Cargo transport fees to increase

Feb 09, 2012

Clearing and forwarding firms have warned of possible hikes in cargo clearing and transporting hikes, predicting that the congestion at Mombasa could stretch to April.

By Samuel Sanya and Brenda Asiimwe

Clearing and forwarding firms have warned of possible hikes in cargo clearing and transporting hikes, predicting that the congestion at Mombasa could stretch to April.

“An interruption in the Kenya Ports Authority and the Kenya Revenue Authority computer systems and a larger-than usual importation of sugar into the region caused the current congestion at the port,” Musa Simwogerere, the Spedag Interfreight operations manager, said at a recent meeting with Vision Group executives.

“Sugar imports that were contributing to the congestion have reduced. However, transport costs have gone up at the same time,” Simwogerere added.

A recent notice from the Kenya Ports Authority (KPA) showed that the port was holding over 20,000 containers destined for the region, with some 5,928 pieces currently undocumented.

It now takes 30 days for cargo to move from Mombasa to Kampala by road, up from the previous 16 days. Ships are taking at least five more days to offload cargo compared to previous months.

During the meeting, Robert Kabushenga, the Vision Group boss, urged the freight company to consider re-routing cargo destined for Uganda through Tanzania or South Africa along the existing railway lines in the Eastern and Southern Africa regions.

As direct result of the delays, shipping companies have imposed a $250 (about sh0.5m) surcharge per container. “There is need for the port authority to always consult the stakeholders because the direct impact of the all the decisions made is felt by the importing firms and consumers,” Charles Kareeba, the Uganda Shippers Council chairman, said.

He added that the council was negotiating with port authorities to reach an understanding over the issue.

“We are in the East African Community, implying that all member states should consider how the decisions they make will affect the sister states.

“For Kenya to increase the tariffs on cargo without any considerations causes a crack in the relationship,” said Sebaggala Kigozi, the Uganda Manufacturers Association executive director.

He added that any increase in charges, no matter how small, would cause a great impact on businesses and projects in the affected countries.

Kigozi explained that there was need for dialogue to find a lasting solution to the situation as tariff increases can result in huge foreign exchange outflows and hurt the economy.

The Kenya Port Authority recently announced a general waiver of storage charges for all containers at the port by March 1, warning that uncollected long-stay containers would be destroyed after the deadline.

However, Kareeba pointed out that the period is insufficient.

Haji Masemo, the KPA spokesperson, said there were currently over 100 containers destined for Uganda at the port and blamed freight firms for delays in evacuating the cargo.

“The port allows people to clear their cargo early enough. If they did as required, service delivery would be swift and there would no complaints of delays,” Masemo noted.

“For several weeks now, Mombasa port has experienced hiccups in cargo clearing, leading to congestion. I am glad that after thorough consultations among stakeholders, some possible solutions have been agreed upon,” said Amos Kimunya, the Kenyan minister for transport, in a statement at the launch of the Rapid Results Initiative.

He said the initiative has led to the creation of an inter-ministerial team with clear targets as the port moves to clear the backlog through the 24-hour operations.

As part of the initiative, clearing firms are supposed to ferry out cargo within 48 hours upon delivery at the port.

The Rift Valley Railways and Kenya Railways Corporation are working together to provide about 200 wagons and three trains to bolster daily cargo evacuation endeavours.

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