Impact of reverting port works to Mombasa and what next in 2023

Containers at the Mombasa Port. [Omondi Onyango, Standard]

The directive by President William Ruto to revert port operations to Mombasa from Nairobi and Naivasha dry ports during his swearing-in on September 13 has drawn mixed reactions among stakeholders at the Coast 100 days later.

Opinion is divided over those who feel that the directive has been the magic bullet they had been waiting for in the transport logistics sector while others have dismissed it as a populist statement meant to score political points.

Kenya Transporters Association chairman Newton Wang'oo, noted that there has been a noticeable return of life on the Mombasa-Nairobi highway and small towns along the way have regained business activities as more trucks roared back following the order that cargo clearance is done in Mombasa.

According to him, 2023 looks bright for the road transport sector as they expect to gain more business because cargo owners are free to choose either road or rail transport.

"The clearest sign that is a notable increase in the number of trucks on the highway and improvement of businesses in small towns along the way.

"We can confirm that there is a rise in cargo for us. We are not against rail or air transport. What we fought for was a choice in the thorough bill of lading for cargo owners and the president granted it," he said.

KTA boasts a fleet of 154,000 trucks registered in Kenya. Before the president's directive, KTA members and civil society had been agitating for importers to be allowed to choose the mode of transporting their cargo between the port and the hinterland.

In September, Mombasa County Governor Abdullswamad Nassir wrote to the Kenya Ports Authority urging it to fully comply with the presidential directive and notify all the relevant stakeholders on the same. Nassir said stakeholders from the shipping fraternity while appreciating progress so far, equally raised concerns about the still-existing bureaucracies.

"The social economic recovery and development of Mombasa is a critical component and on top of our agenda. As such, you will appreciate the important role played by the logistics, transport and warehousing industry in mitigating the livelihoods of Kenyans and Mombasa in particular," reads part of Nassir's letter to KPA that was also copied to The Presidency.

Chief Executive Officer of the Container Freight Stations Association Daniel Nzeki, said their cargo storage businesses have only achieved a slight increase since the president's order.

He said container freight stations (CFSs) are operating at 30 per cent capacity on average which marks an insignificant increase from above 20 per cent previously.

"There is an insignificant increase in business. We should give it time; maybe February next year to see whether there will be an impact," Nzeki stated.

However, stakeholders in the transport logistics chain blamed the slow return to business in CFSs on the increase of rates by about US$100 (about Sh12,200) per container immediately after the president gave the directive to raise the cost to almost that of rail freight.

Mr Roy Mwanthi, chairman of the Kenya International Freight and Warehousing Association (Kifwa), said the president's directive may give a positive impact in six months to one year, noting that there has been little to celebrate about yet.

Mwanthi who represents clearing and forwarding agents in the country said it was clear that the Standard Gauge Railway (SGR), which was initially accused of enjoying favourable treatment from former President Uhuru Kenyatta's administration in cargo allocation at the port, was still making a brisk business and even having a backlog of cargo to haul.

"SGR is still making a brisk business. It will take six months to even one year to properly gauge the impact of the president's directive," Mwanthi observed.

He said there has been a slight impact in the rural townships along the Mombasa-Nairobi highway but noted that this could be a result of the usual December import boom at the port.

Sources at the port say there is a surge in imports from July to December every year.

Mwanthi however said President Ruto has fully granted what they have agitated for - allowing importers and exporters the freedom to choose how they want their cargo to be transported and where they should get it - and hence the need to wait for the rail and road transport to reach an equilibrium in the fullest of time.

"Owners of domestic cargo now enjoy the freedom to choose how their cargo should be transported and where they should collect it. This is the biggest issue that we wanted the president to address, and has been fulfilled," he stated.

He added: "The only problem has been with the transit cargo, particularly from South Sudan which is directly transported by SGR from the port to Nairobi Freight Terminal without the owners' consent. Cargo is still being controlled by the authorities."

For Muslims for Human Rights (Muhuri) chairman, Mr Khelef Khalifa, President Ruto's directive was just a mere political statement meant to earn Kenya Kwanza government mileage as opposed to the intended revival of the Coast region's economy.

"Coast residents and businesspeople were duped because there is clearly no impact on the president's directive to return port operations to Mombasa. SGR is making big business while a few trucks are in operation. Nothing has changed. The Coast economy is yet to be revived," Khalifa, a long-serving human rights cruder, argued.

He noted that the recent announcement by the Kenya Kwanza leadership that the railway track will be rehabilitated all the way from Naivasha Inland Container Depot (ICD) to Malaba on the Kenya-Uganda border was confirmation that the government still favoured rail as opposed to road transport.

He said this posed a threat to truck businesses in the country and therefore Kenya Kwanza policy was not different from that of the Jubilee administration.

"Kenya Kwanza has been sending mixed signals. It has given a directive on the return of port operations to Mombasa and later announced plans to extend rail operations to Malaba, which means taking away business from trucks that employ many Kenyan drivers. This cannot revive the economy of the Coast region," he protested.

Khalifa however said the impact of Ruto's order on cargo operations can be properly assessed after more than three months.

"It takes at least three months to import cargo through the port. As it is, there is no impact and we can only give it time. However, there has been doublespeak. I do not expect much since Ruto was part and parcel of the administration that favoured SGR operations from the start," he argued.

President Ruto's directive was part of his campaign pledge to revive the economy of the Coast region following hue and cry by the residents on direct offtake of cargo from the port by SGR.

Kenya Ports Authority (KPA) acting managing director Mr John Mwangemi published a notice weeks' after the president's directive allowing cargo owners to choose where their goods should be cleared and the mode of transport. Shipping lines later circulated the notice to the ports of loading cargo across the globe.

Before President Ruto's directive, residents, civil society and business people at the Coast had launched a persistent campaign dubbed "Okoa Mombasa" opposing the 2018 directive by the then Cabinet Secretary for Transport and Infrastructure, Mr James Macharia, that allowed SGR to transport cargo directly from the port to Nairobi and Naivasha dry ports in what was viewed as a monopoly.

The directive had been blamed for the shrinking economy of Mombasa county and the Coast region at large as well as the 'dying' towns along the Mombasa-Nairobi highway that were reportedly dependent on road transporters.