Outcry as KPA hits importers with 20pc hike in port tariffs

Kenya Ports Authority gantry cranes offload containers from a ship and onto trucks. [Maarufu Mohamed, Standard].

Kenya Ports Authority (KPA) has slapped importers with a 20 per cent increase in tariffs, which is expected to raise the cost of imports.

The review will also tighten the free storage period that KPA allows importers at the port of Mombasa.

Interviews with importers revealed that the proposed changes in all the tariffs at the port will also affect the Inland Container Depot in Nairobi (ICDN).

Shippers Council of East Africa (SCEA) Chief Executive Mr Gilbert Langat said the extra costs will ultimately be passed on to consumers, adding that the KPA board has notified port users of its intention.

SCEA is a regional lobby for cargo importers.

“This is not the time for the review of tariffs. We are starting to recover from effects of Covid-19. It is like KPA wants to raise revenue through penalties,” said Mr Langat.

“It is sad that importers have no slot in the KPA board.”

In an email to port users, KPA said the tariffs were last reviewed in 2012 and that since that time, changes in the business environment have affected delivery of port services.

One of the contentious issues is whether the free storage period should be increased or reduced. Importers say State agencies that delay the clearance of cargo should pay the fines.

Currently, the free storage period for a 20-foot and 40-foot domestic container is four days. At the end of that period, importers are charged for each extra day the container is at the port.

In a memorandum to the KPA board, importers want the free storage period increased to six days. They argue that only 40 to 50 per cent of cargo at ICDN is cleared within the current free period of five days.

“Free days should not include weekends. Save for KPA, other State agencies don’t work on weekends,” says the proposal from SCEA to KPA.

The council has also opposed KPA’s proposal to restrict the free storage period for transit import to nine days, saying it should be increased to 14 so that Mombasa can attract transit business.

According to Mr Langat, the volume of transit business to Uganda and Rwanda has dropped due to increased competition from the central corridor that is anchored to the Port of Dar es Salaam.

He said delays occasioned by State agencies account for about 60 per cent of all containerised cargo imported under the Through Bill of Lading (TBL), mainly due to inefficiency.

“Shippers should be charged for mistakes they are responsible for and not charged for mistakes committed by government agencies,” he said.

SCEA said the tug charge levied at the port of Mombasa was also higher in comparison to other ports in the region and should be reduced by at least 10 per cent.

Fiercely opposed

Yesterday, Shipping and Logistics established that the KPA proposals, which have been fiercely opposed by port users, are expected to be adopted by the board. KPA officials did not reply to our inquiries.

Yesterday, importers and customs agents expressed fears that KPA could bulldoze the implementation of the new tariffs.

Mr James Kariuki, a custom agent, said KPA should stop its tendency of seeking to raise revenue through penalties.

“KPA proposals aim at punishing traders for mistakes committed by either State agencies or other cargo players. It cannot continue to rely on penalties to raise revenue,” he said.

Mr Langat said KPA should shelve the proposal until the economy recovers from Covid-19 disruption.

“More specifically, the free period for cargo storage should be well defined,” he said.