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Shipping & Logistics

Uhuru directive on cargo a huge relief for traders

President Uhuru Kenyatta
President Uhuru Kenyatta when he made an impromptu visit at the Inland Container Depot in Nairobi last week. He gave an order that clearance of imported goods be streamed and speeded up. PHOTO | PSCU  

Over the past few months, clearance of cargo at the Port of Mombasa and at the Inland Container Depot in Nairobi has been a nightmare for shippers and traders.

The situation has been mainly blamed on elaborate mechanisms put in place to tame the influx of counterfeits that have been flooding the country. The high number of agencies working at the port, and tasked with inspecting goods entering the country have been taking too long to perform their assigned roles.

The inordinate delays in the clearance of cargo have seen companies face tough times as their stocks are held for months at the port. Some businesses have been even forced to shut shop after being driven to financial turbulence.

It was therefore a huge relief for traders and shipping players when President Uhuru Kenyatta announced on Madaraka Day that only three cargo interveners — the Kenya Revenue Authority (KRA), Kenya Ports Authority (KPA) and Kenya Bureau of Standards (Kebs) — will be allowed to operate at the port.

To further enhance fast clearance of goods at the port, the President said imports with a Certificate of Conformity (CoC) should not be subjected to another verification unless there is evidence of non-compliance.

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The Kenya International Freight and Warehousing Association (KIFWA) national chairman Roy Mwanthi welcomed the directive, saying this will end the bottlenecks that have been delaying cargo delivery both at the Mombasa port and at the Inland Container Depot(ICDN).

“That is what we have been advocating as Kifwa, that cargo intervention at the port should not disadvantage importers. So with the directive, now we expect to see change in as far as cargo delivery at the port is concerned,” said Mr Mwanthi.

The chairman said cargo dwell time is currently 12 days at the ICDN as opposed to the four free days given by Kenya Ports Authority (KPA

“The situation as it is means that every importation undergoes storage by default. A trader would add all the storage costs when pricing his merchandise,” he said.

At the moment, storage charges range from Sh3,000 for the first three days per twenty feet equivalent units (teus) and double for the forty feet container and then in the next tier, it increases to Sh4,000.

Mr Mwanthi said CoC should always remain the primary document of clearance.

“Once you have the CoC, it means goods have been inspected abroad. The values are known and the cargo is compliant... there are no many issues,” he said.

The Kenya Ships Agents Association Chief Executive Officer Juma Tella said they have borne the brunt of the cargo delays, adding that the President’s directive should be implemented immediately to ease the pain importers are going through at the port.

“It has been a problem and especially to us as shipping lines. Transshipment cargo at the Port of Mombasa has been frustrated by the so many government agencies. This is a cargo that is being transshipped from another country to another country and it has all the documents from the original country. It has been sanctioned by the original country, why should a Kenyan government agency stop it here?” said Mr Tellah.

“There are so many interference at the port, disrupting trade. If you go to the port right now, there are some transshipment containers from Mozambique that have stayed for over two years. These frustrated shippers can opt for Dar-Es-Salaam because there are no problems there,” said Mr Tellah.

He said in Djibouti, where he used to operate from, there are no government agencies at the port.

“If you go to Djibouti, you will never see any government agency at the port. Even customs is outside from the port. But not in Kenya where every agency comes with its own charges to the importer. Those charges are passed on to consumers,” said Mr Tellah.

Car Importers Association of Kenya (CIAK) national chairman Peter Otieno however warned that the directive by the President could result in counterfeits and substandard goods flooding the Kenyan market.

“Some of the goods imported into this country are substandard and I fear that although KRA, KPA and Kebs will be at the port, I still think that the other government agencies must also support and countercheck these goods,” said Mr Otieno.

He said the presence of many agencies to clear cargo at the port help in fighting corruption and the influx of substandard goods.

“We need to look at both the negatives and positives about the directive,” Mr Otieno said.

“Although I agree with President Kenyatta ... we might pay a price that we shall never forget,” said Mr Otieno.

Former Kifwa national chairman William Ojonyo urged the business community to make sure whatever they import conforms to the required standards in order to fight the influx of counterfeits.

“As we push KRA, KPA and Kebs to work within time, I am also urging the business community to do the right thing,” said Mr Ojonyo.

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