The new charges will adversely impact ongoing initiatives to promote a modal shift from air to sea freight which is already gaining traction, especially against the backdrop of climate and carbon reduction initiatives and resultant market demands, especially in Europe.
Danish shipping group Maersk, which controls a 28 percent market share of cargo throughout the Mombasa Port, has increased its freight surcharges starting next week because of militant disruptions on the key Red Sea or Gulf of Aden route.
This means traders and consumers of cargo brought in by the shipping line through the key gateway will face higher costs from Monday next week, as the firm reported industry-wide disruptions courtesy of Yemen-based Houthi militants.
Many tanker owners and container shipping operators have suspended voyages through the Red Sea, with some opting to take the longer route around the Cape of Good Hope--pushing up shipping costs.
Maersk has issued an advisory to its customers indicating that the cost of exporting a 20-foot container from the port of Mombasa will rise by Sh3,110 ($24) from Monday, while the shipment charge on a 40-foot container will increase by 11 percent.
The cost of importing a 20-foot and 40-foot container will also increase by Sh4,275 ($33) and Sh4404($34) respectively. The Shippers Council of Eastern Africa (SCEA) and its members have expressed concern regarding the increase of different charges by between four percent to 30 percent.
"While SCEA appreciates the important role that Maersk plays in connecting global economies, our members have expressed concern that these new surcharges will significantly increase the cost of doing business, and adversely impact their already struggling businesses in Kenya and the Eastern African region," said SCEA chief executive officer Agayo Ogambi.
Mr Ogambi said from an industry analysis, these new charges will cost the industry an additional Sh27,592,300 ($212,980) to export 20ft containers annually through Maersk from Sh205,774,976 ($1,588,340) to Sh233,367,276 ($1,801,320) based on the 2023 volumes handled by Maersk) and Sh51,457,087 ($397,188) for 40ft containers annually (from Sh488,842,336 ($3,773,286) to Sh540,299,424 ($4,170,474).
Similarly, it will cost the industry an additional Sh504,007,996 ($3,890,347) for the importation of 20ft containers in a year from Sh3,344,789,618 ($25,817,829) to Sh3,818,797,614 ($ 29,708,176) and Sh656,077,872 ($5,064,147) to import 40ft containers annually from Sh5,364,401,424 ($41,406,849) to Sh6,020,479,296 ($46,470,996) based on Maersk 2023 throughput share.
These new charges will adversely impact ongoing initiatives to promote a modal shift from air to sea freight which is already gaining traction, especially against the backdrop of climate and carbon reduction initiatives and resultant market demands, especially in Europe.
Since Mombasa is the gateway to Eastern African countries, the above analysis is inclusive of a 30 percent port throughput to the regional transit countries thus the increase has the potential to hugely impact the regional economies and negate the competitiveness of the Mombasa port.
