Shipping firms pass on piracy charges to local importers

International effort

The council also called for concerted international effort to end lawlessness in the country and warned that any power in the region faning the crisis would be dealt with severely.

But Kenyan exporters, who rely on Mombasa port, are not willing to wait longer.

Last week the Fresh Produce Exporters Association of Kenya (FPEAK), a lobby group for exporters of produce such as avocado, pineapples, mangoes and vegetables, reignited calls for international action saying heightened piracy activities along the Eastern Africa coast was costing the industry $12 million (Sh900 million) in additional costs every month.

“The half-hearted attitude towards fighting piracy in the region stems from the misguided notion that no one is affected. Governments in the region view the menace as a problem of international shipping lines, while vessel operators simply pass on the cost to local shippers and therefore see no need to press for their governments’ cooperation in eradicating it,” said Dr Stephen Mbithi, the FPEAK chief executive officer.

According to Mr Lang’at, the insurance companies now charge a premium of $300 to provide the same cover that would have attracted $150 18 months ago, while shipping lines have increased freight charges from $900 to $1,200.

Also increased by shipping lines due to increased piracy are War Risk Surcharge (now $250 from $100), Bunker Adjustment Factor (from $340 to $680) and Piracy Surcharge ($90 to $153).

“Some economists may argue that piracy money finds its way into the country and therefore stimulates economic activity, but we must never forget that a good number of exporters being forced to raise the ransom money are small scale farmers who can hardly make ends meet,” said Dr Mbithi.

KSC data indicates that the rate at which international shipping lines pass on costs to local shippers varies from one vessel to another.

Maersk and SAFMARINE are currently the most expensive lines, each levying a piracy surcharge of $153 (Sh11,475) from the $90 (Sh6,750) that they used to charge before October last year.

ZIM has increased its piracy surcharge to $150 from $60; DELMAS from$100 to 130; CMA CGM from $75 to $90, while PIL has also adjust the ransom cover to $90 from $60 last year.