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Kenya: Transhipment Business Resumes at Port
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Business Daily (Nairobi)
25 March 2008
Posted to the web 26 March 2008
Joseph Kazungu
Nairobi
Mombasa Port has started to accept transhipment cargo bound for the port of Dar-es-Salaam.
Its decision is an indication that port operations have virtually normalised after a three -month backlog crisis that arose during the recent political unrest in the country.
At a meeting with stakeholders to review the performance of the port over the last two months, the Kenya Ports Authority (KPA) managing director, Mr Abdallah Mwaruwa, said transhipment business had resumed both for the Dar- es- Salaam bound cargo as well as for other Indian Ocean islands.
Mr Mwaruwa also informed the shipping lines that the Kenya Revenue Authority (KRA) had agreed to remove the transhipment bond - at least in principle - and a formal letter confirming the same was expected soon.
The suspension of the transshipment cargo to Dar-es -Salaam late last year had more to do with the congestion crisis at the Tanzanian port, which in turn caused delayed off take of transshipments from Mombasa thereby causing concern to KPA.
Transshipment is a small but increasingly important business segment to the Mombasa Port. Last year, the port of Mombasa handled 426,436 tons of transshipment traffic that makes up 2.5 per cent of the entire cargo throughput.
Nevertheless, in terms of growth rate, transshipment business recorded the highest growth with a staggering 34 per cent increase over 318,415 tons handled in 2006.
Meanwhile, KPA has added the Kipevu Terminal Base to handle over-stayed containers. This follows the recent gazettement of the facility by the KRA.
Mr Mwaruwa says other CFSs around the port will be incorporated to help alleviate storage space in the port.
Realising the growing significance of CFSs in the cargo handling chain, KPA is now appealing to shipping lines to manifest their containers to the facilities so as to ease the transfer exercise.
The management feels such a move would greatly streamline the operations at the port's container terminal.
Three main factors have been cited as contributors to the recent congestion: the high number of arriving containers; congestion experienced in neighbouring ports especially Dar-es- Salaam and the poor off-take deliveries occasioned by bad road and rail links.
Analysts say that, the port of Dar -es- Salaam would have reaped huge benefits in terms of new business when Mombasa port suffered congestion in January and February and the roads and rail to the landlocked countries became inaccessible due to political skirmishes.
However, the crisis in Kenya occurred at a time that the Dar- es- Salaam port was also suffering a serious congestion crisis something that made shippers from Rwanda and Uganda in particular to shy away from shifting from Mombasa to the Tanzanian port.
The situation at the Tanzanian ports has seen vessels wait for up to 14 days to berth and the ports are reeling under a vessel delay surcharge at the rate of $300 per Twenty foot Equivalent Units (TEUs) slapped by shipping lines in a bid to mitigate their losses arising from the prolonged waiting periods.
The analysts feel the KPA should draw lessons from the prevailing situation in Tanzania and realise that any laxity could render Mombasa port incapable of coping with the continued influx of containers.
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The container traffic at Mombasa port is currently growing at 22 per cent annually. To cope with the situation KPA contracted two adjacent container freight stations (CFSs) - the Consolbase Limited and Mombasa Container Terminal - to take fresh containers.
This has helped create critical space at the port's container terminal for handling incoming and outgoing cargo.
At the moment, a total of 10,435 container units or 13,551 TEUs are at the port. KPA said it was keen to have all importers remove their containers from the port as soon as they arrived.
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