Despite opening up the Naivasha inland container depot (ICD) in Kenya to ease pressure on Mombasa Port, many Ugandan shippers have not yet made use of the facility citing high costs.
Government of Kenya allocated Uganda 20 hectares of land to build an inland container port at Naivasha.
This ICD was aimed at bringing Mombasa port closer to Uganda as Kenya’s standard gauge railway will be used to bring the containers from Mombasa port to Naivasha where they will be cleared from by Ugandan traders.
However, according to Mr Hussein Kiddedde, the chairman Uganda Freight Forwarders Association, “The connectivity is very important and whenever you break the bulk in the middle of the journey, it becomes expensive, because of additional handling costs wasted.”
He added that lost time could range between 12 to 36 hours due to various factors. Legal issues also arise during switching cargo which may have challenges to apportion liabilities correctly.
“It is not a preferred option for Ugandan shippers because of the additional costs as a result of additional handling and the delays,” Kiddedde shared.
He added that since most cargo originates from Mombasa and empty containers have to be ferried to Mombasa, they still depend on trackers which is a big cost shifting their fleet from Mombasa to Naivasha.
Truckers charge $2,300 (Shs8.4m) per truck load from Mombasa to Kampala.
From Naivasha to Kampala costs $1,700 (Shs6.2m) - $1,850 (Shs6.8m) both based on round trip (with empty container return). For an empty container return via Naivasha to Mombasa, there is an additional last mile cost in Mombasa to teack the empty container from the SGR to the nominated depot.
In June last year, Uganda’s Minister for Works and Transport Gen Edward Katumba in a second letter to his Kenyan counterpart James Macharia indicated that the Naivasha Inland Container Depot did not have the capacity to handle imports intended for trans-shipment to Kampala.
Uganda is a transit route user to other neighbouring land-locked countries, such as Rwanda, South Sudan and Democratic Republic of Congo.
Responding to a letter dated May 28th 2020, Gen Katumba said: “Government is commitment to using the Naivasha ICD in the spirit of regional integration. On the other hand, I would like also to re-affirm that the findings of the technical team in their visit to the ICD need to be addressed to make the facility more attractive to shippers.”
Also according to traders’ plea was to make the ICD optional instead of making it mandatory.
The Kenyan government through a legal notice made the compulsory movement of cargo from Mombasa to the Naivasha ICD.
However in his response to his counterpart Gen Katumba did concur with the traders’ request saying: “Our considered opinion remains that the use of the Naivasha ICD should remain optional and the government of Uganda will continue to encourage the business community in Uganda to use the SGR because of its benefits.”
Gen Katumba in his second letter in as many weeks, wants his Kenyan counterpart, to rescind his notice and address issues raised by transporters before implementing the directive.
The decision to start using the Naivasha ICD for all transit imports was arrived at a meeting attended by the presidents of Kenya, Uganda, Rwanda and South Sudan.
This was partly intended to curb the spread of the coronavirus pandemic by truck drivers but the facility did not have all the necessary amenities.
In an interview with Daily Monitor on the update, Kampala City Traders Association Chairman, Mr Everest Kayondo said: “The delegation sent to inspect the ICD found out that the facility was not ready.”
According to Mr Charles Kareba, the chairman of Uganda Shippers Council, transporting cargo from Mombasa to Kampala ranges between $2,500 (Shs9.2m) and $3,200 (Shs 11.8m) per truck.
This cost would increase if truckers were to branch off to Naivasha and again load goods to Kampala.
“But we sidelined Naivasha because it was not making economic sense to use that port. The road to that port was too narrow for two trucks to fit. We cannot talk of the time we would waste there because the place lacked facilities,” Kareba added.