Cargo delays hit Mombasa port over payment dispute

Cargo trucks on the queue between Portreitz and Dongo Kundu overpass heading to the Port of Mombasa to pick cargo in this picture taken on May 14,  2020. PHOTO | LABAN WALLOGA | NMG

Importers using Mombasa port are experiencing delays in cargo delivery and collection following a payment dispute pitting Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC-SGR) against shipping lines.

The Business Daily has learnt that several containers are stuck at different port facilities in Mombasa and Nairobi after KPA, which is owed substantial amounts of money by KRC and shipping lines, suspended the release of cargo until the debts are cleared.

In correspondences, KPA has been writing to shipping lines which use SGR to ferry cargo to Nairobi and Mombasa to clear their arrears in vain, forcing them to take action.

“This is a follow-up notice which we sent two months ago. We bring to your attention that your account has unpaid debts and is operating way above your bank guarantee. A cursory look into your account reveals that there are invoices aged over 30 days. The authority’s credit policy 2021 stipulates that invoices should settle within 6 days from the date of invoicing thus you are outrightly violating the policy,” read part of the communication to shipping lines by the KPA credit control department.

One of the notices dated June 10 2022 added: “For invoice under disputes should be paid in full pending resolution of the disputes and where credit notes are subsequently issued, they will be used to offset subsequent invoices.”

KPA had asked the shipping line to liaise with KRC to clear the arrears considering June is the end of the government financial year.

“Given the above, therefore, we request that you clear the outstanding amounts immediately, otherwise your account has been assigned an overall block and no services will be rendered. We urge you to comply to avoid further inconveniences,” said KPA in its communication.

On Thursday, Kenya Transport Association (KTA) said its members have been affected by the suspension of the services saying KPA holding shipping lines accounts to force recovery of the debts is delaying delivery of both cargo and return of containers.

“What is happening in the logistic chain is affecting the delivery of cargo since importers pay upfront for any services rendered by KPA, KRC (SGR) and Shipping lines,” said KTA chairman Newton Wang’oo.

The association also accused the government of forcing them to use SGR despite increasing inefficiencies thus making the cost of transporting cargo through the Northern corridor expensive.

“The government has continued to use these institutions to force railing of goods from Mombasa to Nairobi at higher rates than road transport rates and therefore making SGR a monopoly,” said Mr Wang’oo.

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