CFS owners cry foul over ‘favouritism’ in container allocation

Autoport Container Freight Station. PHOTO | FILE

What you need to know:

  • An allocation schedule for December, January and February shows three CFSs received more than 1,000 containers each while others were allocated less than 500.
  • Great Lakes received 489 containers, Autoport (446), Awanad (420), MCT (350) while Portside was allocated just 205 containers.
  • The CFSs were established in 2007 as the Kenya Revenue Authority moved to decongest the Port of Mombasa.

A storm is brewing at the Port of Mombasa over the basis for allocating containers to the 21 private storage facilities as owners allege favouritism.

The temporary storage facilities, known as Container Freight Stations (CFSs), currently handle up to 80 per cent of the one million-a-year throughput in a bid to decongest the port.

In a letter addressed to Kenya Ports Authority (KPA), the CFS Association chairperson James Rarieya cites “skewed” allocation of cargo to the bonded customs facilities as a threat to their business.

Despite having the same storage capacity, an allocation schedule for December, January and February seen by the Business Daily, shows three CFSs received more than 1,000 containers each while others were allocated less than 500.
Over the period, Focus led with 1,231 containers followed by Makupa’s 1,145 and Mitchell Cotts which handled 1,116.

By comparison, Great Lakes received 489 containers, Autoport (446), Awanad (420), MCT (350) while Portside was allocated just 205 containers.

The lobby wants containers allocated to the CFSs per ship in a formula it proposed to the KPA earlier. “As agreed, the proposal for vessel allocation forwarded to your office is simplified and easy to monitor and was to be implemented immediately,” wrote CFS Association executive officer Daniel Nzeki in the reminder letter.

“We also expect that the rolling out of rotations of vessels will start first with the CFSs that have consistently had shortfalls in allocation,” the letter said. The authority has, however, remained tight-lipped over the matter.

The CFSs were established in 2007 as the Kenya Revenue Authority moved to decongest the Port of Mombasa. The KPA has since pledged to cut allocation of containers to the CFSs by half when the fast train begins to operate from June.

It is, however, not also clear whether the current reduction of cargo to some CFSs is permanent, but according to sources, the facilities are already feeling the pinch.

“The situation is so serious that some CFSs are idle. There is a risk of some of them closing shop which will be disastrous to Mombasa economy since they employ thousands of people,” said a CFS operator who asked not to be named.

The KPA had not responded to our queries by the time of going to press yesterday. Last year, CFSs asked the government to come up with a policy framework to protect their investments once the Standard Gauge Railway becomes operational, fearing that they might be kicked out of business.

The SGR is projected to deliver over 1,000 containers per day to Embakasi Inland Container Depot (ICD) from Mombasa port, which will drastically reduce the volume of cargo transferred to CFSs which handle domestic containers.

All empty containers will also be ferried to the ICD using the SGR and stored at a yard reserved for them, effectively threatening the survival of CFSs.

“CFSs have played a significant role in easing congestion at the port of Mombasa since they started. The government should not abandon us considering we have invested heavily and we have created close working relationship with our clients over the years,” Mr Rarieya said in an earlier interview.

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