LOGISTICS

Importers worry over delays at Nairobi ICD

Only 40% cargo is cleared within free period

In Summary

•60% of cargo attracting storage charges as a result of delays clearing processes.

•Delays blamed on reduced operating capacity by government agencies and restrictions to access the facility in wake of Covid-19.

Some of the containers yet to be collected at the Embakasi Inland Collection Depot. PATRICK VIDIJA
Some of the containers yet to be collected at the Embakasi Inland Collection Depot. PATRICK VIDIJA

Importers and clearing agents are worried delays in cargo clearance at the Inland Container Depot-Nairobi are increasing the cost of doing business even as Covid-19 continues to negatively impact trade.

Only 40 per cent of cargo is cleared within the four-days free storage period, the Shippers Council of Eastern Africa (SCEA) has said.

The remaining 60 per cent incur storage charges of between $30 (Sh 3,213) and $90 (Sh9,639) per day, per container, adding to the cost of import and last-mile transportation.

 

According to a survey by the shippers council, ICD Nairobi performance in import logistics efficiency deteriorated between January and May.

This was as a result of reduced operations by most senior personnel of Kenya Ports Authority(KPA), Kenya Revenue Authority(KRA), and other government agencies, who are partly operating from home and office.

This has affected decision making, SCEA notes in its report.

There is also a reduced number of middle and junior officers to process cargo with partly the same customs cargo clearance framework and partly online process.

“Customs clearance of cargo requires physical interaction either for verification or release hence certain customs functions could not be performed with remote control,” SCEA chief executive Gilbert Langat notes.

Clearing agents are also not allowed to access offices of KPA, KRA, and other government agencies to solve problems unless they have obtained prior permission from officers concerned over the telephone or by email.

“If the officers concerned are busy with other work they will not pick a call for quite some time, thus delaying the clearance process,” SCEA says.

 
 

The Kenya International Freight and Warehousing Association ( KIFWA) yesterday confirmed clearing agents are finding it difficult to conduct business.

“The office block for agents has been locked up,” national chairman Roy Mwanthi told the Star on phone.

There are also challenges in the implementation of the customs online working environment where for example, there is no time frames attached for action and no real-time feedback to stakeholders on the progress of clearance of their goods.

Reduction of working hours for essential services providers, the number of clearing agents allowed to access the facility, and reduced KPA shifts from three to two has also affected cargo uptake.

“The processes have been affected due to Covid-19,” Mwanthi said.

There is also limited and lack of supervision (human resource).

While most cargoes used to be cleared within zero to four days(within the free storage period), it now takes an average of five to six days, users say.

KPA has however said operations have been running smoothly despite challenges associated with measures to contain the spread of Covid-19.

“We have not experienced any delays for over a month,” KPA head of corporate affairs Bernard Osero told the Star

KPA in May extended free storage period for importers and exporters for 90 days, in view of the slow truck turn-around occasioned by the impact of the Covid-19.

However, it was mainly in favour of transit goods, leaving out domestic imports.

Free storage for domestic export containers was increased from nine to 15 days.

Transit import containers are allowed 14 days of free storage at the port and the Inland Container Depot-Nairobi(ICDN), from a previous nine.

Transit import containers at the Naivasha ICD have a 30 days free storage period.

All transit export containers are now being stored for 20 days free of any charges from the previous 15 days.

“Please note that the extension is valid for 90 days from the effective date and is subject to review thereafter depending on the business dynamics,” KPA acting managing director Rashid Salim said when he issued the directive.

Containers released by KRA and not collected after 24 hours are charged $100 (Sh10,710)and $200 (Sh21,420) per day for 20ft and 40ft respectively.

Mwanthi has since accused KPA management of favouring “some port users” and “destinations.”

“We must treat all port users equally whenever we have an opportunity to review the tariff,” he said.

Transit cargo is however the most affected by delays in the wake of measures to curb the spread of Covid-19, mainly with slow clearance at the Malaba, Busia, Namanga borders.

Cargo clearance into Uganda and other hinterland countries dropped by more than 50 per cent in April-May, a survey by African e-logistics firm–Kobo360 indicates.

This has been pegged on the mandatory coronavirus testing at the Kenya-Uganda borders.

While it used to take between four hours and 24 hours to clear a track, it now takes 36 hours to 48 hours.

This has affected truck turn-around time between Mombasa and Kampala, top transit destination, which has increased from an average four days to 10 days.

This has pushed up transport costs between Mombasa and key East Africa transit destinations by between $300 (Sh32, 130) and $1000 (Sh107, 100).

The Malaba and Busia borders have about 800 and 500 trucks crossing every day respectively.

Local players have argued that domestic cargo is also affected by short working hours by KPA, KRA, banks, and shipping lines.

Shippers and clearing agents had suggested 10 days free cargo storage period for local imports.

Last week, Kenya Maritime Authority issued a directive, effective July 1, asking shipping lines to extend the free period on the return of empty containers by an additional seven days and three days for transit and local traffic respectively.

Most ships give between 11 and 14 days before containers start attracting demurrage charges of an average $25 (Sh2,674) per container, per day, for delays.

Demurrage is a charge payable to the owner of a chartered ship on failure to load or discharge the ship within the agreed time.