Measures recommended by the government and World Health Organization (WHO) to contain the spread of Covid 19 have affected seamless flow of the cargo and increased the cost of logistics, Shippers Council of East Africa (SCEA) said in a recent brief on the status of the industry.
On domestic bound cargo, the monthly average storage cost to importers at the Inland Container Depot in Embakasi was USD 73,006.875 and USD 118, 245 USD for March and April respectively. Shippers are thus paying storage charges of between USD 23,000 – USD 42,000 per week, Gilbert Langat, Chief Executive Officer said.
About 52 percent of the cargo attracting storage charges is in the category of over 21 days at ICD. Domestic cargo enjoys a free storage period for only four days. The cargo attracts storage cargo for up to 21 days. If it is not cleared within this period, Kenya Revenue Authority (KRA) is required to take custody where Custom Warehouse Rent accumulates.
Although the government extended the cargo free storage period last month for transit cargo, it did not do so for domestic cargo. Stakeholders in the sector led by the Federation of East African Freight Forwarders Association wanted a 9 days window for the local cargo.
Also, there has not had a significant performance in cargo dwell time with the month of May recording an average of 6 days which is far from the 4 days set.
Critical operational measures that have affected efficient clearing of the cargo include personnel of key institutions such as Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA) partly working from home and affecting decision making.
Although customs clearance of cargo requires physical interaction either for verification or release and with clearing agents not freely allowed to physically access offices of KPA, KRA and any other agencies to solve issues, delays are not avoidable.
There are also problems associated with the implementation of the customs online working environment such lack of time frames for action, no real-time feedback to stakeholders on the progress of clearance of their goods;
Reduced working hours for essential services providers such as clearing agents, reductions of KPA shifts from three to 2 and the reduction in the number of clearing agents’ staff allowed into the ICDN facility due to social distancing measures have all worked against efficiency.
Road transporters have continued to face challenges with turnaround times for trucks. Compared to the month of April last year, Import local shows 15% decrease in the turnaround time, import transit 25%, export local 28% as well as export transit which records the highest improvement of 71%. However, the turnaround time for empties negates the trend and records a 26% increase for the month of May.
“The main impact to this being the Covid-19 pandemic as a result of implementation of the containment measures which have adverse effects on operationalization,” said the brief.
The hardest hit sector is the transit cargo. Transit truck drivers have been identified as a weak link in coronavirus spread across the borders. For the case of Kenya and Uganda, truck drivers are required to undergo mandatory checks that can take upto to 10 days for results to come out with the short validity period of 14 days posing further challenges.
“With delays at the border stations going up to 10 days truck turnaround increases thus increases the cost of transport. For Rwanda, Kigali and South Sudan, the fact that they have to cross two border stations makes the situation dire,” Langat said, adding that the risk of the Covid free certificate expiring before border crossing remains high.
From Mombasa, the cost of transporting cargo to Kampala has gone up by an average of USD, USD 1400 for Kigali, USD 2000 for Bujumbura and 2400 for Juba. This is as a result of delays and lack of sufficient trucks, some truckers having shied off from venturing on these routes.
While it took an average of 2-4 days for a return journey to Kampala in last year, the Covid 19 period has seen this rise to 7-9 days. In Kigali, it is taking 14-16 days up from 7-8 days in 2019.
Transporters took 9-10 days to reach South Sudan but now they need 21-26 days for the journey, SCEA said. From Mombasa to Bujumbura, from an average of 9-10 days in 2019, transporters require 19-20 days.
The different levels of controls and protocols have also been a challenge for the corridor affecting the smooth movement of cargo and diplomatic tiffs between countries and feeling of harassment by land linked countries.
A case in point is where trucks are jammed at the border crossing for many days leading to build up of trucks and risks to the local communities in spread of Covid.
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