- It had revised upwards surcharges for freight services on its key routes including Kenya, exposing traders to higher costs and pricey goods for consumers.
- The shippers’ council which was concerned that other shipping companies would follow suit on increasing surcharges has since welcomed the move by Maersk.
Image: BRIAN OTIENO
Traders using the Port of Mombasa have been saved from higher freight costs as Maersk moves to reverse new surcharges it had introduced in mid-July, causing an uproar in the market.
The Danish shipping and logistics firm which accounts for the biggest volume of container throughput at Mombasa has reverted to old rates, while abolishing some, after protests by local traders and shippers in the country, with the industry regulator Kenya Maritime Authority (KMA) intervening.
It had revised upwards surcharges for freight services on its key routes including Kenya, exposing traders to higher costs and pricey goods for consumers.
Among them was a surcharge on containers of between $13 (Sh1, 680) and $151 (Sh19, 516) depending on the size and type of container, which came into effect on July 15.
It also introduced an emergency surcharge pegged on the Red Sea situation and peak season surcharges that ranged between $300 (Sh38, 775) and $2,000 (Sh258, 500) depending on the size and type of container, and destination.
This saw traders in the country, led by the Shippers Council of Eastern Africa (SCEA), protest the move warning that it would impact trade not only in the country but the region, with consumers bearing the costs on increased commodity prices for imports, while exports became uncompetitive in the global markets.
KMA directive Maersk to hold the implementation of the new charges to allow dialogue with stakeholders.
The shipping line has not only made a U-turn and reverted to old rates, but also abolished some altogether, effective Thursday (August 8).
Some of the removed surcharges include a late documentation fee for export, on all types and sizes of containers, initially charged at $30 (Sh3,877) per document.
Exporters will also not pay the usual $150 (Sh19,387) per container for late gate service and a $30 late payment fee, which have both been abolished.
Maersk has also done away with the $100 (Sh12, 925) weight discrepancy fee per container and $30 (late documentation surcharge per document.
Terminal Handling Service charge at Mombasa for 40-foot and 45-foot containers heading to other global ports has been reduced to $148 (Sh19,129) from $151 (Sh19,516), while that of 20-foot has gone down to $99 (Sh12,795) from $102 (Sh13,183 ).
Transport document amendment fee for cargoes coming to Mombasa from all global ports of origin has been cut to $70 (Sh9,047) from $200 (Sh25,850).
The new rates also touch on other 21 services whose surcharges have been reduced by an average of between $2 (Sh258) and $50 (Sh6,462).
“We appreciate your business and look forward to continuing working with you in the future,” Maersk said in a customer advisory seen by the Star.
It is however not clear if the company has made any adjustments on the emergency surcharges that come with risks in the Red Sea, where continued attacks by the Houthi Rebels on vessels have led to longer routes and higher insurance premiums, meaning increased operating costs for shipping companies.
Maersk accounts for the biggest share of imports and exports through the Port of Mombasa (28% of total throughput), followed by the world’s leading container carrier-Mediterranean Shipping Company (MSC) which accounts for 18.9 per cent, while China’s CMA CGM accounts for 13.9 per cent of containers at Mombasa.
This means the three account for more than 60 per cent of Kenya’s seaborne trade with the globe, where the international shipping industry is responsible for the carriage of around 90 per cent of world trade.
China remains the biggest import source for Kenya while Europe is a key destination for the country’s exports, mainly horticultural and other agricultural products.
The shippers’ council which was concerned that other shipping companies would follow suit on increasing surcharges has since welcomed the move by Maersk.
“We commend Maersk for rescinding the surcharge increases which would have hurt their customers adversely not only in Kenya but also in the region. We see shipping lines as major players in the region’s economic development and, as such, urge for their understanding on the freight costs and related charges they come up with and which must be administered within the stipulated regulations,” SCEA chief executive Agayo Ogambi, said.
“SCEA applauds KMA for the support to our opposition to the increase. Now that they have reverted to old rates, KMA needs to engage all the lines on the destination surcharges which continues to affect the competitiveness of Mombasa Port and the Northern Corridor.”
Mombasa remains a major seaport serving Kenya and the East African Community (EAC), together with Dar es Salaam Port on Tanzania.
Uganda is the biggest user among landlocked countries, accounting for up to 82 per cent of transit volumes through Mombasa.
Overall cargo throughput at the Port of Mombasa increased from 33.9 million metric tonnes in 2022 to 35.9 million metric tonnes in 2023, the Economic Survey 2024 indicates.
Container traffic rose by 11.9 per cent to 1.6 million Twenty-foot Equivalent Units (TEUs) in 2023.
“The increase was partly due to a 17.6 per cent rise in the number of ships handled from 1,561 in 2022 to 1,835 in 2023,” Kenya National Bureau of Statistics notes in the survey.