200 Rwandan containers face auction in Mombasa

Rwandan importers who are yet to collect what Kenyan authorities describe as long-stayed cargo from the port of Mombasa risk having their merchandise auctioned off after April 15 deadline.
Loading of containers at Mombasa. Authorities seek to decongest the port. (Courtesy)
Loading of containers at Mombasa. Authorities seek to decongest the port. (Courtesy)

Rwandan importers who are yet to collect what Kenyan authorities describe as long-stayed cargo from the port of Mombasa risk having their merchandise auctioned off after April 15 deadline.

The announcement was made on Wednesday by Gichiri Ndua, the Managing Director of Kenya Port Authority (KPA) while addressing participants who turned up for a stakeholders’ interactive forum that took place in Kigali.

Gichiri said the port that handled a record over a million containers last year, is in dire need of the prime yard space which is why the port’s authorities say it’s important that owners of the cargo respond to their call.

“In the spirit of supporting business growth in East Africa, the government of Kenya has given a full waiver for collection of specific long-stay containers at the Port until the stipulated deadline of 15th April 2015,” said Gichiri.

Kenya first announced the 100 per cent waiver which is meant to encourage cargo owners to collect their goods, during the 8th Northern Corridor Integration Projects summit that took place in Nairobi in December last year.

The summit directed that cargo overstayed at the port shall be granted full waiver of customs warehouse rent as well as port demurrage charges to facilitate their removal within 60 days from date of publication.

A list obtained by Sunday Times from KPA liaison office in Kigali indicates that there are 219 containers in total owned by Rwandan importers.

“Initially, the long-stayed containers were 230, but eleven of them have since been collected by their owners and they’re on their way to Kigali but we appeal to owners of the remaining cargo to make use of the full waiver now,” said Cynthia Kamau, the KPA country representative.

 The liaison office in Kigali was opened to bridge the information gap between Rwandan importers and Mombasa, but according to Gichiri, customers are yet to make use of the office which is meant to keep them up-dated about northern corridor developments.

John Bosco Rusagara, chairperson Rwanda Shippers’ Association, said he was confident members with cargo at the port will make use of the grace period and collect the goods.

“I am sure they’re not many, and those with cargo will respond,” he said.

Among the containers are 162 of 20 feet each and 57 others of 40 feet each, according to a list seen by Sunday Times.

KPA said that cargo on transit is normally given nine days upon arrival at the port during which no charges are incurred to allow their owners to make the necessary clearances through the port.

But after nine days, cargo which over stays is then taken to warehouses and other port facilities for storage a service that is charged. Most of the long stayed cargo in question has been at the port since November 2014 and in some cases since 2012.

The full waiver was mainly announced to benefit cargo that landed on November 30, 2014 but it appears the fees amnesty will be spread to even cargo that has been their earlier than November last year.

“It’s now just a matter of the owners writing a letter to the ports’ authorities and claim the cargo during this grace period,” said Kamau.

New Century Development, Airtel Rwanda and Trust Industries are some of the owners of the long stayed containers seen on the list.

Small volumes

In spite of the Single Customs Territory (SCT) that was launched on the Northern Corridor for Uganda, Rwanda and Kenya, only about 40 per cent of Rwandan imported cargo passes through the port of Mombasa, according to William Musoni, the Rwanda Revenue Authority Deputy Commissioner for Customs.

Under SCT, importers declare and pay their customs dues at the first point of entry which is the port of Mombasa before proceeding to their last point of destination uninterrupted.

The Rwanda Revenue Authority has officials stationed at the port to clear cargo bound for Rwanda. But Musoni says about 60 per cent of incoming volumes enter through the Tanzanian port of Dar es salaam although the route is the same length as that of Mombasa to Kigali.

Jean Baptiste Gasigwa, the Private Sector Federation (PSF) resident representative at the Kenyan port of Mombasa, told Sunday Times why that’s the case:

“First of all it’s cheaper there and Rwandan importers prefer to use Dar es Salaam because it gives a longer grace period of 15 days within which to clear cargo compared to Mombasa’s nine days,” said Gasigwa. Gasigwa also added that some of the charges paid by importers at Mombasa such as the terminal handling charges charged by shipping lines for each bill of landing are not applicable in Dar es Salaam.

“There’s also the cost of transport which is lower when one uses the Tanzanian route because the transporters only have to cross one border unlike the Kenyan route where one has to go through two borders,” said Gasigwa.
Rwanda-bound cargo through the Kenyan port dropped in 2014 to 235,912 tons from 240,099 tons in 2013.

According to KPA boss, Rwanda’s cargo accounted for 3.3 per cent market share of the total transit traffic compared to Uganda’s that increased by 609,803 tons from 4,912,316 tons in 2013 to 5,522,119 tons in 2014.

Uganda also has the biggest number of long-stayed cargo of over 3,000 containers. In January this year, Richard Kamajugo, the Commissioner of Customs at Uganda Revenue Authority, urged Ugandan importers to rush and collect their merchandize.

“Further delays in collection will lead to accumulation of storage and customs warehouse rent charges and prolonged stay may lead to the goods being deemed to have been abandoned and be disposed off through auction to create space for incoming cargo,” said Kamajugo in January.