Kenya Ports Authority (KPA) has in the recent past developed standard operating procedures for handling clearance of transshipment cargo, a move that has seen the port register a growth of 87.3 percent last year.
The transshipment cargo grew to 197,272 Twenty Foot Equivalent Units (TEUS) from 105,333 registered in the same period in 2018. This year’s projections are put at over 200,000 TEUS.
The increased infrastructural development and cargo handling capacity is driving KPA move to make transshipment business the next frontier of business growth, said KPA Managing Director Arch. Daniel Manduku.
There have been major reforms since 2015 to create a favourable environment to attract more transshipment cargo. This move has been accelerated by the development of the Lamu port, which has completed its first berth, which is expected to handle transshipment cargo once it is commissioned. Maersk Shipping line has already committed to dock the first vessel once the facility is commissioned.
A joint task force by the KPA and Kenya Revenue Authority (KRA) was initiated in 2015 to lead reform campaign geared towards removing all the bottlenecks that made shipping lines shy away from using the strategically located Mombasa port as a transshipment hub.
Dar es Salaam, Pemba, Mogadishu and Mauritius are Kenya’s main transshipment market for Mombasa port. “We are geared towards booming business in transshipment segment following growing interest by shippers due to improved services,” said Manduku.
The joint task force that led reforms visited three ports each in Europe, Asia and Africa, close to Mombasa in size, and which had recorded significant growth in transshipment, to gather guiding lessons for Mombasa port initiative. The selected ports were Tangier in Morroco, Colombo in Sri Lanka and Malta port in Malta.
The team found out that one of the major factors of the success for these ports was the manner in which they had simplified the processing of the transshipment cargo, a vital lesson that Kenya, which had been associated with lengthy process, has now embraced.
Transshipment process in Malta takes less than 24 hours to approve, Colombo and Tangier takes less than 12 hours, whereas at the port of Mombasa, it took 8-10 days.
In all the ports visited, 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 manual. 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 Juma Tellah the Kenya Ship Agents Association (KSAA) in an earlier interview.
Also the ports visited had modern risk management systems that allowed them to make advance risk profiling
Due to the simplified processes of handling the transshipment cargo, the three ports have recorded impressive growth of handling transshipment cargo. Colombo handled a total throughput of 4.3 million Twenty Foot Equivalent Units (TEUS) in 2013 with 2.5 million going as transshipment cargo. In the year that followed, the port’s total throughput increased to 4.9 million TEUS and transshipment volumes even grew more to stand at 3.7 million TEUS.
Malta recorded total throughput of 2.75 million TEUs in 2013 and transshipment volume was 2.48 million TEUS. In 2014, it handled a total throughput of 2.9 million TEUs and transshipment cargo took 2.6 million TEUS. Tangier recorded a total throughput of 3.2 TEUS in 2014 with 3.0 constituting transshipment cargo.
This compares poorly with the Mombasa port. In 2013, the port handled 894,000 TEUs with transshipment cargo recording 16,269 TEUs. In 2014, the port handled a total of 1,012,002 TEUs.
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