The Kenya Shippers Council (KSC) and The Kenya Association of Manufacturers (KAM) wish to register the frustration of their members following perennial congestion at the Port of Mombasa over the past four months which has in the last 10 days reached critical levels, choking business in Kenya and the region.
Consequently, ships are reported to be taking long as long as 6.1 days to berth and offload containers. Ten containers are reported to still be waiting to berth.
The delay has resulted in “artificial” shortages, causing prices of various products in the market to sky rocket, including liquefied petroleum gas (LPG). Some shipping lines have already issued notices to stop accepting any new bookings destined for Mombasa ex Europe until the crisis at the port eases.
While we oppose the introduction of the Vessel Delay Surchange (VDS) of between USD 100-150 per container, importers and exporters may not escape this surcharge by which will result in higher costs of doing business and loss of competitiveness.
This untenable and costly situation has disrupted businesses as they have not access supplies over the last 4 months due to systems failure, poor labour productivity, and cumbersome procedures by port operators. These have made it extremely difficult to move goods out of the Port to the Container Freight Stations (CFS’s). In Kenya, several companies have had to shut down factory operations for of raw materials or fuel.
KSC and KAM reckon that the problem emanates from multiple sources which compound each other. The following are suggestions for action and consideration by Port stakeholders and decision makers.
1. Improvement in Efficiency of existing capacity. Importers have long complained about the inability of the Port to offload and discharge cargo as efficiently as other ports or as per its targets. Despite its goal of 21 lifts per hour, KPA still records a dismal 5-6 lifts per hour mainly due to inefficient labour practices and inadequate equipment. Though more equipment was procured in 2011 and berths increased, delays in discharge are still experienced leading to the conclusion that the congestion originates from inefficiencies internal to the Port. These are well known and articulated regularly.
2. Improvements in off-take of cargo from the Port. Off take of cargo from the Port is delayed by various factors all within the control of agencies operating within the Port and around it.
• Off take by road is severely constrained by inadequate number of personnel. While the Port has various gates, it has not utilised all of them because of failures of other organisations responsible for cargo clearance to post sufficient staff to man all the gates or to equip them adequately once posted there. As an urgent measure, all gates should be utilised and personnel posted there, facilitated with adequate equipment.
• Off take by railway is constrained by inadequate capacity by RVR.
• Conditions of the Road at Miritini in whose vicinity most CFSs are located. Since April 2011, the road has deteriorated so much that that truck turn around times for a journey of less than 10 km can take as long as 6 hours which means that truck efficiency and movement of CFS-nominated cargo is severely compromised trucks that could do five trips at the beginning of 2011 are barely able to move one container a day to day. While the Port and KRA reserve the right to nominate various CFS for cargo clearance, importers have faced delays exceeding 10 days waiting for cargo to move from the Port to CFS. The Kenya National Highways Authority reports that it expects World Bank Support to fix the road. However, the country cannot wait that long. Local resources should be utilized to dedicate passage for trucks between the Port and CFS and to Mariakani to increase off take of cargo.
• Inadequate equipment or operations to load CFS nominated cargo. CFS operators have pointed to the failure of KPA or its inadequate equipment to load cargo.
3. Failures of Electronic systems - Simba System and KWATOS
The situation is compounded by constant failure and collapse of the two Electronic Cargo clearing systems used by KRA and KPA which have no alternative backup. Since the introduction of Simba System in 2005, importers have incessantly asked KRA to invest in an electronic back-up system that will ensure seamless service delivery. It is the height of unresponsiveness that this has not happened forcing businesses and consequently the economies of East Africa to shut down regularly. Is it too much to ask for a reliable electronic back-up system?
4. Failure to punish those responsible for Congestion
Recent remarks emanating from the port management given wide coverage by the media have pointed fingers at business people who allegedly use the port as a storage area! No business person will keep raw materials waiting at the port while their factory runs out unless these are importers with no fixed orders. Whatever the case, the KPA has records of all the cargo owners, senders, or receivers of cargo it handles. Surely it cannot be difficult to contact owners of long stay cargo or publish their names through associations or in the press. Such violators are known and should be identified without issuing blanket accusations to all importers and consequently misrepresenting the situation.
5. Incentives for CFS to delay release of Cargo
Importers continue to face high charges due to the length of time it takes for cargo nominated to CFSs to be released. Underlying this is the fact that CFSs are paid based on length of stay of cargo in their possession. This incentivises delays. Importers are concerned that despite the Minister of Transport’s undertaking, there has been no shift in payment for CFSs that does not encourage delays in release of cargo.
6. CFSs Regulatory Framework
The current regulatory framework governing operations of the CFSs is not sufficient to ensure quality and standards of services. While KPA is responsible for implementing contractual agreements with CFSs, industry players have observed that the provisions of these contracts have not been adhered to by both parties, with CFSs complaining that they are not adequately compensated for some of the costs and services they provide.
7. CFSs Capacities
The pressure to move Cargo out of the port area quickly has occasionally led KPA to nominate CFSs without due consideration of their cargo handling capacities. Most of them are congested not only due to lack of sufficient and reliable equipment but also because their operators do not exhibit proper planning in receiving, staking and realising.
8. Enforcement of 24/7 Port Operations
The 24/7 operations were not extended to CFSs and the few that adopted the operations only did so only for their pick-up and delivery of cargo and not for any administrative or customs procedures. In view of the increased cargo volumes, there is need to explore the possibility of round-the-clock customs functions at some of the CFSs. The Government should provide the requisite security to facilitate the implementation of this measure.
9. KPA/KRA Modern Risk Management
KPA and KRA need to urgently employ and implement a Risk Management System that provides for selective screening of high-risk cargo, while expediting the clearance of low risk cargo. The international Convention of simplifying and harmonizing of customs procedures popularly known as the Revised Kyoto Convention Standard 3.32, provides special customs clearance procedures for authorised traders who meet criteria specified by customs.
10. Productivity at the PORT
While KPA has acquired additional equipment which aims at improving moves per hour/port performance, it is disheartening that productivity still remains low. This raises several questions on the part of the Management and Staff of KPA. The frequent labour threats and go slows exacerbate matters gravely.
11. Dispute Resolutions and Congestions
Some cargo remains un cleared due to disputes with government agencies and they must institute prompt dispute resolutions to enable importers and the concerned parties resolve disputes as quickly as possible.
With the implementation of these recommendations, we expect to see the congestion at Kilindini reduce drastically through immediate stakeholder consultations to resolve the challenges.
This is a joint statement from Mr. Gilbert Langat, the CEO of the Kenya Shippers Council and Ms. Betty Maina, the CEO of the Kenya Association of Manufacturers.
