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Jan 25

Kenya: Clearing firms lay out terms for SGR freight

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Clearing and forwarding agents want issues regarding efficiency in clearance of cargo in Nairobi resolved before they can freely transport goods on the Standard Gauge Railway (SGR).

 

They have outlined a number of issues they want the government to address first before they start nominating cargo for transportation from Mombasa to Nairobi on the SGR freight trains.

The agents who met in Nairobi last week resolved to seek assurance from Kenya Railways Corporation (KRC), Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA) on the specific time it will take between loading, arrival and clearance of cargo so as to minimise costs of business.

Resolutions of the meeting indicate that the agents also demanded closer collaboration with stakeholders to improve the situation which they claim has made SGR allegedly fail to convince importers, through clearing agents, to move cargo on the line.

Kenya International Freight and Warehousing Association chairman, William Ojonyo said while agents appreciate the cost relief and transit time reduction by SGR, the four days free storage time given at its terminal may not be enough and could lead to higher demurrage fees.

This, he explained, is due to inefficiency in clearing procedures at the Inland Container Depot (ICD) in Embakasi, Nairobi. “Agents resolve to be given at least 30 days storage free days at ICD to clear and evacuate their cargo.

They also want to be assured of similar benefits as the ones they have been enjoying at Mombasa’s Container Freight Stations,” Ojonyo said in the summary of the resolutions. President Uhuru Kenyatta launched the upgraded ICD in Embakasi on December 16 last year, paving way for the launch of the SGR Cargo Services.

The upgraded depot will go a long way in decongesting the port of Mombasa thus enhancing efficiency in the transport and logistics sector. The Head of State said the government is committed to lowering the cost of doing business through investment in enabling infrastructure.

“Over the last four years the government has invested in the expansion of the country’s transport and infrastructure network with a view to reducing the cost of doing business while creating new business and employment opportunities,” he said.

Despite the fact that a 20-foot container is transported at Sh30,000 on the SGR and double the price (Sh60,000) for a 40-foot container by road, the agents fear that the cost reduction may be incurred through extra storage fees.

“At the Container Freight Station, I can negotiate to have up to 30 days of free storage so that, for example, if I have 100 containers I have the luxury of moving five or 10 containers per day within that period but it may not be the case if I have to nominate cargo to the SGR, which means I will be paying for storage after the four days are over,” Ojonyo said.

However, the agents said they remain determined to nominate cargo for transportation from Mombasa to Nairobi on the SGR if certain guarantees and concessions are made by Kenya Railways.

“The agents have also resolved to have KRA, KPA and KRC, first of all to agree to meet with the agents regularly in order to iron out issues that might impede success of the SGR.

That each party take full responsibility for their failures that might affect the smooth running of the business and avoid apportioning blame to agents,” he said. Launched in June last year, Madaraka Express was expected to take up at least 40 per cent of cargo cleared at the port of Mombasa off the road.

However, the freighters said the uptake has been slow with only two per cent rise in cargo movement to a paltry seven per cent of the total cargo.

However, in response to the agents’ demands, KRC Managing Director, Atanas Maina defended the uptake saying it is expected to improve considerably with the completion and launch of the ICD at Embakasi.

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