Shippers and traders in Kenya have raised concerns over the planned increase on surcharges by Danish shipping and logistics company- Maersk, for exports and imports to and from Mombasa.
The world’s second biggest container carrier, after Mediterranean Shipping Company (MSC) issued an advisory on June 15, announcing the intended increase effective July 15 (Monday next week).
A shipping surcharge is a fee that is added to the base cost of transporting goods.
The planned increase on charges by Maersk, which accounts for up to 28 per cent of the market share of cargo throughput at the Port of Mombasa, range between $13 (Sh1,677 ) and $151 (Sh19,479), depending on the size and type of container.
The Shippers Council of Eastern Africa (SCEA), a business membership organisation advocating for the interest of cargo owners (importers and exporters) in the region, said the move will lead to an increase in the cost of doing business, with other shipping lines likely to follow suit.
The new surcharges will increase the cost of exporting a 20ft container from the Port of Mombasa by $ 24 (Sh3,096 ) or 13 per cent and a 40ft container by a similar amount and at least 11 per cent rise in overall shiping costs.
The cost of importing a 20ft and 40ft container will also increase by $33 (Sh4,257) or 15 per cent and $34 (Sh4,386) or 12 per cent, respectively.
From an industry perspective, SCEA said the new surcharges will cost the industry an additional $212,980 (Sh27.5 million) to export 20ft containers annually through Maersk, from $1.6 million (Sh204.9 million) to $1.8 million (Sh232.4 million), based on the 2023 volumes handled by Maersk.
The industry will also pay an additional $397,188 (Sh51.2 million) for 40ft containers annually from $3.8 million (Sh486.8 million) to $4.2 million (Sh537.9 million).
Similarly, it will cost the industry an additional $3.8 million (Sh501.9 million) for importation of 20ft containers in a year from $25.8 million (Sh3.3 billion) to $29.7 million (Sh3.8 billion) and $5.1 million (Sh653.3 million) more to import 40ft containers annually, from $41.4 million (Sh5.3 billion) to $46.5 million (Sh5.9 billion), based on Maersk 2023 throughput share.
“These new surcharges will adversely impact ongoing initiatives to promote a modal shift from air to sea freight and which is already gaining traction, especially against the backdrop of climate and carbon reduction initiatives and resultant market demands especially in Europe,” SCEA chief executive Agayo Ogambi said in a letter to Maersk, seen by the Star.
He said the trade community is also concerned the move will significantly increase the cost of doing business, and adversely impact their already struggling businesses in Kenya and the Eastern African region.
“Since Mombasa is the gateway to Eastern Africa countries, the above analysis is inclusive of a 30 per cent port throughput to the regional transit countries, thus the increase has the potential to hugely impact the regional economies and negate the competitiveness of the Mombasa port,” Ogambi said in the letter copied to Cabinet Secretaries in key ministries.
They include Salim Mvurya (Mining, Blue Economy and Maritime Affairs), Kipchumba Murkomen ( Transport) and Rebecca Miano (Trade).
SCEA and its members believe in the principle of transparency and are concerned about the lack of clarity and justification for the new surcharges, Ogambi noted.
“While we may not be privy to the factors that inform your decisions regarding surcharges, we are writing to request that you seriously consider recalling and or staying your decision to increase these surcharges,” he says in the letter.
The lobby also wants to meet Maersk representatives to discuss the driving factors behind the decisions, and potentially work towards a solution that is mutually beneficial.