The Kenya Ports Authority (KPA) is currently reviewing stakeholder feedback on a proposed tariff adjustment that has sparked significant concern among traders and shippers. Industry players warn that the planned increases in port charges could negatively impact businesses, consumers, and the overall competitiveness of the Port of Mombasa.
To gain stakeholder approval, KPA has conducted consultations in Mombasa and Nairobi, extending discussions to regional partners in Kampala and Rwanda. The authority seeks to revise fees for at least 25 port services at the Ports of Mombasa and Lamu, as well as Inland Container Depots, with some charges set to rise by as much as fivefold.
The tariff review follows recommendations from Maritime Business and Economic Consultants, a firm owned by former KPA executives, which secured a KSh14.8 million contract to advise on the new pricing structure. The proposed hikes will affect critical services such as pilotage fees, tug services, mooring, port dues, dockage, buoyage, anchorage, fresh water supply, towing, stevedoring, container handling, storage, and penalties. Charges for port access and ferry services will also increase.
Among the key adjustments, minimum vessel charges will rise from $150 (KSh19,387) to $200 (KSh25,850) per call for vessels not exempt or paying an annual fee. Resident vessel fees will increase from $600 (KSh77,550) to $1,000 (KSh129,250), payable in advance. Dry general cargo fees will move from $7.50 (KSh969) per tonne to $8.50 (KSh1,098). Storage fees for domestic cargo exceeding the free period (four days) will see a 20-foot container incur a $30 charge between days five and ten, while a 40-foot container will cost $60. Beyond ten days, penalties will rise to $55 (up from $45) for a 20-foot container and $105 (up from $90) for a 40-foot container. Transit containers will face similar charges, with port pass costs also set to rise, significantly impacting lorry operators.
Maritime Business and Economic Consultants justify the increases by citing rising service provision costs, including fuel, labour, equipment maintenance, inflation, and return on investment. Managing Partner Omae Nyarandi stated that regional comparisons with ports in Dar es Salaam and Djibouti were taken into account.
“These are draft tariff proposals, and stakeholder engagements will inform the final decision,” he said. “Their input is critical in maintaining regional competitiveness.”
Despite this justification, industry stakeholders in the region, led by the Federation of East African Freight Forwarders Associations (FEAFFA), have strongly opposed the adjustments. FEAFFA President, Mr. Charles Mwebembezi, stated that many businesses, particularly those in the logistics sector, are already struggling with reduced trade volumes, stiff competition from emerging logistics solutions, and high operational costs. He warned that the sharp increase in KPA tariffs could lead to the collapse of many businesses.
“The proposed higher tariffs targeting shipping lines will inevitably be passed down to freight forwarders. If the proposals are adopted as they stand, freight forwarders will face significantly higher costs than those outlined in the proposed tariff structure,” he said.
Mr. Mwebembezi urged KPA to consider limiting the overall increase in port tariffs to marginal figures that port operators can more easily absorb.
The Chief Executive of the Shippers Council of Eastern Africa (SCEA), Mr. Agayo Ogambi, urged KPA to reconsider both the timing and scale of the increases, warning of severe cost implications. “Our preliminary analysis indicates that container costs will rise by 20 to 27 percent,” he said. “This will impact imports, exports, bulk cargo, petroleum products, and overall competitiveness.” Ogambi also noted that while KPA has not reviewed its tariffs since 2012, the fact that port charges are denominated in USD has shielded the authority from currency fluctuations. “In 2012, the exchange rate was KSh85 per USD. Today, it’s KSh129,” he stated.
The Kenya Ship Agents Association (KSAA) has also voiced its opposition, arguing that the proposed hikes are excessive and could drive shipping lines away from Mombasa. KSAA contends that KPA has already benefited from currency fluctuations, questioning the need for further rate increases.
“KPA’s expenditures are primarily in USD, while operations are conducted in Kenyan shillings. With the current exchange rate, KPA has already realized a 52% revenue increase without adjusting service fees,” said KSAA’s designated Chief Executive, Elijah Mbaru.
KSAA further questions the justification for these tariff hikes, pointing out that there has been no significant improvement in productivity at the container or breakbulk terminals. Despite a workforce of 7,000 employees, vessels frequently experience labour shortages, leading to operational inefficiencies, Mbaru said.
Additionally, the transshipment rate will increase by 18.75%, contradicting KPA’s goal of attracting more transshipment cargo. Mbaru also highlighted inefficiencies persisting despite investments in gantry cranes, citing a shortage of terminal tractors that impacts operations and rail transfers. Tug fees are set to rise by 90%, and dockage fees by 81%, adding to the burden on shipping lines.
KSAA is urging KPA to reconsider the proposed hikes and instead focus on improving port efficiency, addressing labour shortages, and balancing investments in infrastructure. The association warns that failure to address these concerns could weaken Mombasa’s position as a regional maritime hub.
As KPA continues its stakeholder engagements, businesses are closely monitoring developments, wary of potential cost increases that could ripple through the economy, affecting both businesses and consumers alike.
This article was published by Githua Kihara, an editorial consultant for FEAFFA’s Freight Logistics Magazine. For any inquiries, please contact us via email at editorial@feaffa.com or freightlogistics@feaffa.com, or reach out to Andrew Onionga directly at onionga@feaffa.com / +254733780240.
