State plan to end cargo clearance delays in ports

A section of Mombasa Port terminal 2 on April 4, 2023. [Omondi Onyango,Standard]

All government agencies involved in clearance of cargo at major ports in the country will now be required to operate on a 24-hour basis to end delays, President William Ruto has ordered.

State agencies and some financial institutions involved in the clearance have in the past resisted attempts by cargo agents who have continually lobbied for the clearance to be made a 24-hour exercise.

President Ruto, during his five-day visit to the coast, said his directive will lead to a seamless cargo clearance process and propel ports to be paperless logistics hubs.

Trade analysts along the Northern Corridor interviewed by Shipping and Logistics said Ruto's directive will end congestion at the ports.

They said the 24-hour operation will bring down the time taken by shippers to clear cargo from the port, meaning little demurrage and storage costs will be incurred.

Clement Ngala, a customs agent, said the 24-hour' operation will enable cargo agents to clear cargo from the port within two days down from five-to-nine days.

Ngala said for the last 10 years, port stakeholders have been lobbying for a 24/7 port operation schedule.

"This has however been resisted by state agencies and some financial institutions involved in cargo clearance," he said.

"Mombasa Port will now be more competitive especially with pre-clearance."

Pre-clearance is the electronic submission of relevant goods and cargo declaration data and documents to customs and other government authorities before the actual arrival of goods.

Aisha Kombo, a freight logistics expert, said the president should have introduced the 1983 pre-Arthur Magugu time principle where whoever causes delays pays for the extra costs.

"Some delays are caused by port users who submit cargo clearance documents late. Others are caused by inefficient regulatory agencies not in a hurry to process documents because it does not cost them a dime," said Ms Kombo.

She said pre-clearance and 24/7 operation policies would end delays at the port and make it cheap to operate from Mombasa.

"Ports and their deports are not a storage area but a transit point. Ports make money through throughput," she said.

Ngala said once shipping lines have received the electronic cargo-manifest, they are supposed to share it with customs and clearing agents to facilitate the processing of documents before the ship docks.

"With the world going digital, state agencies must also change and embrace electronic manifest for clearance of goods at the port," said Ngala.

He noted that pre-arrival payment of port charges, pre-arrival customs charges, and other charges will enable clearing agent to clear the cargo immediately after the ship docks.

Other port users said there was need for the industry regulator, Kenya Maritime Authority, to interrogate some of the charges levied in Mombasa but not in other ports around the world.

The levy for cleaning empty containers and deposit for the security of the container is specifically controversial since it makes Mombasa expensive compared to Dar.

Other charges shippers want eliminated included the delay order fee, Terminal Handling Charges (THC), lift on or lift of charges, container handling charges, and administration fees.

Others are equipment management fees, handing over fees, container freight service charges, manifest correction charges, bill of lading amendment charges and container demurrage charges.

"Removal of extra costs will bring down the cost of trade and commodity prices," said Peter Ambati, a cargo agent.

During the coastal tour, the president directed Kenya Ports Authority (KPA) to find out how to sort out the problem of the $2 (Sh285) levied on every tonne of grain bulk handled at the port.

He made this order after Cereals Millers Association spokesman Salim Mbarak argued that the levy has led to the high cost of flour in the country.

Mbarak said bulk oil imports and other cargo are not charged the levy.

"Grain handlers at the port are now using technology that has made clearing grain bulk cheap and quick," stressed Mbarak.