LOGISTICS

KPA further extends free storage period for containers

Transit export containers to enjoy the longest free period.

In Summary

•The move is aimed at cushioning importers and exporters from possible demurrage charged.

•Importers and exporters incur charges of between $30 (Sh 3,255) and $90 (Sh9,767) per day for cargo that has stayed beyond the free storage period.

Containers at the Nairobi ICD /FILE
Containers at the Nairobi ICD /FILE

Port users will  enjoy longer free storage period for containers as Kenya Ports Authority(KPA) moves to continue cushioning them from the Covid-19 pandemic's disruption of business.

The authority has yet again announced a three-month extension of the initiative first introduced at the height of the pandemic, on May 18, last year and ran for three months to August 18.

It was extended to November 13, and later to March this year to cushion importers, exporters and transporters from the impact of vessel delays due to containment measures, among them mandatory quarantine of crew.

Cross-border trade also faced challenges with truck turn-around time between Mombasa and key destination of Kampala, increasing to above 15 days from an average four days pre-Covid, amid long queues at the Malaba and Busia borders.

This is the time a truck takes to move a container from the Port to Kampala and return the empty, or export container.

In its latest review, transit export containers (from neighbouring countries) will continue enjoying the longest free storage period of 20 days, from the normal 15 days.

Imports to these countries, which includes Uganda, DR Congo, Burundi and South Sudan will enjoy 14 days free storage at the port and the Inland Container Depot-Nairobi for the next 90 days, from the normal nine days.

Please note that the extension period is subject to review after the validity period depending on the business dynamics
 KPA acting managing director Rashid Salim

Domestic export containers have been enjoying 15 days free storage from nine days, which will continue while imports to the local market will enjoy five days free storage until July.

Normally, domestic imports containers are stored free for four days before starting attracting demurrage charged.

Importers and exporters incur charges of between $30 (Sh 3,255) and $90 (Sh9,767) 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 (Sh10,853)and $200 (Sh21,706) per day for 20ft and 40ft respectively.

Please note that the extension period is subject to review after the validity period depending on the business dynamics,” KPA acting managing director Rashid Salim said in a notice yesterday.

The move is a reprieve for imports and exporters who are currently facing delays as a result of a global vessel shortage, which has led to the increase of freight costs.

According to logistics firmBollore , the influx of trade flows from China to Europe and US has led to constrained shipping capacity as well as a shortage of containers.

“In the last six months, the global shipping industry has seen an increase in demand for shipping services as businesses work to recover from the effects of Covid-19,” notes East African Commercial and Shipping Limited, a subsidiary of Bollore Transport and Logistics in Kenya.

Aware of the constraint, Japanese container transportation and shipping company–Ocean Network Express (ONE) has introduced a new weekly service from China to East Africa, calling to the ports of Mombasa and Dar es Salaam.

“One will provide a direct weekly service from China unlike other options currently available in the market, giving East African importers greater flexibility. In addition, ONE will provide their own containers to customers to ensure cargo can be loaded and shipped on time,” East African Commercial and Shipping Limited told the Star yesterday.

On Wednesday, the Shippers Council of Eastern Africa (SCEA) noted that international freight charges have gone up by between 20–25 per cent, signaling an imminent rise in the cost of goods in the country.

According to SCEA, the country and the East Africa region is currently experiencing a shortage of vessels and containers which has contributed to the jump on the cost of shipment.

The council says before Covid-19, it cost an average of $1,400 (Sh151,942 ) to ship a 40ft container from most ports to Mombasa. This has gone up to between $3,600 (Sh390708 ) and $3,700 (Sh401, 561).

“A lot of big carriers have focused on China and Europe with only smaller vessels coming to the East Africa,” SCEA chief executive Gilbert Lang’at noted.