Business

Ugandan traders move to cut back on Mombasa Port losses

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The Kampala City Traders Association chairman, Mr Everest Kayondo. FILE PHOTO  

By Dorothy Nakaweesi

Posted  Wednesday, July 9   2014 at  01:00

In Summary

Problem. Most traders use brokers who lack expertise on clearing procedures.

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Kampala.

In a bid to cut back on the losses incurred through demurrage and auctioning of cargo due to delays, Ugandan traders are organising an on-site assessment at the Mombasa Port.
According to Kampala City Traders Association (Kacita) chairman Everest Kayondo, the traders will travel to Mombasa next week.
“Our traders go through a lot of challenges while clearing goods at the port of Mombasa as a result of the new measures introduced. So we think this on-site assessment will give us a clear picture,” Mr Kayondo said on Monday.
The new cargo clearing changes have left many Ugandan traders in distress because many still lack adequate information. Because of that, they have delayed to clear their goods thus accumulating demurrage, a charge paid as compensation for the delay of cargo, which has made the cost of doing business high.
In an interview with the Daily Monitor at the recent commissioning of the Mombasa Ports Charter meant to reduce the cost and time of clearing goods, Mr John William Lusabya, the representative of the Ugandan business community in Mombasa, said: “Over 90 per cent of cargo auctioned at the port of Mombasa because of delays belongs to Ugandans.”
He added that this is as a result of Ugandan traders’ lack of information on when their goods have docked and in the process of doing last minute clearing, they instead end up spending a lot of time.
Kenya Ports Authority (KPA) currently gives nine days for all cargo off-loaded to be cleared from the port. Initially, KPA used to give 45 days; this was subsequently reduced to 15 until this period was cut down to the current nine.
Mr Lusabya said after this period of nine days elapses, one would be required to pay $145 (about Shs381, 350) for every 40-feet container for the first day.
“This goes on accumulating and at the end of a month, a trader will be paying $3,000 (Shs7.8 million). All this is about traders lacking information on how to clear their cargo,” Lusabya added.
He said another problem is that majority of traders use brokers, who lack expertise on clearing and instead of guiding them to pay clearing money before the ship docks, they do it after and that’s how they accumulate days.
Speaking about ways of reducing losses at the port, Ms Nancy Karigithu, the director general Kenya Maritime Authority, said: “They should always come to us. This will save them from the middlemen who mislead them and also salvage their businesses and money.”

dnakaweesi@ug.nationmedia.com