Cargo pile-up looms as port users protest container charges

A cargo pile-up is imminent at the Inland Container Deport -Nairobi as shippers, importers and clearing agents protest new container verification charges coming into place today.

The Kenya International Freight and Warehousing Association (KIFWA) yesterday said Kenya Ports Authority(KPA) must honor a 2013 court order it secured against Container Freight Stations(CFSs) charging verification fees.

This is a charge for stripping of containers during 100 per cent verification, which mainly comes at the request of Kenya Revenue Authority and the Kenya Bureau of Standards(Kebs) when they seek to verify cargo suspected to contain contraband, mis-declared goods or under-declared goods.

KPA plans to start collecting $80 (about Sh8,530 ) as a verification fee for a 20-foot container while a 40-foot container will attract a fee of $120(about Sh12,795).

"Kenya Ports Authority has outsourced labor for this purpose to ensure a reliable and steady supply of labor,” Peter Masinde, head of Inland Container Depot, said in a customer notice to stakeholders.

Both Kifwa and the Shippers Council of Eastern Africa(SCEA) have however dismissed the charges, which now puts them at loggerheads with KPA with a possible go-slow by clearing agents.

“We are opposed to the charges, "Kifwa national chairman Roy Mwanthi told the Star yesterday.

Though he did not reveal the association's next move, he did not rule out a strike by agents.

"At the moment all we want is KPA to revoke the charges. We want them to honor the same court order they secured against CFSs," Mwanthi said.

He said the charges will push up the cost of doing business, which will hurt imports.

SCEA chief executive Gilbert Langat argues that KPA tariffs have a component on handling which includes the verification charges.

“The position of SCEA is clear. If the charge is to be introduced, then it must go through the normal tariff review,” Langat told the Star.   

He added that charges must not be passed on to importers or cargo owners if verification has been requested by state agencies.

“If the service is being provided on the request of the shipper we have no objection. if it's a request by any agency, then they should take up the cost,” Langat said.

There are also concerned that teams used to strip containers are paid an average Sh2,000 per container, which is way below what customers are being charged.

“We are concerned that some unethical practices may arise to increase the numbers targeted. We have been through this before in CFS allocation. How transparent are our systems?” Langat posed.

“ Any introduction of charges even at this time we are facing Covid-19 would be expensive, and may cause serious challenges to the industry,” he added.

It is the second time KPA is re-introducing the charges this year after a botched move in February, where it had contracted Mercantile Cargo Terminal Operations Limited to provide container 

On February 18, more than 600 clearing and forwarding firms, majority operating at the Inland Container Depot-Nairobi(ICDN) paralysed operations at the KPA's Embakasi facility protesting the charges.

The country has over 1,000 registered clearing agents and 43 shipping agents playing a critical role in cargo handling, hence a fall-out could paralyze port operations in the country.

ICDN is currently the biggest clearing and forwarding base after government influenced  container haulage by SGR to Nairobi, from the Port of Mombasa.

It receives an average six-SGR cargo trains per day and about 38 weekly, bringing in about 3,000 TEUs every week.

When operating optimally, Africa Star Railway Operation Company (Afristar), the contracted operator of both the Madaraka Express and SGR freight service operates nine cargo trains with 44 wagons daily.

An average 200 to 300 containers are verified everyday, according to KPA.

“It depends with the government agencies. It can be more or less,” Masinde told the Star.