Posted on November, 14, 2017 at 10:55 am
Lack of multiple grain handlers, rains and inefficiencies at the Port of Mombasa are costing importers an arm and a leg. Delays in off-loading cargo has compelled importers to pay demurrage of up to Sh1.5 million a day.
Grain importers have been the hardest hit by the delays, with huge volumes of maize and wheat being held at the facility awaiting discharge, a situation that could affect consumers in future as they will have to absorb the extra charges.
Logistics firms and millers have raised concerns over the delays that have now cut supply of goods in the market, signalling a looming shortage.
“We are incurring huge costs at the moment as we are required to pay for delays every day at a rate of $15,000 (Sh1.5 million) for a single ship,” said an official of one of the importing firms at the port.
Grain Bulk Handlers is the only company that is currently handling maize produce at the port. Millers have raised concern over having just one player at East Africa’s major gateway.
Public Works Principal Secretary Paul Maringa said it is not in the interest of the government to have a monopoly and that it would like to see another player at the port.
“The government does not support monopoly at all. We would like to see different players not only at Mombasa but also at other ports, such as the one we shall be putting up in Kisumu,” said Prof Maringa.
Prof Maringa said a committee to ensure efficiency at the port has been formed, bringing together officials from government agencies and private entities such as millers “to ensure smooth operations at the facility”.
Agriculture Cabinet Secretary Willy Bett last week blamed the tight supply of grain in the market on delays in off-loading at the port. Mr Bett said 1.4 million bags of maize were stuck at the port waiting to be discharged, creating a shortage to millers.
“The current shortage of supplies results from the fact that huge consignments of maize are stuck at the port awaiting to be off-loaded,” said Mr Bett.
According to millers, the total expected grain arrivals at the port through November 20 is 720,000 tonnes. With no further delay caused by the rains, it might take 72 days to discharge the entire consignment.
The slow pace in discharging has also been attributed to the ongoing rains, with wheat that arrived at the port on November 6 expected to be off-loaded on December 5.
The Kenya Ports Authority management did not respond to questions by Sunday Nation in regard to the delays. Managing director Catherine Wairi did not respond to our email enquiries.
The backlog, as of last week, was 14 vessels loaded with maize, bagged sugar and fertiliser — all waiting to offload at the port.
While some will offload at the mechanised Grain Bulk Handlers Limited terminal, others will go the conventional way, a process that takes longer.
East Africa region economist for Stanbic Bank Jibran Qureishi said the backlog could be as a result of many factors, including challenges in operation efficiency.
“Such a backlog is not good for Kenya’s economy as it can see importers opt for an alternative ports where their goods can be cleared fast,” said Mr Qureishi.
In July, the port blamed delays on torrential rains in April, which grounded the handling of grains. Ships could not discharge grains for seven days continuously, thus offsetting the usual two-day turnaround period per ship.
KPA said bad weather led to a build-up of vessels, which in turn led to a ripple effect on grain and conventional discharge by increasing the turnaround to a five-day period per ship in the subsequent months of May and June.
Source: Business Daily