Shipping & Logistics

Mombasa eyes transhipment business after port upgrade

Earth movers clear a section of the second container terminal that is under construction within the port of Mombasa. FILE PHOTO | NMG
Earth movers clear a section of the second container terminal that is under construction within the port of Mombasa. FILE PHOTO | NMG 

With the expensive dredging behind it and the era of fast train set to begin, Mombasa may as well begin to think of its future as one of Africa’s transhipment hubs.

At a transhipment point, large ships from industrialised nations frequently dock to create a micro economy as they offload their cargo onto smaller vessels which eventually complete the journey to other ports in the region.

The first two months of 2017 have particularly been indicative. Transhipment cargo volumes increased by 87 per cent over last year’s levels to hit 19,225 twenty-foot equivalent unit (TEUs). During the same period, the segment accounted for 10,262 TEUs.

The increase is quite significant compared to cargo handled in 2015 and last year where transhipment volumes grew from 42,690 TEUs to 48,031 TEUS, an increase of 5,341 TEUS or 12.5 per cent. Dar es Salaam, Pemba, Mogadishu and Mauritius have so far proved as early beneficiaries of Mombasa port’s improved status. “We are geared towards booming business in transhipment segment following growing interest by shippers due to improved services,” said Kenya Ports Authority managing director Catherine Mturi-Wairi.

“We’ve flagged transhipment as an important growth strategy and we are pursuing major reforms in this business with the aim of becoming a transhipment hub.”

Last year, KPA commissioned phase one of the second container terminal, built with Sh30 billion loan from the Japanese government through the Japan International Cooperation Agency (JICA).

It has a capacity to handle 550,000 containers annually.

With the hub in operation, the KPA now has a capacity of 1.6 million containers which means that the perennial congestion of containers that the port experienced prior this project will be a thing of the past.

The standard gauge railway (SGR) train is also expected to further ease the congestion at the port when it begins to haul cargo later this year. Officials say the recent dredging has also made it possible for larger ships which cannot dock anywhere else in the region to use the Kenyan port

The growth in transhipment traffic can also be attributed to spirited marketing by an inter-agency committee on transhipment that was constituted last year. The team is chaired by the KPA, comprises Kenya Revenue Authority, Kenya Ships Agents Association and Kenya International Freight and Warehousing Association.

Some of the changes the committee has spearheaded include removal of the transhipment bond and permit which has simplified the cargo transfer process. Shipping line agents can also now access transhipment entries, enabling shipping lines to sub-contract the services to a clearing and forwarding agent to process transhipment entries on their behalf.

The port has also set aside areas in the port for stacking transhipment containers, which has eliminated physical identification of containers and adoption of online releases for transhipment cargo.

Latest reports indicate that quite a significant number of shippers now prefer to route Zanzibar cargo through Mombasa. Other interests for having Mombasa as the port of preference have also been expressed by shippers from Mogadishu, according to a recent report by KPA.

The SGR project is particularly important for Mombasa’s growth as a transhipment hub. It promises to boost cargo off-take by rail following expansion of Nairobi Inland Container Depot’ capacity from 180,000 TEUs to 450,000 TEUs. The Sh22 billion facility will handle big volumes of cargo freeing more space for transhipment at the Mombasa port.