Tanzania Ports Authority (TPA) has written to the port’s terminal operator seeking a 100 percent waiver on the Rwanda cargo for fear of losing this market to Mombasa port.
The letter dated 15 July written by TPA Director General Deusdedit Kakoko was addressed to the Tanzania International Container Terminal Services Ltd (TICTS) seeking the operator to consider the waiver.
“Kindly understand TPA has made consideration to grant waivers on storage charges for the containers which were stuck at the Dar es Salaam port,” Kakoko said in the letter.
This was after the TPA received an application from the Private Sector Federation Rwanda (PSF) requesting for waiver from both cargo that had overstayed at Dar port and TICTS.
“In connection to that, TPA supports PSF application because of the stiff competition for the Rwanda cargo and our competitor Northern Corridor has taken advantage of the situation to discourage customers to use the Dar port,” Kakoko added.
TPA enumerated a number of reasons for TICTS to consider. This includes joint efforts by the two agencies in marketing the facility, where the two have been competing for Rwanda cargo.
“In order to counter attack competition, maintain good customers relationship and attract more customers and attract more cargo from this market, TPA is requesting for 100 percent waiver on storage charges for all containers which are stack at the TICTS side,” Kakoko said
A number of Rwandan containers that 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.
The delays were caused by Covid-19 pandemic restrictions.
PSF Chief Executive Officer Stephen Ruzibiza said that more than 2,000 containers had been released.
“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 said.
Mr Ruzibiza added that they were reconciling figures from their members to know exactly how many containers are still stuck at the port so they can work towards securing their clearance.
“We are talking to the importers and the cargo owners, and we have given them the whole of next week to indicate to us how many of the containers are remaining,” he a week ago.
Initially, the chamber of commerce and services put the figure of overstayed containers at 2,067 with Dar es Salaam port accounting for 2,000 while another 64 were stuck at Kenya ports of Mombasa and Naivasha ICD about 2 weeks ago.
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.
On its part, the Kenya Maritime Authority (KMA) also extended the penalty-free period containers in transit at the port of Mombasa and along the Northern Corridor in its notice dated July 3.
According to the notice, all cargo currently held at the ports will enjoy extra seven days of free demurrage penalties effective July 1.
“The decision will be valid until the Covid-19 pandemic challenges subside,” it reads.
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.
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 (KSh1, 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 (KSh2, 000) per day, these charges can rise to more than $100 (KSh10,000) per container per day, depending on the number of days the importer stays with the shipping line’s container.
“Under the prevailing circumstances, it is important that delays associated with the cargo clearance and return of the empty containers prior to Covid 19 reflect the circumstances on the ground,” a notice signed by the former KMA 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.
The two cases were a major victory for the Federation of East African Freight Forwarders Associations (FEAFFA), an umbrella body of the region’s clearing agents, which has been at the fore in the region in seeking to engage regional authorities on issue causing delays in supply chain that come with high associated costs.
Private sector players had also written several letters to the two port authorities seeking extension of free storage period for domestic cargo to from 4 to 14 days and from 9 to 21 days for transit cargo.
“We welcome the recent concession by the two ports. It will now offer some reprieve and allow our members to carry out their business operations smoothly with costs to shippers descending and eventually benefiting the end user,” FEAFFA President Mr. Fred Seka told Freight Logistics in a recent interview.
The Tanzania Freight Forwarders Association (TAFFA), Kenya International Freight and Warehousing Association (KIFWA) had also lobbied for this reprieve citing delays in arrival of original commercial documents required for cargo clearance, which are traditionally moved by air were heavily affected by closure of international airports.
“Border efficiency has reduced due to a reduction in manpower by the trade facilitation agencies, introduction of additional procedures such as testing for COVID19, reduced working hours, restrictions on the movement by customs agents among others,” concluded the letter.
