The Intergovernmental Steering Committee on Ease of Doing Business through the Port Reforms Working Group High-Level Consultative Forum made a raft of recommendations that, once fully implemented, will cut down on the cost of doing business at the Port of Mombasa and improve efficiency significantly.
The conveners of the forum were the Head of State, Dr. William Ruto, the Council of Governors Chairperson Ms. Ann Waiguru, the Cabinet Secretary in charge of the Ministry of Investments, Trade and Industry Mr. Moses Kuria and Roads and Transport CS Mr. Kipchumba Murkomen and Salim Mvurya, CS in charge of Mining, Blue Economy, and Maritime Affairs. Other conveners included Mr. Benjamin Tayari, Kenya Ports Authority (KPA) Chairman, Mr. Anthony Mwaura, Kenya Revenue Authority Chairman, and Captain William Ruto, KPA Managing Director.
In a report released in July 2023, the forum asked both the Government Partner Agencies (PGA) and the private sector to embrace round-the-clock work including the weekends to ensure faster clearance of goods and improve cargo dwell time and ship turnaround.
“National Transport and Safety Authority (NTSA) has not been working over the weekends affecting the clearance of motor vehicle units. The private sector should also comply and take up 24/7 services, especially during the night. This will also facilitate trade and cargo clearance,” the report said.
On non-tariff barriers, the report also recommends minimizing the weighbridges along the Northern Corridor to reduce the transit time along the corridor and make it more competitive. County governments were asked to stop levying cess or any fees on transit trucks to facilitate international trade and improve the competitiveness of the Northern Corridor.
“Cess levied by various counties necessitates transporters to obtain multiple licenses and permits leading to additional costs of doing business,” the report noted.
The report noted that there is a need to review and harmonize charges levied by various shipping lines as well as regulate the arbitrary charges introduced by other cargo interveners, which has made Mombasa port expensive by up to US $ 500 per container, the report noted.
Shipping lines operating in Mombasa port grant 9-day free period for the return of the empty containers for local imports, 30 days for Uganda, and 15 days for Democratic Republic of Congo (DRC) and South Sudan cargo. The ports of Dar Es Salaam, Durban, and Egypt grant more days.
“This makes the port of Mombasa non-competitive and discourages customers from using the facility since they incur demurrage charges due to the shorter free period by shipping lines taking into account the transit distance for DRC and South Sudan,” the report said.
Kenya Maritime Authority (KMA), the industry regulator, has also been tasked to effectively regulate the application of arbitrary and illegal charges by shipping lines. Dar es Salaam port does not charge shippers Terminal Handling Charges, Lift on Lift off (LoLo) while Mombasa port charges US$ 99 and US $ 148 for a 20ft and 40ft container for the former and US$ 30 and US$ 40 for a 20ft and 40ft container respectively for the latter.
Other unique charges levied by the shipping lines in Mombasa port include Container Cleaning Charges, Container Management Fees, Logistics Management Fees, and Equipment Management Fees.
The report also recommends local repair of containers. This has the potential of not only creating local employment but also generating revenue for the country which is currently repatriated abroad.
“Regulation on the charges for container repairs and compensation regime also needs to be set. Today, one would be charged the price of a new container in case of damage to a container that has been in service for years, without depreciation being factored at times,” the report observed.
There is a need to review Customs Auction and disposal guidelines for long-stayed consignments, which is key to decongestion of the port. Currently, there are over 600 long-stay containers at the port’s yard, over 1000 long-stay containers, and 1000 vehicles at various Container Freight Stations (CFSs) in Mombasa.
Kenya Revenue Authority (KRA) was asked to acquire additional drive-through scanners. This will minimize scanning delays and result in efficient cargo off-take at the port of Mombasa.
The government was also tasked to fast-track the passing of the Customs agent’s and Freight Forwarders’ bills to conform to the global best practices.
“The customs regulation bill will lead to enhanced predictability in revenue collection from customs agents improving compliance levels and professionalism,” the report said.
The Federation of East African Freight Forwarders Associations (FEAFFA), the regional apex private sector body of Clearing and Forwarding Agents (CFA) in East Africa, has already supported the development of National bills on the professionalization of the customs clearing and freight forwarding industry among the EAC partner states. The Bills are intended to form the legal backing regulating the logistics sector. They cover key aspects considered critical by industry stakeholders in ensuring a genuinely professional customs agents and freight forwarders sector like other professions. Key among them include the establishment of a Regulatory Board, technical qualification and continuous professional development, Certification and Registration, Obligations and conduct of registered Customs Agents and Freight forwarders, the professional code of conduct, offenses, and penalties, disciplinary proceedings, appeals, and mutual recognition agreements among others.
All countries apart from DR Congo and South Sudan have drafted bills ready to be presented to their respective parliaments for consideration.
There is also a need to eradicate duplication of roles by various PGA. All processes, the report recommends, on cargo intervention should be carried out offsite, and the duplication of the roles at the port by various agencies such as Kenya Plant Health Inspectorate Service (KEPHIS) and Kenya Bureau Standard (KEBs) among other agencies are to be eliminated to avoid unnecessary delays. Interventions should also be intelligence-based, the report recommended.
Currently, various PGAs are carrying out a sampling of imported goods individually to check conformity to set standards. This silo approach at times extends to several days before sample results are released leading to delays in cargo clearance and additional costs of doing business.
The report proposes the establishment of a centralized sampling Centre at the Port of Mombasa and a quality assurance center to be established as a long-term measure. The report condemned a practice by shipping lines to form local subsidiary companies that deal with the clearance of cargo and other logistics in the transport chain. This has the net effect of denying the local players business, warned the report.
On the implementation of preclearance, KRA was asked to allow submission of partial manifest and use of Bill of Lading number for cargo pre-clearance and use manifest for reconciliation as practiced in other ports.
Processing of the C60 by the Ministry of Agriculture and the National Treasury per shipment should be streamlined to eliminate the current delays experienced in processing the same to support pre-arrival clearance.
On exports, it was observed that multiple bonds for tea exports were affecting the competitiveness of the Kenya tea auction conducted in Mombasa, with tea from transit countries such as Rwanda and Uganda contemplating using other auctions in the region.
“Multiple agencies placing holds on various consignments need to be harmonized as it delays the export clearance for the onward loading into vessels, which also affects the port’s operational efficiency and ship turnaround time,” the report noted.
The Kenya International Freight and Warehousing Association (KIFWA) is scheduled to host the Global Logistics Convention in November 2023 in Nairobi. The event is expected to attract over 1000 logistics players from around the world and presents a good opportunity to showcase the country’s capacity in logistics. KIFWA requested the forum to consider supporting the event.
This article was published by the editorial team at FEAFFA. For any enquiries, contact us via Email: editorial@feaffa.com/ freightlogistics@feaffa.com / onionga@feaffa.com Tel: +254733780240
