Shippers call on government to allocate incentives for sea freight

 

Some of the newly acquired ship to shore Gantry Cranes that are being offloaded at the Port of Lamu in Lamu County on April 13, 2024. [Kelvin Karani, Standard]

Shipping stakeholders have called on the government to allocate incentives that will attract more investors in sea freight.

Shippers Council of Eastern Africa (SCEA) acting Chief Executive Officer Agayo Ogambi said currently Mombasa Port is strategically positioned with enough plug-in points for reefer containers.

Speaking after the launch of the Global 2023 Horticulture report earlier in the week, Mr Ogambi said the sector contributes about Sh150 billion which is 23 per cent of the GDP and thus there is a great need for the government to put policies and interventions in place to support it.

“The current problem we are facing is the trade imbalance. For every five containers that come in, only one goes out as an export which has also caused uncompetitive prices. We are in discussions with stakeholders to see how these imbalances can be resolved for competitive prices,” said Ogambi.

Mr Ogambi said the current hostile situation in the Red Sea has also had a massive impact on the sea freight which has increased travel time by 10 days.

“The increased travel time has resulted in an increase of about $200 on every reefer container. This also means that by the time the produce gets to their final destination, they will not be in good shape,” he said.

Shippers Council of Eastern Africa (SCEA) acting CEO Agayo Ogambi. [Courtesy]

His sentiments were echoed by Acting Deputy Director Horticultural Crops Directorate Dr Jacqueline Chesaro who said the shippers should enter into negotiations that will reduce the shipping prices.

“The government is well aware of the situation in the Red Sea and the concerns about the cost of freight both in the air and sea. However, for us the prices are what makes business sense and thus why we encourage freighters to negotiate for lower shipping prices,” said Chesaro.

She said as opposed to the Egypt and Europe route, produce now has to go through South Africa resulting in longer sea duration.

Former Agriculture Principle Secretary and AGRA Vice President Hamdi Boga said the government should move swiftly and address concerns about multiple levies.

“Meanwhile, all we need to do is be responsive to global changes driven by climate or food safety changes. We must as a country learn not just to produce but produce for a market which can be made possible if we understand market dynamics,” he said.