More than 400 empty containers lie at the upgraded Nairobi Inland Container Depot.
The containers were railed to the ICD without being nominated to the facility. As a rule, importers have to declare in the import documents where they want their cargo to be offloaded.
Return of the empty containers is being complicated by the fact that the SGR trains are not able to transport the goods to the final destination, forcing the importers to use road transport for the last mile transport.
The cost of transporting empty containers back to designated shipping lines yards in Mombasa is watering down the gains for importers using the Standard Gauge Railway (SGR) subsidised freight rates.
Currently, there are more than 400 empty containers lying at the Nairobi Inland Container Depot (ICD) awaiting transportation to yards in Mombasa, with importers bearing the costs, according to clearing and forwarding agents.
The containers were railed to the ICD without being nominated to the facility. As a rule, importers have to declare in the import documents where they want their cargo to be offloaded.
The The Kenya Ports Authority (KPA) General Manager, Operations and Harbour Master, William Ruto on Tuesday said the number of 20-foot containers were 289 while the 40-foot ones were 141.
He however said the initial confusion that arose after goods were railed to the ICD were being addressed and the yard had been reorganised.
“We have already deployed 10 people to assist in the organisation of the yard and clearing agents are now able to locate their containers,” Mr Ruto said, adding that they expected the equipment to be transported to Mombasa by Tuesday.
Return of the empty containers is being complicated by the fact that the SGR trains are not able to transport the goods to the final destination, forcing the importers to use road transport for the last mile transport.
However, the Kenya Railways (KR) has negotiated with shipping lines on the return of the containers to Mombasa, although the logistics have not yet been streamlined.
The KR started by charging Sh50,000 to transport a 20-foot container but reduced the rates to Sh35,000.
However, to ferry the empty containers back to Mombasa by road, transporters are charging between Sh35,000 and Sh50,000 with delayed delivery of the equipment attracting demurrage charges after free period days, according to an agent based in Nairobi.
“Adding this to the delays that we are experiencing to trace containers at the ICD Embakasi yard, at times we find it inconvenient to use SGR even though the promotional rates look attractive,” the agent said.
The Kenya International Freight and Warehousing Association (Kifwa) Nairobi branch chairman William Ojonyo said the association had called for a meeting with importers to address the problem.
“We support the government in its efforts to ensure that the SGR freight trains work but we also want to see to it that the procedures don’t hurt the importer who is forced to incur extra costs,” he said.
According to Rongai Workshop and Transport Limited Managing Director Vanessa Evans, the Kenya Railways needs to hold talks with transporters on how empty containers transported by the railway could be returned to Mombasa without importers bearing the cost.
“We have been asked to transport them to Mombasa and we accept (the request) if there is space. Otherwise it is difficult for the transporter to return containers that they did not generate in the first place,” she said, adding that agreements between transporters and importers cover the cost of returning empty containers.
Mr Ruto said there were efforts to deal with the challenges with a key meeting planned for today bringing together all players in the logistics chain.
“We are committed to ensuring that there is faster identification of containers at the yard,” he said.
Owing to the logistics challenges the KPA and Kenya Railways are facing, Container Freight Station (CFSs) have proposed to clear goods in their yards and hand over containers to the KR Port Reitz terminal at the port for transportation to the ICD where importers will collect their goods.
CFS’s have proposed to continue carrying out their normal duties of verification and release of cargo. This, they say, will ease the pressure on customs clearance at ICD Embakasi.
“It is expected that there will naturally be a buildup of pressure on the operations at the facility as the volume of cargo grows,” the CFS Association said in a proposal, being reviewed by the three government agencies.
Kenya Railways managing director Atanas Maina also said they were in discussions with the CFS operators, noting that the SGR freight services had presented opportunities in the logistics sector, Mr Maina said they were considering the proposal.
“CFSs are part and parcel of the transport and logistics solution providers. We have had fruitful engagements with the Association and there is room for collaboration in movement of cargo from the Port Reitz Terminal to the ICD,” he said in an interview last week.
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