Shippers protest new depot levy

Starting Wednesday, importers with goods at the Inland Container Depot (ICD) in Nairobi that are not collected within 24 hours after being released by the Kenya Revenue Authority (KRA) will pay up to $200 (Sh20,000) per container daily.

The Kenya Ports Authority (KPA) general manager operations William Ruto on Tuesday confirmed that a notice issued on October 12 that referred to adjustment on the tariff as “minor” will start being implemented despite opposition by industry players.

According to the tariff, goods staying over 24 days at the ICD pending clearance will attract a fee of $45 (Sh4,500) and $90 (Sh9,000) per day for the 20- and 40-foot containers respectively. However, after goods have been released, a 20-foot container would be charged $100 (Sh10,000) while the 40-foot container would attract a fee of $200 (Sh20,000).

The KPA said the new charge is expected to “optimise use of the storage capacity and make the facility more competitive and user friendly”.

“We have not increased any charge as far as we are concerned because these are the rates we use at the port. In essence we have just harmonised the rates,” Mr Ruto maintained, adding that the tariff has been in operation since 2012.

He said the current charges were promotional rates introduced when the Standard Gauge Railway (SGR) freight services started in January.

However, industry players have hit out at the authority, accusing it of penalising importers, saying delays and inefficiencies are perpetuated by cargo clearance agencies. They called on the government to intervene and halt the charges, saying the punitive fees would be a hindrance to trade.

The Shippers Council of Eastern Africa (SCEA) termed the new rates as “extortion” and asked the government to intervene. The council said the average time goods are collected is three days and the 24 hours could not be attained.

“The 24 hours prescribed for removing cargo after release failure to which one incurs the wrath of storage charge of $200 a 40-foot container is unacceptable and shippers consider this as extortion,” said executive officer Gilbert Langat.

Mr Langat said the new rates will cost importers over Sh10.6 billion annually up from the current Sh5 billion, terming the increase as impediment to trade.

Already, importers have incurred costs of over Sh2 billion this year resulting from inefficiencies and delay in clearing of goods at the ICD. Clearance of goods averages 12 to 13 days while over 80 per cent of cargo incurs storage charges, he said.

“The estimated increase of over 55 per cent cannot be described as minor, a word used to avoid seeking the requisite approval from the Transport ministry. More efforts should be towards compliance/trade facilitation and not increase in fees and charges and penalties,” said the shippers lobby.

According to the council, after goods are released by KRA, a lot of time is spent in securing cargo from KPA, tracing of containers as well as delays at the exit gate and congestion of trucks.

“The truck turnaround time at the ICD is currently seven hours and collecting goods within 24 hours after release is unattainable,” Mr Langat added.

The shippers now want the government to put a cap on increase on storage charges at port and ICD, saying the levies are being used as a means to collect illegal taxes.

They want the government to impose a ceiling on how much State agencies should impose as penalties and lay emphasis on promoting efficiency and compliance instead of revenue generation.

“KPA should enhance its human and equipment capacity at the ICD, enhance efficiency and operations while other cargo clearance agencies must promptly avail consignments on time. The increase of the rates will not solve the current congestion problem at the ICD where containers are estimated to be over 11,000 against an operation capacity of 3,500,” Mr Langat said.

While the ICD was upgraded from a capacity of 180,000 twenty foot equivalent units (Teus) to 450,000 at a cost of Sh23 billion, currently there are eight trains ferrying goods to the ICD daily, each carrying 108 containers.

“While we support the SGS freight service, we must also review the number of trains serving the depot against the current capacity with the view of streamlining and making the rail freight more efficient and reliable,” Mr Langat said.

The Kenya International Freight and Warehousing Association (Kifwa) also said they had tried to talk to concerned parties without success.

“We have made our position clear that the rates are unacceptable and should not be implemented. Importers will not be forced to incur costs due to delays caused by other cargo interveners,” Kifwa national chairman William Ojonyo told Shipping and Logistics in a phone interview.

In what appeared to be a looming clash between importers and KPA over the rates, Mr Ojonyo warned that they would take measures to ensure that the tariff was not implemented.

“We cannot allow to be penalized for the mistakes of goods clearance agencies,” he said.