Economy

Two CFS shut operations due to pick or pay order

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PedestrianS walk next to a Container Freight Station (CFS) along the Portrietz road in Mombasa on 21st September 2021. PHOTO | KEVIN ODIT | NMG

Summary

  • The pick or pay directive which was effected in 2019 has forced importers whose trading pin is registered in Nairobi to haul their cargo using the Sh327 billion Standard Gauge Railway (SGR) to Nairobi Inland Container Depot (ICD).
  • Mombasa governor Hassan Joho whose family owns a major CFS in Mombasa, and Boss Freight Terminal Ltd port operations manager, Godwin Mwanjuwma said businesses were disrupted due to the pick and pay order.

Two container freight stations (CFS) in the coastal region have shut their operations following the pick or pay order that is hurting operators.

The pick or pay directive which was effected in 2019 has forced importers whose trading pin is registered in Nairobi to haul their cargo using the Sh327 billion Standard Gauge Railway (SGR) to Nairobi Inland Container Depot (ICD).

This has left 21 CFS’s in the region to scramble for less than 10 percent of cargo from the port of Mombasa.

The multibillion SGR was launched in 2017 by President Uhuru Kenyatta. The railway was built through a loan from China Exim Bank.

Mombasa governor Hassan Joho whose family owns a major CFS in Mombasa, and Boss Freight Terminal Ltd port operations manager, Godwin Mwanjuwma said businesses were disrupted due to the pick and pay order.

Mr Joho said he will continue to petition the national government to implement policies that will spur and revive businesses in the port city.

“Mombasa’s economy was affected by the introduction of SGR forcing importers whose trading pin is registered in Nairobi to haul their cargo using the rail to Nairobi Inland Container Depot (ICD),” said Mr Joho.

He assured traders in the port city that he will support businesses and create efficiency.

Mr Mwanjuwma said the directive is hurting the CFS business.

He said two CFSs have so far shut down operations and others have laid off hundreds of its staff due to the directive.

“We are losing business and customers, it’s a very big challenge. CFS’s are struggling with business due to the directive. There’s no win-win situation, we are the ones carrying the bane,” he said.

Mr Mwanjuwma said the Boss Freight Terminal Limited which used to handle around 2,000 containers has dropped to 200 when the directive was issued.

The Court of Appeal last week suspended the execution of orders quashing directives issued by the government requiring that all cargo imported through the port of Mombasa be transported to Nairobi and the hinterland exclusively through the standard gauge railway (SGR).

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