The new Managing Director of Kenya Ports Authority (KPA) Captain William Ruto has vowed to work closely with customs to confront what has derailed the port from tapping into an emerging new business line that has led to the growth of the other successful ports.
He has indicated that he will impress upon KRA to simplify their procedures by adopting industry standards practiced elsewhere such as in port Tangier Med in Morocco where 85 percent of the cargo is handled for other ports, translating to 7.17 million Twenty-Foot Equivalent Units (TEUs).
What is mostly needed, according to the new MD is system approval by KRA upon the lodgment of the ship manifest which is done online with KPA to account for the movement of the transshipment containers that are landed at the ports. Shipping lines, according to global standards, are only required to give notifications to the second carrier.
These simple procedures have seen ports such as Singapore and Salala-Oman handle over 90 percent of their cargo as transshipment. Offering competitive storage rates is also another attractive alternative in KPA’s pipeline, according to Captain Ruto.
Mombasa Port handled 1.43 million TEUs in 2021 compared with 1.35 million TEUs handled in the same period in 2020 representing an increase of 75,986 TEUs or 5.6 percent. However, KPA transshipment traffic was at an abysmal level, recording only 220,489 TEUs in 2021 against 175,827 TEUs in 2020.
Lamu Port has the potential of being the biggest competitor to Salalah Port in Oman and Durban in South Africa in the transshipment business. Mombasa port is also better placed than Durban in South Africa to handle transshipments from, Europe, China, and Singapore, major world exporting countries, then smaller vessels can be used to move cargo from the port of Mombasa to others on the Southern Coast of Africa.
Lamu port can attract transshipment cargo for Tanzania, Mombasa, Somalia, the Indian Oceans Islands of Comoros, Madagascar, Seychelles, and South Africa.
Although KPA has strived to market Mombasa as a transshipment hub, the reform to tap into the business has been painstakingly slow. The increased infrastructure at the port of Mombasa- dredging of the channel, rehabilitation of the berths, and the construction of the second container terminal – has increased Mombasa’s port potential to handle more transshipment cargo.
Over seven years ago, a joint task force by the KPA and KRA created a working template to increase the transshipment volume after collecting views from all the stakeholders involved in this trade and recommended a major transformation that once fully implemented would have seen more shipping lines find Mombasa port attractive for transshipment cargo.
The joint task force visited three ports in 2015 each in Europe, Asia, and Africa, close to Mombasa in size, and which have recorded significant growth in transshipment, to gather guiding lessons for the Mombasa port transshipment initiative. The selected ports were Tangier Med in Morroco, Colombo in Sri Lanka, and Malta Port in Malta.
According to the team’s report, one of the major factors of the success of these ports is how they have simplified the processing of the transshipment cargo, a vital lesson that Kenya, which has been associated with the lengthy processes, could embrace. In 2015, when the team visited the three ports, the transshipment process in Malta took less than 24 hours to approve, Colombo and Tangier Med took less than 12 hours, whereas, at the port of Mombasa, it took 8-10 days.
“The shipping business is a complex affair that rides on predictable trends,” Captain Ruto, who was among the team member said.
In all the ports visited transshipment businesses have been simplified to allow faster clearance and approvals using Electronic Data Interchange (EDI). The shipping lines in the three ports are only required to lodge manifest to customs for approval but in Kenya, there were 9 steps involved, which caused further delays and the ship earmarked for delivering cargo could depart without loading the containers.
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, according to the Kenya Ship Agents Association (KSAA).
Also, the ports visited had modern risk management systems that allow them to do advanced risk profiling.
“We have made good gains in enhancing our ICT platforms to accommodate business-friendly processes having collected views from all the stakeholders involved in the transshipment business,” Captain Ruto said.
Kenya has also made a significant stride since the fact-finding mission in the three ports. The Single Maritime Window System went live in June 2021 allowing shipping lines to lodge documents online to significantly improve ships’ clearing and turnaround and thus making vessels processing at Mombasa port paperless.
KenTrade, which runs the online cargo clearing system worked with the Kenya Maritime Authority (KMA) to implement the system that facilitates ship clearance procedures by providing a single online portal for the declaration of information on the arrival, stay, and departure of ships between the shipping lines/agents and the approving government agencies involved.
This article was published by the editorial team at FEAFFA. For any enquiries, contact us via Email: freightlogistics@feaffa.com Tel: +254733780240
