Mombasa port users are worried that rampant flouting of maritime regulations by some shipping lines in cahoots with port officials puts at risk the port’s standing as main gateway to East and Central Africa.
They claim that some shipping lines have introduced arbitrary charges without the approval of the Kenyan Maritime Authority (KMA), with some charging up to $1,200 for a 40-feet container, more than what Tanzania’s Dar es Salaam port charges.
This has been blamed for the sustained flight of customers, resulting in a decline in cargo throughput in Kenya. The cargo handled through Mombasa in 2022 shrank 1.9 per cent to 33.9 million metric tonnes, from 34.6 million tonnes in 2021, despite container traffic increasing marginally to 1.45 million 20-feet equivalent units.
Mombasa feeds the Northern Corridor, which stretches about 1,700km from the port through Kenya, Uganda, Rwanda, Burundi and the eastern Democratic Republic of Congo (DRC).
But the port stands to lose out to the 1,300km Central Corridor, which runs from Dar es Salaam through Tanzania mainland to Rwanda, Burundi, Uganda and eastern DR Congo due to the punitive charges.
According to documents that The EastAfrican has seen, major shipping lines have been charging equipment management fee, ex-border charges, late documentation per bill of lading fee, container cleaning fee, import documentation fee, all amounting to about $1,200 per 40 feet container, charges that the Tanzania Shipping Agencies Corporation revoked in its bid to make the Dar es Salaam port competitive.
Roy Mwanthi, Kenya International and Warehousing Association (Kifwa) national chairman, has accused shipping lines of colluding with some government officials to charge the fees on transit cargo, with containers destined for the DR Congo and South Sudan targeted.
“A number of shipping lines have increased rates of demurrage on transit containers to DR Congo and South Sudan while reducing demurrage-free days to only 15 days,” Mr Mwanthi charged.
He said the demand for high container deposit for transit containers to the two EAC partner states has also been high, with some vessel owners demanding up to $30,000 as replacement value for reefers before release, and demurrage rate of $250 per day for 40-feet containers.
Cost of business
“We estimate $10 million is being held by shipping lines as revolving deposit, which has affected micro, small and medium-sized enterprises and which is punitive, forcing them to seek alternative ports, and in our case, Dar es Salaam,” Mr Mwanthi said.
KMA Chairman Hamisi Mwaguya, while acknowledging that some shipping lines have made Mombasa port expensive with these charges, said some have been warned against flouting the law and their operating licences could be revoked.
“We cannot have a shipping company charging container cleaning fee, ex-border fee and higher demurrage charges against the set average. We have checked and this has been happening for the past five years. The government is working to rectify the error,” Mr Mwaguya told The EastAfrican.
“Some shipping lines have been circumventing law to have their clearing and forwarding companies contravene local content requirements. We want Mombasa port to be a world-class port, but this cannot happen with additional charges on top of the freight costs.”
A technical team has been formed to streamline a number of issues raised during a meeting between President William Ruto and logistics stakeholders in July this year.
Among the 21 items identified by President William Ruto, which he wants urgently addressed, is overcharging of importers and illegal levies between government agencies, which have contributed to making the port unattractive to more users.
President Ruto ordered that the issues to be addressed before the end of this month and this week, stakeholders were in meetings in Mombasa to resolve them.
Kenya has since reduced the number of weighbridges for transit goods, which are now weighed twice — at loading and while leaving Kenyan territory.
But some issues remain. This week, it emerged that there has been delays in generation of local charge invoices, as some shipping lines generate them from outside Kenya.
Some firms operating at the port do not recognise Kenyan bankers’ cheques.
To resolve the issue, the committee recommended to KMA to only allow shipping lines that generate invoices and receipts locally to save time, arguing that they should be compensated in the demurrage-free period.
Clearing and forwarding companies have also complained about unapproved charges where, in the past three years, shipping lines have been levying additional charges that have increased the cost of doing business at the Mombasa port.
The Kenya Transporters Association (KTA), Kenya Long Distance Truck Drivers Union and truck owners have warned that the government might lose revenue as the increased cost of fuel will have a direct impact on business at the port.
“As transporters, we have contracts with different manufacturers and it will directly affect costs, which will be reviewed upwards,” said KTA Chief Operating Officer Mercy Ireri.
“At the moment, the cost will hit transporters hard, since clients are not willing to review their contracts as a result of new fuel prices,” she added.