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Shipping & Logistics

Livelihoods now at risk as coronavirus hurts supply chain

A public health official in Kitui.
A public health official in Kitui. FILE PHOTO | NMG 

The outbreak of coronavirus has immensely interrupted supply chain across the globe, with trade hubs such as Kenya bearing the brunt.

Since the disease was first detected two months ago, essential supplies for Kenyan businesses especially Small and Medium Enterprises (SMEs) have been cut off, leaving them fighting to stay afloat.

Data from the Kenya Ports Authority (KPA) indicates that four ships from China have failed to dock at the Port of Mombasa since the virus broke out, with the country’s exports to the Asian nation dropping by 11.3 per cent.

KPA, in a statement told Shipping &Logistics that the port had already started to experience a decline in some commodities in the last three months.

"There is an anticipated effect on the throughput in the following months from February given the reduced trading volumes with China as a major trading partner," said KPA managing director Daniel Manduku in the statement .

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The Port of Mombasa, he said receives three big dischargers (import) from China under evergreen line and one state owned China Ocean Shipping Company (COSCO) ship on monthly basis.

“These four ships have not called since the coronavirus effect in China. That implies there would be no or very little export for china during the period. We have also lost on average two ships call for loading at Base Titanium,” Mr Manduku said.

As Kenya is a regional transportation hub, serving as an entry point for imports into regional land-locked countries such as Uganda, Rwanda, South Sudan, Burundi and DRC, slowdown in port activity is bound to be felt across the borders.

KPA said it was yet to quantify the business loss yet, adding that if the virus threat is not contained soon, it expected reduced number of vessels, especially from China going forward.

"This volume reduction will also have an effect in revenue collection," KPA said.

China is the largest buyer of the country's Titanium, mined in Kwale County. The minerals earned Base Titanium close to Sh20 billion in 2018, with 55 percent going to China. Treasury earns over Sh1.4 billion annually in royalties from the exports of the minerals.

Now the virus is threatening all this and more. Some traders relying on China imports are contemplating closing down their shops due to inadequate stock and they fear situation might get worse if the disease is not contained.

Kenyan's imports, mostly electronics, cosmetics and surgical gears, are reported to have been stuck in China because suppliers have never returned due to travel restrictions.

Ruweida Hussein, a Mombasa businesswoman said she plans to close the shop since she has not imported any cargo since the beginning of the year.

"We are counting losses since we have nothing to sell yet Mombasa County has hiked business permit charges. This is a blow to us and we might be forced to seek other alternatives to sustain our lives," said Ms Ruweda who owns a stream of boutique shops in Mombasa.

The Importers and Small Trader's Association chief executive officer Samuel karanja said that they have lost almost Sh30 billion since the outbreak as traders goods are stuck in China, with factories not working.

China is Kenya's single largest source market, accounting for about a fifth of Kenya's annual total imports. Chinese imports to Kenya in the January-November 2019 period amounted to Sh324.90 billion, or 20.3 percent of Sh1.6 trillion import bill, slightly lower than Sh346.87 billion a year earlier on reduced imports of machinery for the standard gauge railway (SGR).

"The travel advisories, coupled with lockdown across Chinese cities have greatly affected our business. We are now being forced to look for alternative markets," Mr Karanja said.

The processing of cargo has also been affected with Shippers Council of Eastern Africa (SCEA) saying there has been an increase of vessels' dwell time as different port States have put in place mechanisms to screen all crew members and inspect all vessels entering their ports.

SCEA executive director Gilbert Lagat said they are taking stock on the impact of the virus as the number of small scale importers unable to travel to China to do business increase.

Mr Lagat said maritime is global and traders, both importers and exporters, should expect a delay in their cargo considering different countries have instituted stringent measures in a bid to avoid spread of the diseases.

"Shipping is a global business and with many ships doing transshipment, they are avoiding China while some are taking more time in screening and inspecting crew and vessels respectively which in turn will affect time of import and ultimate cargo imports," said Mr Lagat.

"As it is, small scale traders who import in a pool will be mostly affected as a number of countries have denied traders visas to visit China and different countries. We have had reports of small scale importers who personally go to do business being denied visas. This will ultimate affect the number of consolidated imported cargo which account for substantive percentage of throughput."

KPA health department has already introduced drastic measures to ensure all imported cargo and vessel crew members entering the port are disease-free.

The port's general manager, operations and harbour master, William Ruto has directed all vessels and crew members who have visited China in the past 14 days to fill maritime declaration health form stating their health status before arriving into the Kenyan waters.

"All vessels arriving from China or might have passed through China should send in advance crew list and voyage memo for the purpose of getting details of the crew and movement of the vessel for the last 14 days respectively and a valid ship control/exemption certificate," read part of the notice sent to vessel owners by KPA.

China imports to Kenya have dropped by more than Sh58 billion since coronavirus struck two months ago.

According to provisional imports data from Kenya Trade Network Agency (KenTrade), imported cargo in January and February through the Port of Mombasa and Jomo Kenyatta International Airport dropped from Sh160.102 billion to Sh101.46 billion compared to the same period last year.

KenTrade manages the National Electronic Single Window System (KenyaTradeNet System) which is an online platform that serves as a single entry point for parties involved in international trade and transport logistics to lodge documents electronically on goods imported or exported in the country.

Since the outbreak of the deadly COVID-19 - a disease caused by coronavirus infection, Beijing responded by temporary closure of business to manage the spread of the epidemic whose vaccine is yet to be found.

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