LOGISTICS

KPA further extends free storage for port users

This comes amid a vessel and container shortage in the region.

In Summary

•KPA first introduced the extended storage period at the height of the pandemic, on May 18, last year.

•Importers and exporters incur charges of between $30 and $90 per day for cargo that has stayed beyond the free storage period depending on the size of the container.

Containers at the Naivasha ICD/
Containers at the Naivasha ICD/
Image: GEORGE MURAGE

Port users have gotten another three months of extended free storage at Kenyan port facilities in the latest review by Kenya Ports Authority.

They will enjoy up to 15 days free storage for domestic exports from the usual nine, a relief for manufacturers and traders currently grappling with a container shortage amid a disruption on the global supply chain.

This has been occasioned by the shortage on vessels coming to Kenya and the East Africa region which now enters its second month.

Domestic import containers will enjoy a five day free storage period as opposed to the normal four, while transit export containers will continue being stored for free for up to 20 days, up from 15 days.

Transit import containers on the other hand will enjoy free storage of up to 14 days at the Port and the Inland Container Depot( Embakasi).

Normally, these consignments are stored for up to nine days for and start attracting payment on the with the tenth day.

“The extension period is subject to review after the validity period depending on the business dynamics,” acting managing director John Mwangemi notes.

The extension is valid effective July 20 to October 20.

KPA first introduced the extended storage period 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 and further to July, cushioning importers, exporters and transporters from demurrage charges and storage fees.

Importers and exporters incur charges of between $30 (Sh 3,258) and $90 (Sh9,774) per day for cargo that has stayed beyond the free storage period and more than 24 days, depending on the size of the container.

Shipping lines also charge demurrage, a charge payable to the owner of a ship on failure to load or discharge cargo within the agreed time.

It is currently at about $25 (Sh2,715) per container, per day, in case of delays.

Any extended period is a relief for local manufacturers and exporters who say they are not accessing containers to load their goods, amid the vessel shortage.

“This has impacted on the cost of doing business due to increased freight charges as a result of the high demand vis-a-vis low supply of containers within the region,” the Kenya Association of Manufacturers CEO Phyllis Wakiaga told the Star.

International freight charges have gone up by between 20–25 per cent, according to the Shippers Council of Eastern Africa (SCEA).

Logistics firm–Bollore notes that 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,” the firm notes.