Why cost of imports through Mombasa will rise

Unease among Kenya Ports Authority workers and extra charges by two shipping lines threatens to drive the cost of imports through the roof. 

KPA is conducting a headcount of its 7,000 workers following complaints from importers and ship operators over mounting congestion at the port, a move that has caused anxiety in the workforce.

According to the circular issued by KPA’s top managers, the headcount is intended to root out ghost workers, find out labour shortfalls and address the problem of absenteeism blamed for the congestion.

KPA acting Managing Director Rashid Salim admitted there was a problem with the port’s workforce and said the management is working to address it.

“Some of the issues raised by workers will be addressed in the ongoing negotiations for the new Collective Bargain Agreement (CBA),” Salim said.

At the same time two main shipping lines slapped the facility with extra charges for the delay and reviewed the tariffs upwards. In a notice to importers, dated March 3, Maersk which controls over 40 per cent of the volume of business through the port said its new tariffs will come into force on April 1.

“Maersk shall revise the Import Demurrage & Detention terms in Kenya effective from 1st April 2021,” stated a notice from Maersk to all its customers using the port of Mombasa.

On February 19, this year, another shipping line, CMA CGM, based in France, announced similar penalties saying the port was experiencing congestion that delayed ships.

The liner said that all cargo from all over the world will pay an extra Sh45,000 for a 40ft container and Sh22,500 for a 20ft container. The liner has, however, suspended the surcharge.

The importers’ umbrella body - Shippers Council of East Africa (SCEA) Executive Officer Mr Gilbert Langat yesterday said all the extra costs will ultimately be passed on to the end consumers.

According to the Dock Workers Union (DWU) General Secretary Simon Sang’, the workers’ bone of contention is overtime especially for those in the operations department.

Sang said the overtime was drastically reduced by the management which capped it at 30 per cent of the employees’ salary. Initially, all extra work hours were compensated by the management.

Other workers interviewed said the management’s decision to also scrap the annual bonus has affected their morale which is also to blame for the delays at the port.

“For the first time in many years, the poor performance is attributed to staff’s low morale which has been caused by how the overtime policy is being implemented. Ships have been in the stream waiting and it will take time to clear the cargo,” Sang noted.

Sang said KPA’s decision to sack 45 workers who complained about the nonpayment of the overtime dues could have also led to a go-slow.

“Last month, up to 11 ships were kept waiting, and this led to protests from a number of shipping lines,” said Sang adding that the rift between the Human Resource department, operations department, and the workers' union has worsened the situation.

Salim assured employees that the management was looking at the overtime policy to address their complaints.

“We are working on human resource policy to address the overtime issue in the port and present it to the KPA board to consider it so that we fix this issue,” he added.

Salim, however, said congestion was also caused by the arrival of many ships after the ban on imports caused by the Covid-19 pandemic was lifted. 

SCEA’s boss Mr Lang’at confirmed that the shipping lines had suspended the plan for extra charges but said they were monitoring the movement of cargo at the port to state their next move.