Transshipment business seen as key to cementing Kenya transport hub status

Kenya should do more to attract transshipment business to boost its revenue and cement its regional transport hub status, a logistics firm has said.

Transshipment involves larger vessels docking at the port and redistributing their cargo to smaller ships that serve regional ports and Siginon Group reckons that the country is losing much needed revenue by not ramping up its capacity to handle the business category.

The Kenya Ports Authority (KPA) embarked on the expansion of the Mombasa port two years ago dredging it to allow for larger vessels to dock.

Welcoming the ongoing port expansion, Siginon managing director Meshack Kipturgo said the government was not working hard to attract transshipment business.

“You know as a country we are not doing well in transshipment cargo and this is denying us the much needed revenue to go hand-in-hand with the port development,” he said. He spoke after touring Siginon’s facilities in Mombasa on Tuesday, and noted that promoting the line of business would also increase business for the East African community.

Speaking about port performance over the weekend at Nyali Golf Club, KPA managing director Catherine Mturi-Wairi said they registered decline in transshipment traffic dropped from 287,952 tonnes last year to 260,444 tonnes this year.

“We consider transshipment traffic as a key segment of cargo that we need to capture. We have put in place measures to achieve that target,” she said.

Already the authority has set up a multi-agency taskforce to look into ways of revamping transshipment traffic through the Port of Mombasa.

According to Ms Mturi-Wairi the taskforce has developed an action plan on the activities to be undertaken to recapture the market niche.

“Through Kenya Revenue Authority, we were also able to waive the transshipment bond and gradually several shipping lines have started recognising these efforts and so we expect to see a positive trend by the close of the year,” she added.

In October the taxman scrapped the security bond which is meant to ensure that transshipped goods are not diverted into the local market duty-free as a way of reducing the cost of doing business and make the Mombasa Port more attractive.

Initially, the bond was collected at a rate of Sh100,000 per vessel but it was later revised to Sh1,000 per container following lobbying by shipping agents.