KPA takes second shot at last-mile cargo plan

Kenya Ports Authority plans to re-advertise the end-to-end logistics tender after the first attempt failed to attract targeted investors. 

This now sets the stage for a fresh storm over the last-mile cargo delivery plan being pushed by the authority, which has been opposed by clearing agents and transporters.

The first tender was  “non-responsive”, according to KPA.

The authority is seeking to partner with shipping lines to deliver cargo, which managing director William Ruto says will weed-out brokers.

Cargoes to landlocked countries will be delivered to the doorstep of a client straight from the Port of Mombasa, either through bill of lading or merchant haulage.

This means shipping lines and KPA will bypass local players in the logistics chain. Foreign-owned shipping lines control 92 per cent of Kenya’s international trade.

According to Ruto, the decision is informed by industry trends where brokers whom apart from increasing the final cost of freight, at most times fail to deliver cargo on time exploit traders.

This leads to high demurrage charges and increased freight costs.

In a telephone interview with the Star, Ruto said the authority is seeking to work with industry stakeholders to ensure port efficiency and smooth cargo delivery.

Most containers, mainly on transit, delay by between four and seven days as a result of a slow clearance process and high truck turn-around between Mombasa and key transit destinations of Kampala, Kigali, DR Congo and South Sudan.

“We are just facilitating,” Ruto said.

Local players however remain opposed to the plan, which they claim is well designed to give a Chinese company and a few other individuals an upper hand over homegrown firms.

KPA has been in talks with Chinese international container transportation and shipping company –COSCO shipping lines, a subsidiary of COSCO Shipping Holdings.

The first attempt was met by strong opposition from the Kenya International Freight and Warehousing Association (Kifwa), which saw KPA call for a stakeholders meeting to forge a way forward.

While it had indicated intentions to drop the plan, management has turned around and opted for a second attempt, a move clearing agents insist will lead to closure of local firms, loss of jobs and loss of revenue to the taxman.

Also threatened is the Standard Gauge Railway freight operation, with over 100 contracts in the SGR last mile operations at stake.

Transporters who ferry goods from the Embakasi and Naivasha inland container depots, after goods arrive by SGR freight, have cried foul over the plans.

Instead of venturing into last-mile, Kifwa says KPA should work to ensure timely and efficient vessel berthing, noting there is currently a 10-day berthing delay on container vessels.

Port users also want the authority to address delays on container loading transfer and scanning.

There are also concerns over high number of theft cases, mainly breaking of seals on containers where consolidated cargo is stolen.

“It should also ensure challenges of online cargo billing that contribute to cargo clearance delays are eliminated and that port users do not pay overnight charges when the systems go down at night,” Kifwa national chairman Roy Mwanthi said.

KPA did not respond to the Star’s inquiry on the alleged cargo theft and vessel delays.

KPA was expected to meet port stakeholders yesterday and today, to iron out issues around the plan.

Local players insist there is “no vacuum” in the logistics sector, to warrant KPA to partner with foreign firms to deliver cargo.

“Both KTA (Kenya Transporters Association) and Kifwa shall use all means at their disposal to resist the move to consign Kenyans to poverty,” Mwanthi said.

The Shippers Council of Eastern Africa however supports KPA, saying the "vertical integration model" will see shipping lines handle freight, local warehousing, clearing and forwarding and last mile cargo delivery, helping improve efficiency.