LOGISTICS

KPA bows to pressure , extends free cargo storage terms

Port users to enjoy longer storage for another 90 days

In Summary

•The storage terms first came into effect on May 18 and ran for three months to August 18.

•The extension is a relief for importers, exporters affected by slow cargo movement mainly at the Malaba, Busia, Namanga borders, exposing them to demurrage charges.

A reach stacker loads containers onto a truck at the newly launched Naivasha dry port.
A reach stacker loads containers onto a truck at the newly launched Naivasha dry port.
Image: / COURTESY

Kenya Ports Authority (KPA) has extended the longer storage period it gave importers in May, to cushion them from effects of Covid-19 on trade along the Northern Corridor.

The storage terms which came into effect on May 18, ran for three months to August 18.

This has been extended by another 90 days, in what the Star has established was pressure from port users, who are still affected by delays mainly for transit cargo to the hinterland, where Uganda is the lead destination.

Led by the Kenya International Freight and Warehousing Association ( KIFWA), the umbrella body for clearing agents, the port users have welcomed the extension, but have faulted KPA for failing to support locals who are the majority port users.

“KPA did not want to extend. We had to push them,” Kifwa national chairman Roy Mwanthi told the Star on telephone yesterday, “It is only reasonable if they support their customers through this tough times.”

The extension now means port users will continue enjoying 15 days free storage for domestic export containers which under the normal KPA tariff, they are allowed nine days free before starting to accrue storage charges.

For anther three months, transit import containers will enjoy 14 days of free storage at the port and the Inland Container Depot-Nairobi(ICDN), from the normal nine.

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

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

“This is in line with our continuous and deliberate efforts of cushioning our customers on effects of the Coronavirus,” acting managing director Rashid Salim had said when he announced the first extension.

 

Storage for domestic import containers, however, remain unchanged where cargoes are stored free for four days, before starting to attract charges.

Importers and exporters incur charges of between $30 (Sh 3,246) and $90 (Sh9,738) per day for cargo that has stayed beyond the free storage period and more than 24 days, depending on the size of the container.

Containers released by KRA and not collected after 24 hours are charged $100 (Sh10,820)and $200 (Sh21,640) per day for 20ft and 40ft respectively.

“We still insists KPA should treat all its customers equally without favoritism. If you look at the extension, though a good gesture, it benefits transit markets and leaves out locals who are the biggest port users. This is aganst the Harbor requirements on fair treatment,” Mwanthi said.

The longer storage period however go along way in cushioning importers and exporters using the Port of Mombasa and ICDs in the country as cargo movement remains affected, mainly with slow clearance at the Malaba, Busia, Namanga borders.

Truck turnaround time between Mombasa and Kampala for instance is currently averaging 10 days from the traditional three to five days, meaning importers are exposed to costly demurrage costs at the port.

The borders have been marked with long truck queues since May as drivers go through Covid-19 tests with some having to be quarantined.

“The situation has slightly improved. It is not like it was a month a go but we still have long queues,” Kenya Long Distance Truck Drivers Association Secretary-General, Nicholas Mbugua, told the Star yesterday.

The cross-border delays occasioned by Covid-19 have increased transport costs between Mombasa and key East Africa transit destinations by between $300 (Sh32, 460) and $1000 (Sh108, 200), with a weaker shilling against the dollar adding more pain.

The increase in the period taken the Kenya Bureau of Standards (Kebs) to inspect and test consignments has also affected cargo clearance at the port of Mombasa.

According to Shippers Council of Eastern Africa (SCEA) , pronounced cross border challenges as a result of Covid-19 pandemic and its containment measures which include testing of drivers, delay in test results, screening and driver self-quarantine result to prolonged transit time.

“The delays at the borders result to an additional cost of $200 USD per day for every extra day taken as per the current transit time compared to the pre-Covid time which was at zero additional cost,”SCEA CEO Gilbert Langat notes.