3 March 2014

Rwanda: Container Fees Worry Rwanda Clearing Agents At Mombasa

Container charges levied by shipping lines at Mombasa port are making it hard for Rwandan clearing agents based at the port to compete, Fred Seka, the chairman of the Rwanda Clearing and Forwarding Association has said.

Seka said the $2,500 (about Rwf1.7m) container deposit fee charged by shipping lines is greatly affecting their operations.

He added that the agents are also unhappy about the $80 (about Rwf54,000) paid to clean each container; delays in container deposit reimbursements and foreign exchange losses "because the deposit is often refunded in Kenya shilling".

Shipping lines charge clearing agents container deposit and cleaning fees to ensure the hygiene of the containers.

"The charges are high, especially for agents who have to pay for many containers at once," said Gerald Mukubu, the head of advocacy at the Private Sector Federation.

He argued that the fees were inconsistent with the spirit of the single customs territory that came into effect recently.

Mukubu said some Kenyan agents at the port reportedly do not pay the fees as many either own shipping lines or have established good relationships with the shippers. "This makes it hard for the Rwandan agents to compete favourably," he said.

The operationalisation of the single customs territory a few months back meant that local agents had to relocate to Mombasa as goods are now inspected and taxes levied at the first port of entry. These concerns come after a meeting held at the port over a month ago to sort out the challenges, which are also faced by Ugandan and Burundian clearing agents.

Meanwhile, Seka revealed that the association is discussing with local insurance firms, Sonarwa, Cogear and Phoenix, to see how the agents can work with insurers, especially paying for containers' cover.

"The single customs territory was expected to remove all trade barriers, we hope the concerned authorities solve this problem soon so we can concentrate on increasing business in the region," he said. He also noted that more local clearing and forwarding agents will be opening office at the port.

Out of the 152 clearing and forwarding firms under the association, 10 have offices at Mombasa port, according to Seka.

He is, however, optimistic that operations would thrive once the issue is solved.

Just above 50 per cent of Rwanda's shipments go through the Northern Corridor route; Mombasa-Kampala-Kigali. The removal of non-tariff barriers and improvements in cargo handling at Mombasa is making the route even more user friendly for Rwandan traders compared to Central Corridor's Dar es Salaam port.

Of the 22,307,000 tonnes of cargo handled by Mombasa port last year, transit goods constituted 6.8 million tonnes, a 3.4 per cent growth from 2012.

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