Clearing agents revise cargo clearance fees upwards

Clearing agents have revised upwards minimum fees charged on clearing goods coming into the country.

The agents under the Kenya International Freight and Warehousing Association said the revision is due to the undercutting the industry has experienced over the years.

Kifwa, which has over 1,200 agents operates from the Ports, Container Freight stations, Inland Container Depots and all border points and airports.

Kifwa chairman Roy Mwanthi said lack of standard guidelines and regulations had contributed to their losses.

“We have seen unfair business practices that have resorted to undercutting in our industry. This made importers to take advantage of the situation to underpay our people," he said.

The new standardised charges for land sea, air and freight were passed on Wednesday at a meeting in Mombasa.

A 20-foot container for local import, according to the resolutions will be charged a minimum of Sh15,000 as a port clearance fee, whereas a 40-foot container will be charged Sh25,000.

For local exports, a 20-foot container will be charged $100 (Sh14,900) and a 40-feet container will be charged $ 150 (Sh22,000), whereas a transit cargo through Mombasa Port will be charged $100 (Sh14,900) for a 20-feet container and a bigger container of 40-feet will be charged $200 (Sh29800).

For transhipment cargo, a 20-feet container will have to pay $100 (14,900) and a 40-feet will pay $200 (29,800).

For the importation of a vehicle, a local importer will pay Sh15,000 for a vehicle of up to 2,000 cc, and Sh20,000 for a vehicle of up to 3,000 cc.

For vehicles above 3,000 cc, buses, trucks, and special vehicles, the local Kenyan importer will pay Sh30,000 per unit for clearance services.

For exporters of vehicles, the charges will be $150 (Sh22,000) for vehicles of up to 2,000 cc, $150 (Sh22,000) for vehicles up to 3,000 cc, and $200 (Sh 29,800) for vehicles above 3,000 cc, buses, trucks and special vehicles.

Mwanthi said the minimum charges are not fixed and the clearing agent is allowed to charge more, depending on the agreement with their client.

“Basically, clearing agencies offer professional services which are technical in nature that involve cargo classification, cargo declaration, tax collection and as such, the workers must be fairly compensated for the services rendered,” he said.

He said they have standardised the prices due to the increased cost of doing business.

All clearing agents are licensed by the Kenya Revenue Authority Commissioner of Customs and they are required to obtain all relevant permits and licenses from both national and county governments.

“We are required by law, East African Community Customs Management Act, to have an operating office in a physical location. You are required to have the minimum and basic infrastructure for you to be licensed by the Commissioner of Customs,” Mwanthi said.

“We are also required to have some capital to be able to invest in revolving deposits and container deposits for us to be able to serve our clients better.”

He said their agents are earning peanuts due to unfair business practice.

“We are clearing goods worth millions of shillings yet we have clearing agents earning as little as Sh2,000 shillings,” Mwanthi said.

“We are unable to continue offering efficient services and maintain offices. That is why we have taken up the setting of the minimum chargeable fees as an association to give value back to our members," he said.

The guidelines will take effect on December 1.

Kifwa Mombasa chairperson Leonard Njiru, said the standardisation of the prices will also help rid of the quacks from their industry.

“We have had cases of importers from Rwanda, Uganda and other markets swindled off their hard-earned money by quacks. Kifwa is going to release the list of all the agents that have been certified to conduct business," he said.

“These guidelines are aimed at streamlining the industry and ensuring professionalism. We want to get rid of these bad elements that have been tainting our image,” he said.

Njiru said the standardisation of the clearing industry will also help the government to tap into the revenue that was getting lost.

“The government will be able to tap on the revenue that is otherwise being lost to the people who are not recognised as licensed agents,” he said.

Njiru said an agent who does not follow the guidelines will face a Sh100,000 penalty.

“For a second offence, a clearing agent will be charged Sh300,000 as a penalty, and after a second offence you will be expelled from the association and the KRA will have to withdraw your operating license,” he said.