Households to pay more for goods as KPA pushes for higher tariffs

Households are starting at a rise in commodity prices as Kenya Ports Authority pushes for an increase in cargo and vessel handling charges at Mombasa and other key facilities.

Shippers now say will increase the cost of imports with both shipping lines and traders forced to pass the extra charges to consumers.

Based on KPA’s new proposed tariffs, shippers say the costs per container will increase by between 20 per cent and and 27 per cent, which will have a significant impact as Kenya remains a net importer.

KPA which last week held stakeholder engagements in Kampala and Kigali, after meeting port stakeholders in Mombasa and Nairobi, is pushing for an upward adjustment on tariffs for at least 25 services offered at the Port of Mombasa, Lamu, Inland Container Depots among other facilities, which will see some charges increase fivefold.

This is on the advice of consultancy firm–Maritime Business and Economic Consultants, owned by former KPA top managers, that bagged a Sh14.8 million (inclusive of VAT) contract to guide the review of service charges by the state corporation.

The tariffs include pilotage fees, tug services, mooring services, light dues, port and harbour dues, dockage, buoyage and anchorage, supply of fresh water, salvage and towing operations, stevedoring container handling charges, storage charges and penalties.

They also cover port access charges and ferry services, among others. For instance, vessels other than those exempted, or paying an annual fee are subject to a minimum charge of $200 (Sh25,850 ) per call up from $150 (Sh19,387 ), in addition to other service charges.

Vessels which are resident in a Kenyan Port shall pay an annual fee, to be charged at $1,000 (Sh129,250) payable annually in advance, up from $600 (Sh77,550). Dry general cargo discharging, loading, shifting on board without landing shall cost $8.50 (Sh1,098 ) per tonne up from $7.50 (Sh 969).

Costs for discharging motor vehicles, petroleum products, containarised goods have also gone up by up to 30 per cent, the proposed tariff review seen by the Star shows.

Containers remaining in the authority’s terminals at the Port of Mombasa and at the ICDs in excess of free periods (four days for domestic and 15 days for transit) shall accrue storage charges of $30 for a 20-foot container and $60 for a 40-foot container within the fifth and tenth day.

Thereafter, domestic cargo will attract a penalty of $55 up from $45 for a 20-foot container and $105 up from $90 for a 40-foot container.

Transit containers will attract charges of $30 and $60 between day 16 and 21, and thereafter attract charges of between $55 and $105. Cost for port passes has also increased by up to six times deepening on the mode of transport with lorries being among the highest charged.

Shippers led by the Shippers Council of Eastern Africa (SCEA), which also represents traders, are opposed to the proposed tariff increases and have urged KPA to reconsider the timing and the proposals.

“It will have serious costs implications on businesses affecting imports, exports, bulk cargo and petroleum products competitivenes and attractiveness of the Mombasa Port,” SCEA chief executive Agayo Ogambi said, “Our preliminary calculations and analysis indicate that costs per container will increase by between 20 per cent and 27 per cent.

While in the recent past sea freight is gaining traction, the proposed tariffs review will hurt exports through the Port of Mombasa, he said, with proposed increase in handling charges, plug in costs further complicate exports of perishables which are already hurting from increased freight costs and delays occasioned by the Red Sea crisis.