarers’ associations, among others.