Importers, exporters and clearing agents are optimistic that the new cargo handling procedures at Port of Mombasa will reduce the cost of doing business, and enhance cross border trade.
The Kenya Ports Authority (KPA) last week issued new container handling rules for importers and exporters. The new procedures, according to Andrew Opiyo, KPA’s senior documentation officer, are designed to improve efficiency and to boost competitiveness.
According to the new procedures, inspection of imports will be done once in the first country of entry.
All shippers, agents and shipping lines are therefore required to comply with the new procedures.
Opiyo who was speaking during a sensitisation workshop on the new SOLAS, customs and shipping declarations and process organised by KPA in Kigali last week advised traders to embrace cargo consolidation to further ease the process of clearing and efficiency.
The Kenya Ports Authority entered into an agreement with private CFS’s in 2011 to help decongest the port, where CFS operators are required to clear cargo within 48 hours after being discharged from a vessel.
Last year, the authority banned private CFSs and shades from operating within the port’s premises, forcing them to invest outside.
Single customs territory processes streamlined
According to the single customs territory processes, the shipping line and agents will now lodge the sea manifest 48 hours before estimated time of arrival of the vessel for long hauls and for short hauls it will be six hours before to the Kenya Revenue Authority Manifest Management System (MMS) which is validated to ensure that it conforms to standards.
The new procedures according to Benjamin Mwandawiro, the assistant superintendent, container operations at KPA, are part of the international standards used in the manifest structure.
If accepted, the shipping lines will receive an email notification showing that the manifest has been lodged.
Contents of the notification will be in the vessel name, voyage and date/time when same was lodged.
The MMS system validates the manifest according to the customs regulations and if passed, the shipping line/agent is also notified of the same, he noted.
Such an initiative could benefit more than 159 Rwandan clearing agents.
The B/Ls will then be moved to the Rwanda Revenue Authority system (RRA) in case of Rwanda or Uganda Revenue Authority System (URA) for Uganda, Tanzania Revenue Authority (TRA) and Burundi Revenue Authority (OBR) for each destination respectively.
“The Kenya Ports Authority system, SIMBA system (KRA) and CAMIS (KRA) receive the entire approved manifest from MMS which is done system to system through web services and do not have any human intervention,” Charles Kisewa from KPA said.
The partner states revenue authority systems will each undertake their processes which may include declaration processes.
According to Mwandawiro, KPA will then receive two messages including cargo release and the inspection message directing cargo to be moved to a stated CFS for inspection. Meanwhile, for those clearing goods through agents, the chain of endorsements is to come from consignee.
The single customs territory system was established to facilitate seamless flow of cargo in the EAC region, reduce clearance costs and enhance compliance by clearing at first points of entry.
And according to importers, the new processes could help build a foundation for an EAC common market through elimination of trade barriers that discourage trade along the north and central corridors.
Under the destination model for example, any cargo entering the region will be cleared at the first point of entry and taxes paid at destination before release.
However, for goods destined to bonded warehouses in the importing country, appropriate warehousing procedures have to be finalised at the destination before release.
Benefits so far
According to clearing agents like Fred Seka, the chairman, Rwanda Freight Forwarders Association, the system is critical in eliminating duplication of processes and procedures thus reducing the risks associated with non - compliance on the transit of goods.
Efforts to eliminate non-tariff barriers have saved transporters and logistics stakeholders along the Mombasa-Kigali route nearly $7 million (about Rwf5 billion) since 2011.
However, the system still faces challenges including unharmonized customs procedures, and lack of common ECTs Platform among others.
According to experts, there is need to sensitise key players to adhere with the SCT framework and finalisation of pending developments in terms of ICT solutions between Revenue Authorities and Ports Authorities.
Recently, EAC heads of state stepped up efforts to eliminate cash deposits for cargo containers, signaling relief for traders already burdened with levies.
Shipping line agents currently charge up to $5000 for a 40 foot container for cargo containers as deposit.
However, after a long-running row between local clearing agents and importers against shipping lines at Mombasa over these fees, a land mark deal was reached with AUP, a Kenyan-based regional insurer agreeing to act as a guarantor on the issue.
A recent report released by Trademark East Africa indicated a reduction in the time it takes to clear with customs at the point of entry and exit for importers and exporters.
The time it takes to file and clear goods has been reduced from 14 days in 2012 to less than a day courtesy of the electronic platform.
The survey’s findings indicate that removal of key NTBs have contributed to a 14 per cent reduction in time taken to import goods from each East African country and further contributed to a 20 per cent reduction in time taken to export goods from each EAC country from 33 days to 26 days.
Non tariff barriers reduction has contributed to the reduction in cost of transporting a 40 foot container from Mombasa to Kigali, from $6,500 in 2011 to $4,800. Evaluators estimate that this generated a saving (at constant volumes) of about $7 million (about Rwf5.4 billion) on the Mombasa-Kigali route alone.