Kenya Shippers Council is opposed to the new tarrif and clearance requirements proposed by Kenya Ports Authority (KPA) scheduled to take effect on 1st February 2012, as they will have grave financial implications for cargo owners. KPA proposes to increase the storage charges on containers cleared through the port by US$ 5 for 20Ft containers and US$ 10 for 40Ft containers. The Authority is also seeking to reduce the free storage period from five to four days inspite of the numerous delays caused by other governments agencies involved in the clearance process. In addition, remarshalling charges will be increased by US$ 10 to 110 for 20Ft containers and by US$ 15 to US$ 165 for 20Ft containers. Long Stay Containers
The directive will result in over 75% of domestic and transit cargo passing through the port having to pay remarshalling charges as well as compound congestion at the port, a situation which is already out of hand at Kilindini. Already, shipping lines have threatened to introduce a vessel delay surcharge (VDS) owing to congestion, which will get worse with the new requirements. Maersk Shipping Line announced the introduction of a Peak Season Surcharge of US$ 150/20’ and USD 300/40’ for full container load effective 1st January 2012. In the long run, the cost of importing to and exporting from Kenya and region will escalate making the region more uncompetitive. The situation might also force vessels to stop calling at the port of Mombasa, hurting traders and manufacturers.
This announcement comes at a time when the port is experiencing congestion, with transfer of containers from the port to Container Freight Stations (CFSs) taking between 8 to 12 days and uptake of cargo from the port taking between seven to eight days. This is compounded by frequent system failures of KWATOS and SIMBA 2005 run by KPA and the Revenue Authority respectively. KPA has also been in consultation with CFS operators to establish Service Level Agreements between the two parties to increase efficiency and apportion responsibilities. This process is yet to be completed.
This announcement comes at a time when transfer of containers from the port to Container Freight Stations (CFSs) is taking between 8 to 12 days and uptake of cargo from the port between seven to eight days. This is compounded by frequent system failures of KWATOS and SIMBA 2005 run by KPA and the Revenue Authority respectively. KPA has also been in consultation with CFS operators to establish Service Level Agreements between the two parties to increase efficiency and apportion responsibilities. This process is yet to be completed.
KSC is concerned with the timing of and manner in which the pronouncement was made without consultations with port stakeholders and did not take into account the current dismal performance and clearance challenges at the port. This is unlike the prevailing KPA tariff that was sufficiently negotiated with stakeholders before implementation in 2007.
KSC has proposed to meet the management of KPA jointly with the Kenya Ship Agents Association (KSAA) to ask for a withdrawal of the requirements until consultations with stakeholders are complete. The Council would further want KPA to publish a list of overstayed cargo at the port to hasten clearance.
