The increased infrastructural development and cargo handling capacity is driving the Kenya Ports Authority (KPA) move to make transshipment business the next frontier of business growth at Mombasa port.
A multi- agency task force put in place under the KPA to focus on tapping transshipment cargo for Mombasa port is yielding fruits as the volume doubles. KPA continued to record an increase of transshipment cargo which almost doubled from 121,577 TEUs in 2018 to 211,604 TEUs in 2019.
The Corporate Communication manager at KPA Mr Bernard Osero also attributed this growth to a serious marketing campaign that saw the task force visit source markets in Europe and Asia.
KPA has also significantly improved cargo handling logistics at the port and also removed a lot of paperwork by embracing online documentation. In February 2016, Phase I of Kipevu Container Terminal was completed, adding 550 000 Twenty Foot Equivalent Units (Teus) to Mombasa port’s container capacity. Phase II is expected to provide an additional 450 000 TEU.
“This extra capacity has brought a lot of cargo fluidity at the container yard. There is adequate space, improved cargo dwell time and ship turnaround,” Osero said.
Kenya Ships Agents Association (KSAA) said that Mombasa port transshipment potential is huge if the government relaxes some of the measures it has put in place. KRA still requires the shipping lines to lodge the document with customs. Although shipping lines successfully lobbied to be allowed to lodge the document without the need of freight forwarders, which came at an extra cost, the delays have a huge toll.
“ We have been pushing for use of inward and outward manifests to reconcile movement of the cargo in and out of the port, which is a common practice world over,” Tellah said.
Although the government has held the ground that this can only be canvassed through the East Africa Community, Tanzania, a signatory does not require shipping lines to lodge entries.
The increased volume of the transshipment cargo through Mombasa port can also be attributed to the congestion at the Dar port. To avoid delays, some shipping lines have opted to drop Tanzania bound cargo at Mombasa port for onward transmission to Tanzania.
Zanzibar and other East African islands are popular destinations of Kenya transshipment cargo, with volumes going as far as Far East.
A joint task force by the KPA and Kenya Revenue Authority (KRA) that was initiated in 2015 has played a central role in removing bottlenecks that were making shipping lines shy away from using the strategically located Mombasa port as a transshipment hub.
The joint task force visited some of the best performing transshipment hubs each in Africa, Asia and Europe which have recorded significant growth on this, to gather guiding lessons for Mombasa port’s initiative. The selected ports were Tangier in Morroco, Colombo in Sri Lanka and Malta port in Malta.
In all the three ports, transshipment businesses have been simplified to allow faster clearance and approvals using Electronic Data Interchange (EDI). This compared poorly with Mombasa port, where entries and processes were partly done manually thus not being user friendly with shipping lines.
Delaying a ship is very costly and the daily average additional vessel operating costs incurred by shipping lines can range between U$ 20,000 – U$ 35,000 depending on vessel size, a demonstration of how crucial it is for the lines to save time in the shipping industry, Tellah said.
The transshipment bond, which once stood at Sh 100,000 per container, was reduced to Shs 1,000 per container.
Transshipment business is the best bet for the growth of Mombasa due to its strategic location compared to the other regional ports and the expansion undertaken in the recent years. Apart from Dar es salaam -Tanzania, Zanzibar and Tanga and the East Africa Islands of Madagascar, Comoros, and Mauritius, Mombasa port has a huge capacity to serve even a large market.
“The transshipment business gets a huge boost from the port’s capacity to accommodate larger vessels, an advantage Mombasa has compared to Dar es salaam,” Osero said.
The port completed, in 2013, dredging of the channel to accommodate huge vessels with a capacity of up to 6,000 TEUS, a feat Dar es salaam port has not yet achieved. Due to the economies of the scale, a shipping line can use a huge vessel to bring Dar and Mombasa bound cargo to the latter and smaller ships can be used to move the Dar port cargo.
Mombasa port is also better placed than Durban to handle transshipments due to the shorter distance from China and Singapore, a major world exporting country, then smaller vessels can be used to move cargo from the port of Mombasa to ports in the Southern Coast of Africa.
