KPA plans to share cargo fees with container depots

The Kenya Ports Authority (KPA) is reviewing its tariff structure to allow sharing of cargo handling fees with container freight station owners in a move aimed at expediting cargo clearance.

KPA general manager in charge of operations Khamis Twalib said the model whereby Container Freight Stations (CFS) earn revenue only from storage charges works against faster movement of consignments.

“There has been a tendency by operators to delay transfer of containers so that they generate revenue from storage charges, thereby penalising the importer. In the new structure, the sharing agreement will encourage them to move more cargo,” Mr Twalib said.

He said that the incentive would be offered to CFS operators who move more containers.

Mr Twalib declined to disclose details of the new tariff, only saying that it was due for approval by the board next week.

CFS managers have in the past been accused of deliberately delaying containers to earn revenue from storage charges under the service level agreement signed between them and KPA.

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Transporters charge Sh12,000 to move a container from Mombasa port to a CFS, while importers pay storage charges.

CFSs were allowed to operate from 2007 when the port, which had an installed capacity of 250,000 twenty-foot equivalent units (TEUS) containers, was congested.

The port now handles over 700,000 such containers. The Kenya Shippers Council has been lobbying to have its members clear cargo directly because of exorbitant charges by CFSs.

“We have a case where an importer was asked to pay $12,000 (Sh1 million) as storage charges before the goods were released,” said KSC chief executive officer Gilbert Lang’at.

Mr Lang’at said that goods do not have to be transferred to freight stations in cases where importers’ documents are with port officials by the time the containers arrive.

Mr Meshack Kipturgo, the chairman of the CFSs Association of Kenya, said that KPA’s gesture was welcome since it would streamline operations.

“CFSs are supposed to be extensions of the port, but the current tariff does not recognise this. Sharing handling fees with KPA will encourage competition in evacuation of cargo from the port,” he said.

Mr Kipturgo welcomed the recent announcement by the Commissioner of Customs Services, Ms Beatrice Memo, that CFSs would be allowed to handle transit cargo.