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Shipping lines threaten to hike freight charges over new levies

 

Some of the newly acquired ship to shore Gantry Cranes that are being offloaded at the Port of Lamu in Lamu County on April 13, 2024. [Kelvin Karani, Standard]

Shipping lines are contemplating raising freight charges following the introduction of levies by state agencies at the Mombasa port.

Through the Kenya Ships Agencies Association (KSAA), the shipping lines said the arbitrary increase of levies at the port may force them to raise the cost of transporting goods by sea.

KSAA Chief Executive Officer Juma Tellah yesterday said the association will be forced to pass on the cost imposed through new levies at the port to consumers.

In a statement, Mr Tellah noted that the introduction of user charges on a trade facilitation platform in May raised concerns over adherence to the World Trade Organisation (WTO) trade facilitation agreement and the push by President William Ruto to reduce the cost of doing business at the port.

Tellah said during the presidential stakeholders engagement in July 2023, President Ruto called for the streamlining of port operations to attract ships and increase revenue.

He, however, said that shipping lines are witnessing Partner Government Agencies (PGAs) introducing additional charges on the documentation process that will compel shipping lines to apply the same on transporting goods by sea, which will require cargo owners to pay more and hence translating to increased costs to consumers.

"We have also witnessed other charges being imposed on ships at the port of Mombasa on an arbitrary basis, which we expect to be passed on if we are unable to get the charges rescinded," he warned.

The Mombasa County government has appointed the Kenya Ports Authority (KPA) as its facilitator in the collection of user charges from ships and trucks at the port.

In a notice, KPA said it would charge at least Sh27,000 ($200) for solid waste management from ships calling at the port on behalf of the Mombasa county government effective May 15.

KPA Managing Director William Ruto said the Mombasa Solid Waste Management (Amendments) Act 2023 mandates the county to levy charges for solid waste management on ships calling at the port of Mombasa.

He said the ships will pay $2 (Sh270) per one hundred tonnes based on a gross registered tonnage and that the minimum charge shall be $200 (Sh27,000).

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