Users of Mombasa Port have objected to shipping lines’ demurrage charges on containers, claiming that this exposes the nation to high commodity prices and trade costs.
The users, led by the Kenya International Freight and Warehousing Association (Kifwa), said that despite port congestion and limited depots causing delays, shipping companies are charging demurrage and detention fees on empty containers.
According to Kifwa, the action is causing supply chains and inland cargo movement to be disrupted, as well as financial hardship for customs officers, freight forwarders, and transporters.
It claimed that a disproportionate amount of risk is unfairly transferred to agents who have little control over depot capacity and that the high logistical costs are passed on to importers and consumers.
Depending on the destination, empty container return free periods (detention) at Mombasa Port can range from nine to fourteen days for local cargo to thirty to fifty-two days for transit products.
High cargo volumes from rising imports and transhipment cargo have caused congestion at the Port of Mombasa in recent months.
According to reports, empty container facilities outside the port are packed with vehicles waiting up to five days to return empties; others are turned away because there isn’t enough room.
Carriers impose demurrage and detention for exceeding the “free period” when a container stays inside a terminal; detention is applicable when the container is beyond the port.
Any additional fees result in increased commodity pricing and trade costs, which ultimately affect consumers.
Kifwa claims that liners cannot profit from their own inability to manage empties, calling the accusations “unjust and unlawful.”
After the initial “free time” has passed, demurrage fees can range from about $13 (Sh1,677) to more than $100 (Sh12,900) per container, per day. The shipping company, the size of the container, and the length of the delay all affect the precise cost.
