Congestion fears over sugar, transit cargo checks order
A ship offloads its cargo at the port of Mombasa. Investors fear new gargo clearance rules could lead to costly delays. PHOTO | FILE
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Cargo handlers see the new directive as reverting to the old ways of doing business that were synonymous with inefficiency.
The port of Mombasa faces fresh threats of congestion following a directive by the government that all sugar imports and transit cargo be inspected at the facility’s main yard.
As part of reforms aimed at sealing suspected tax leaks at the port, Transport secretary James Macharia on Tuesday ordered that the two categories of cargo would temporarily be inspected within the port instead of at Container Freight Stations (CFSs) as has been done previously.
“All transit cargo will be inspected within the main port and not in CFSs (Container Freight Stations). We have also directed that any sugar imported into the country be inspected within the port,” he told a news conference in Nairobi.
The directive however triggered concern over renewed congestion at the port even as inventories by its managers, the Kenya Ports Authority(KPA) showed that its container yard population as at January 3 stood at 14,033 Twenty-Foot Equivalent Unit (TEUs).
“The CFSs were particularly designed to hold cargo away from the main port but when you revert to the old ways of holding some cargo at the port yard you run the risk of creating a fresh congestion within the port which is not good for the port’s profile,” Hassan Ibrahim, a cargo dealer in Nairobi told Shipping & Logistics.
Kenya is a key gateway to the region in that the Mombasa port handles imports such as fuel and consumer goods for Uganda, Burundi, Rwanda, South Sudan, the Democratic Republic of Congo and Somalia and exports of tea and coffee from the region.
Mombasa port has in recent years experienced cargo congestion, which the KPA attributed to a lack of space following delays by importers and clearing agents to promptly collect containers from the port and the various CFS.
Kenyan authorities have repeatedly put Ugandan traders on the spot for choking the port with thousands of uncollected cargo containers ahead of an expected surge in trade volumes at the harbour.
Only last year, a long-running feud between Ugandan traders and Kenyan authorities over the auction of uncollected cargo at the port of Mombasa was escalated to the East African Community leadership amid claims of unfairness.
Uganda accused Kenya of imposing a new non-tariff barrier by “selectively auctioning Ugandan goods held at the port of Mombasa”.
“Lengthy, restrictive and unclear administrative procedures of licensing Uganda-owned container freight stations and warehouses in Kenya are non-tariff barriers,” Uganda said an audit report published by EAC secretary-general Richard Sezibera in 2015.
Uganda also raised concern over increased impounding of suspected counterfeit goods meant for its market at the port.
In a bid to avert feuds with Kenya, the Uganda Revenue Authority (URA) has since resorted to issuing regular notices to traders to clear their cargo from the port of Mombasa to avoid penalties, including auctioning of overstayed goods.
Gateway facility
In a deal between Kenya and Uganda, cargo containers destined for Uganda through Mombasa port have also since March 2014 been publicly listed to help ease congestion at the region’s main gateway facility through efficient and timely flow of information.
A special online portal provides an account of all container shipments bound for Kenya’s largest export market, including the date and time of arrival at the port of Mombasa, the consignees and the duration at the facility.
This follows a pact signed between the KPA and URA to hasten cargo clearance in what is expected to shake up the clearing and forwarding agency business.
The port is seen as a measure of economic activity in East Africa.
The port handled one million TEUs of cargo between January and December, up from 894,000 TEUs in 2013.
It expects a 30 per cent increase to 1.3 million TEUs in 2015.
