Traders blame inefficiencies, delays for rising port costs

Traders are now paying more to use Mombasa Port in what they say is the result of increasing inefficiencies and delays at the facility. Some shippers have gone ahead and introduced port congestion surcharge to meet the additional costs incurred as a result of delays.

Shippers Council of Eastern Africa (SCEA) Chief Executive officer Gilbert Langat said there has been an average of four ships waiting to dock at the port due to a number of factors.

The Kenya Ports Authority (KPA) has attributed the current increase in the number of vessel waiting to dock at the Port of Mombasa to a surge in cargo imported after Covid-19 pandemic cessation.

KPA Acting Managing Director Rashid Salim said the port is experiencing peak moments with recorded full container berth occupancy “with minimum vessel delays”.

He dismissed claims claim by the Dock Workers Union (DWU) that the delays are caused by the lack of staff morale.

"We are witnessing steady growth in import volumes for both general and containerised cargo following the cessation of the Covid-19 restrictions and lockdowns from the major import countries that had also resulted to most of the world's top performing ports experiencing congestion," said Mr Salim.

CMA CGM shipping line, one of the leading shipping group in East Africa and the third biggest worldwide container carrier with more than 494 vessels calling 420 ports in 160 countries has introduced port congestion surcharge to all cargo to and from Mombasa except that from China.

In a customer advisory, the shipping line introduced Sh15,000 per 20 feet container and Sh30,000 per 40 feet container from global port states to Mombasa effective February 22 this year, for all cargo including dry, reefer, out of gauge and break bulk.

CMA CGM also introduced a fee of Sh5,000 per 20 feet container and Sh10,000 per 40 feet container from Mombasa to other worldwide destinations for the same kind of cargo.

"Port congestion in Mombasa, Kenya is further increasing, CMA, CGM will implement the emergency Port Congestion Surcharge (PCS) on worldwide cargo bound to and from Kenya until further notice," read part of the liner circular to its clients.

DWU Secretary General Simon Sang said the delays which has led to shipping lines introducing surcharge should be taken very seriously as it is bound to hurt the economies of Kenya and “our neighbouring states which are currently very fragile”.

"The anticipated surcharge is caused by ships waiting for long in the stream due to the low performance in the Port of Mombasa. The cause of the current congestion which has caused many ships to wait for too long midstream is low staff morale," said Mr Sang.

Mr Sang said the low morale has been caused by mishandled overtime policy and its implementation due to big rift currently between the human resource department, operations department and DWU.

Mr Salim, however said the port has experienced heightened activity, adding that the authority's projections for February 2021, compared to similar period in 2020 and 2019 indicate that the facility’s performance will surpass the 2020 and 2019 performance.

"We are projecting to handle over 115,000 Teus against 108,000 Teus handled in 2020," said Mr Salim.

For non-containerised cargo the port is projecting to handle over 1 million tonnes against 800,000 tonnes handled in 2020, representing an increase of 20 percent.

For the last one week, the port has had an average population of 17,000 teus (Twenty Foot Equivalent Units) against its holding capacity of 41,000 Teus.

The enhanced efficiency has seen cargo dwell time reduce from an average of 5.6 days in December 2020 to 4.6 days in January 2021.

The acting MD attributed the improved performance to measures currently being undertaken by KPA , and working alongside shipping lines and other port stakeholders to streamline operations.

"As at Wednesday last week, we had only one container vessel that had arrived the previous day waiting to berth and she was scheduled to dock at berth No.16 later in the evening. This timing was within the 24-hour target stipulated in KPA's Customer Service Charter," he said.

Recently, KPA took over the loading and offloading SGR operations at Port Reitz Yard and reorganised all railtainer operational processes with logistic partners, hence “increasing end-to-end efficiency in the rail evacuation”. In January the port registered the highest SGR performance with 241 trains clearing 24,256 Teus, the highest in a single month since its inception.

Meanwhile the number of vessels that have called at the Port of Mombasa between January 1 and February 25, 2021 is 252 compared to 248 vessels in a similar period last year.

Last week, transporters protested the introduction of License for Conveyance of Goods under Customs Control where they were required to pay about Sh22,000 per truck to get the licence as from February 15 this year. The Kenya Revenue Authority has however postponed the order to allow further consultations.