OUTCRY

Clearing agents accuse shippers of frustration

Calls for boycott of some companies.

In Summary

•They have cited huge delays in generation of local shipping charges and payment confirmations, due to the exercise being done outside the country.

•There are also delays in processing delivery orders and refunding container deposits despite return of empty containers.

Clearing agents during a past demonstration on the free container storage period, outside one of Nairobi ICD administration blocks/FILE
Clearing agents during a past demonstration on the free container storage period, outside one of Nairobi ICD administration blocks/FILE

Clearing and forwarding companies in Kenya are accusing a section of shipping lines and agents of unfair business practices leading increased cost of doing business.

This comes even as Kenya shifts into the Maritime Single Window System, in compliance with the International Maritime Organisation rules.

The system is used to electronically prepare and submit vessel pre-arrival and per-departure declarations to government agencies at the Port of Mombasa, which helps reduce vessel delays and expected to save traders from demurrage charges.

Through the Kenya International Freight and Warehousing Association (KIFWA), clearing agents have cited huge delays in generation of local shipping charges and payment confirmations, due to the exercise being done outside the country.

There are also delays in processing delivery orders and refunding container deposits despite return of empty containers, which Kifwa says is “sabotaging clearing agents financially.”

Shipping lines are also refunding container deposits in Kenyan shillings while the same was paid in US Dollars, hence making gains on the exchange rates.

“Demand for huge container revolving deposits is also frustrating cargo clearance process,” Kifwa National Chairman Roy Mwanthi says in a notice to clearing agents, as he calls on them to boycott shipping lines that are frustrating clearing processes.

“We urge clearing agents to advice clients accordingly on preferred lines that facilitate faster release process and have demonstrated willingness to facilitate trade,” Mwanthi says in the notice.

While there has been calls for removal of container deposit charges, cost  vary from $1,000 (Sh107,950 ) and $4,000 (431,800) depending on the size of the container.

A recent study by the United States Agency for International Development on the impact business to the landlocked countries, with an example of Rwanda, indicates goods delivery from Mombasa to Rwanda takes two weeks on average.

However when the imported goods reach Mombasa, companies may not have available cash to make container deposits.

“It can take an additional two to four weeks to actually make the cash deposit. Thus, some products may expire even before they get into the Rwanda market,” the study reads in part.

Kenya Ships Agents Association (KSAA) however said only one shipping line has had issues which are being resolved.

“It is now the clearing and forwarding agents to give us feed back in a week or so if the challenges still exist, but as far as the matter is concerned, it has been addressed,” KSAA assistant executive Aziza Mwanthi, told the Star on telephone.

While she acknowledged amounts given for container deposits are high, she said the association which has 42 agent members continues to engage the regulator(KMA), and industry players, to resolve any issues affecting shipping and logistics in the country.

“The industry is ours and we will always intervene whenever there is an issue,”she said.

Kenya Ports Authority (KPA) handles more than 30 vessels a week, on average,  with the Port of Mombasa having an annual cargo throughput of more than 1.4 million TEUs, serving the local and transit markets of Uganda, South Sudan, DR Congo, Rwanda and Burundi.

This however dropped to 1.360 million TEUs last year, attributed to disruptions on the global supply chain caused by the Covid-19 pandemic.

Cargo dwell time at the Port of Mombasa has nevertheless improved from an average of 5.6 days in December 2020 to 4.6 days this year.

Kifwa represents over 1,200 licensed clearing agents mainly operating in Mombasa and the Nairobi and Naivasha Inland Container Depots.

According to Kifwa, the challenges being witnessed including the delays in releasing container deposits, end up eating into the shipments' free days offered by the shipping lines, ports authority and container freight stations.

“Our many engagements with various shipping lines, agents and the regulator, Kenya Maritime Authority, in trying to mitigate the same have borne very little fruit, “ Mwanthi notes, even as he confirmed continued engagement with port stakeholders to resolve the existing challenges.

Last year June, KMA asked shippers to increase free days for containers to cushion importers and traders from high demurrage charges arising from delays in cargo movement due to the Covid-19 pandemic.

Importers are charged a minimum of $25 (Sh2,660) per container, per day, in case of delays.

KPA has been keen to cushion traders by allowing longer free storage period at the port facilities, with transit containers enjoying up to 20 days free storage from a normal 15 days.

Importers and exporters incur charges of between $30 (Sh 3,238) and $90 (Sh9,715) per day for cargo that has stayed beyond the free storage period and more than 24 days, depending on the size of the container.