Shipping lines operating through the Mombasa port have been ordered to extend the empty container return period in a move that is geared towards reducing high costs associated with delays along the Northern Corridor.
As the various measures and protocols put in place by the governments, both national, regional and World Health Organization (WHO) continues to ravage the supply chain and movement of the cargo across the borders, Kenya authorities have announced new measures to review cargo clearance process to accommodate these challenges.
The latest gain for importers on the ongoing processes is the recent extension of the return of the empty containers both for transit and domestic cargo at 7 and 3 days respectively.
Importers are supposed to return containers to designated yards in Mombasa within 14 days for domestic cargo and up to 45 days for transit goods, failure to which they start accruing storage charges or what is technically known as demurrage.
Demurrage charges start from $10 (Sh1, 000) per 20-foot container per day after expiry of the free period, and rise daily. While the 40-foot container attracts demurrage of $20 (Sh2, 000) per day, these charges can rise to more than $100 (Sh10,000) per container per day, depending on the number of days the importer stays with the container for which shipping line.
“Under the prevailing circumstances, it is important that delays associated by the cargo clearance and return of the empty containers prior to Covid 19 reflect the circumstances on the ground,” a notice signed last Friday by Kenya Maritime Authority Maj (RTD) Director General George Nyamako reads in part.
The extension period of the return of the empty containers, which took effect on 1st July this year will stay throughout the period of Covid 19, according to the KMA notice.
Last month, Tanzania Shipping Agencies Corporation (TASAC) issued a similar directive. The directive dated 10th June 2020 directs the ship agents to collect demurrage charges for containers destined for land linked countries in order to accommodate challenges associated with the pandemic.
The order extended the period of return of the empty containers for Rwanda through the Rusumo border from 35- 55 days and DRC through the same border from 55 to 80 days. Cargo to DRC through the Tuduma border had seen the return of empty containers extended from 55- 65 days with cargo Zambia enjoying an extension by 10 more days from 40 to 50 days. This was to be effected on all the containers whose delivery order was issued on 15th March 2020.
To the end of achieving reduced transport cost, KMA notice added, Kenya Ports Authority (KPA) was considering extending the free storage period on the domestic cargo as well.
Logisticians in the country have been pushing for storage charges on domestic cargo being reviewed considering that they also faced numerous delays along the corridor just like transit cargo. When importers, clearing agents and transporters sought extension of the free storage period, they had asked for 9 days as opposed to the current four days period.
The cargo dwell time at the ICD Embakasi, where most of the local cargo is cleared averages 6 days, which means that most of the domestic cargo cannot be cleared in time. Recently the Shippers Council of East Africa put that figure at 52 percent.
However, in May this year, KPA extended the free cargo storage period for only domestic export containers that went up to 15 days compared to earlier 9 days.
Transit import containers at the port and ICD in Embakasi enjoy a 14 days free storage period from 9 days with transit import containers in Naivasha enjoying 30 days. Transit export containers now enjoy a 20 days free storage period from the current 15 days. This change would run for a period of 90 days.
Recently, a number of Rwandan containers that had overstayed at Tanzania’s Dar es Salaam were allowed to leave after the ports authority agreed to waive charges and penalties associated with delays in cargo clearance.
Rwanda Private Sector Federation (PSF) Chief Executive Officer Stephen Ruzibiza said that more than 2,000 containers had been released in the past week.
“At least 250 to 300 of the affected containers have been cleared to leave the port on a daily basis ever since the port authority responded to our request to waive the charges, and asked for supporting documentation,” he was quoted in local press.
In addition to the waiver of customs warehouse rent, demurrage and port storage charges and penalties, PSF had requested a 120-day window for evacuation of the containers, indicating that they expected the current delays in movement and clearance of cargo to go back to normal by mid-July.
Region’s importers said Covid-19 measures introduced by respective EAC member states have significantly slowed movement and clearance of cargo in and out of the countries with a likely bearing on the cost of some goods.
The delays manifests at the border crossing where the drivers who get there with the certificates that have expired along the way have to wait for up to 5 days for new results for them to proceed with the journey.
