- Private investors have accused the government of pushing them out of business with cargo evacuation by SGR even as KPA continues to improve port capacity
- Port management says CFSs were needed for a short term-basis to support the port which lacked capacity about ten years ago
Kenya Ports Authority has poured cold water on the cries by Container Freight Stations (CFSs) over being thrown out of business in the wake of increased uptake of cargo by rail.
In what seems to be a nail in the coffin of CFSs based in Mombasa, KPA has said it does not need the facilities.
This is on increased cargo handling capacity at the Port of Mombasa, reduced cargo dwell time, a more efficient Inland Container Terminal (ICD) in Nairobi-supported by the Standard Gauge Railway (SGR) and faster clearing processes at the harbor which have been facilitated by investments in modern technology.
According to the port management, the CFSs were needed for a short term-basis to supplement the port which lacked capacity about ten years ago.
Annual cargo handling capacity has however increased from 250,000 TEU in 2008 to the current above 1.30 million TEU’s in 2018, supported by the second container terminal whose Sh30 billion phase one is operational with a capacity of 550,000 twenty-foot equivalent unit(TEUs).
“Once you become very efficient you do not need any storage facilities. We don’t need the CFSs,” head of corporate affairs Bernard Osero told The Star at the Nairobi ICD over the weekend during a tour of the facility.
“These containers belong to the importers, we want space, cargo is picked immediately it comes at the Port and ICD. CFSs were temporary so they cannot complain,” he added, dismissing concerns that evacuation of cargo by SGR which has reduced volumes to CFSs is killing the economy of Mombasa.
“Mombasa dying…No it is a temporary thing….as long as the port is working, Mombasa is a port city and cargo is coming here. What have you killed? CFSs did not start with the port,” Osero noted.
Port capacity is further expected to increase once phase II of the second container terminal is complete. KPA is currently reclaiming 50 acres of land for the terminal which will add 450,000 TEUs, and a further additional 400,000 TEUs in phase III, managing director Daniel Manduku said.
“We are currently slightly below 30 per cent, we are on schedule, hope to finish this project by the end of 2021. In total we shall have a total of one million TEus at container terminal number two,” Manduku said.
This, in addition to continued investments in modern ship-to-shore gantry cranes among other equipment, has made Mombasa one of the most efficient ports in the region even as total port capacity is projected to be over two million TEUs by 2022.
Direct loading of containers in the SGR to Nairobi, where between eight to 10 cargo trains move between Mombasa and Nairobi every day, has pushed CFSs out of business.
Transporters and CFSs have accused the government of kicking them out of business.
“Hundreds of truck drivers are currently being sent home for lack of business,” Kenya Transporters Association (KTA) chief executive Dennis Ombok told the Star.
Mombasa based businessman and Kenya Trade Network Agency (KenTrade) Chairman Suleiman Shahbal said: “Container Freight Stations have already let go of more than 3,000 people who were employed either directly or indirectly. The transport sector is dead.”
In a quick rejoinder, Osero said SGR can only take 40 per cent of cargo business from the port when optimally operating, leaving the rest to trucks.
“SGR cannot take 100 per cent cargo. However, what we need to do in Mombasa is to invest in the export processing zones, value addition factories and other businesses that can make use of the port,” Osero said.
KPA has projected it will surpass its 1.4 million TEUs target having made one million TEUs with three months to end the year.