Transporters, clearing agents oppose cargo tracking levy

A row has erupted between the Kenya Transporters Association (KTA), clearing agents and electronic cargo tracking systems association over Sh500 annual administrative fee.

The KTA and Kenya International Freight and Warehousing Association (KIFWA) want the levy which is charged on transporters before they get their annual Electronic Cargo Tracking System (ECTS) certificates scrapped.

The charge is an administrative cost levied on transporters by the Electronic Cargo Tracking System Providers Association of Kenya (EPAK) for the processing and vetting of all ECTS certificates.

The certificates are forwarded to the Kenya Revenue Authority (KRA) to issue Transit Cargo (TG) licences to transporters and clearing agents.

KTA chief executive Mercy Ireri said the levy is adding up to the cost of transport and should be scrapped.

"… they should be able to take care of their costs and they should respect the contracts they have signed with their clients. What they have done is seriously affecting the transport cost in Kenya. If this is additional charge to a transporter, then this will definitely be passed on to the client. So it makes our rates quite expensive,” she said.

“As a transporters association, we would wish to be competitive by having good prices for our clients, but this is the challenge we are facing.”

Ms Ireri said they had engaged KRA and EPAK on the same issue in a bid to find a solution.

Kifwa Mombasa branch chairman Roy Mwanthi said the levy is illogical as they pay for the same services from vendors licenced by KRA.

“If you don’t pay they don’t give you the ECTS certificate, the only document you need to present to KRA for you to get the TG license,” Mr Mwanthi said.

The chairman said each transporter pays Sh4,750 per truck monthly to the vendors for the arming/tracking of cargo. “The vendors are allowing the association to again come for our necks instead of themselves paying the association and probably adjusting the rate to accommodate that. There is no way EPAK can charge transporters directly,” said Mr Mwanthi.

EPAK in a statement signed by its executive officer in charge of daily operations, Flevia Gekone said the association’s management board made a resolution last November to levy an administrative cost of Sh500 per ECTS certificate yearly from January.

“The reason for this was that the vendors were already supporting the association through substantial quarterly subscriptions and the association now needed more money to efficiently discharge its new role. Some vendors opted to take up the cost on behalf of their clients while others did not,” Ms Gekone said.

So, far she said the process has been smooth and out of 13,000 certificates released by KRA’s Cargo Monitoring Division (CMD) to EPAK, 90 per cent have already been paid for and collected from the association.

The EPAK was registered in early 2017. Its eight members are Automated Logistics, Borderless Tracking, I Spy Africa, Navisat Telematics, Oak & Gold, Rivercross Tracking, SGS Kenya, Track N Trace.

“In January 2018, we received a directive from the Cargo Monitoring Division (CMD) formerly the Transit Monitoring Unit (TMU) that all ECTS certificate applications must be done through the association. We therefore took up the new role immediately and processed certificates for a whole year at no cost to the Vendors or Transporters,” Ms Gekone said.

The statement further said that in a meeting held at the KRA offices in August 2018 between CMD and EPAK, the latter was directed to vet and sign certificates before submitting them to KRA for signature.

“Please note that the vetting process is tedious and intense and involves counter checking the Transporter's name/Company, Registration Numbers, Trailer Numbers, Chasis Numbers, Engine Numbers, Device Numbers, Type of cargo among other details in the various systems and on the printed certificate,” the association said in their statement.

“This was therefore another additional role for EPAK which we also embraced. However, the same came with additional costs for equipment, space and human resource. Further, EPAK picks and drops certificates to and from KRA before dispatching them to the various Vendors.”