Stakeholders Lamu Port Tour

STAKEHOLDERS TOUR TO LAMU PORT
KTA together with other Stakeholders and more so players of the Mombasa Port Charter were invited by Kenya Ports Authority for a tour to the new Port facility which sits on a 20 acre land, reclaimed from the sea.
Agenda
Preparedness by The Government and Its Agencies.
The meeting was chaired by the CS Treasury, Ukur Yatani, who was accompanied by CS petroleum and Mining John Munyes. The Cabinet Secretaries first met the senior officers from the Government agencies including; KPA, KRA, KRC, KeNHA, KEPHIS, KEBS, Port Health, Port Police, Immigration and County officials, in a closed door meeting before meeting the private stakeholders.
All the Government agencies later confirmed to the stakeholders that they have adequately prepared themselves and are ready to start their operation at the new port.
 Port

Lamu  port sits on 20 acres of reclaimed land. Currently, the construction of the first 3 berths are complete, each berth has a length of 400m totaling to 1,200m with a depth of 17.5m.

Capacity
Lamu port has a capacity of 12,960 TEUS, explained Eng. Amadi who is in charge of the port infrastructure.

Targeted Markets
The new port is expected to serve Eastern part of Kenya, Southern part of Ethiopia and South Sudan. 
Port of Lamu is also expected to be a trans-shipment hub and expected to serve west –African countries as well.

Incentives
The KRA Board Chairman Amb. Francis Muthaura told stakeholders that they are working on manyincentives to offer to those who will opt to use the new port of Lamu. Among them being;
Transit period for transit cargo will be allowed to stay longer than the current 30 days,
Transaction fees per B/L shall be waived, Witnessing and stamping of transaction bonds will no longer be required, among many other incentives that are expected and will be aligned with the operationalization of newport.

Roads Infrastructure
The CS treasury told the meeting that Lamu – Ijara – Garissa road will be complete in one years time while the Isiolo – Mogadishu road is at the final stage of tender awarding.

KTA SUBMISSION
Kenya Transporters Association told the meeting that transporters fear the insecurity in the region and more on the highways connecting the port.
KTA requested the government to beef up security so as to make the port viable for business.

Port Commissioning
The Port of Lamu will be commissioned on 20th May 2021, by His Excellency the President Hon.Uhuru Kenyatta. The first ever vessel is expected to dock on that date.

Credit Terms: Crippling Our Business

To survive these harsh and hard economic times made even harder by the current effects of the pandemic, Members and Transporters in general need to realize one of the critical mistakes we are doing in our businesses is offering extended credit terms to our clients. This has a more adverse effect than even the actual rates we are charging.

We recognize that these are private decisions between individual transporters with their respective clients but it is our duty to make our members aware of the negative and adverse effects it is having on our businesses, involved in cargo transportation by road. This is the main reason road transporters are always barely surviving with majority having loans and cashflow problems. It is a cycle that then forces some transporters to lower their rates to try and get cash inflows faster to pay their liabilities. We are caught in an unforgiving cycle. The rates end up being determined by cashflow rather than profitability.

The only way to break this cycle is to change the terms of payments. Our partners in the supply chain have a culture that ensures they do not face the same problems we face.
The following supply chain players do not offer credit.

  • Supplier of goods.
  • Shipping line for sea freight.
  • Shipping line for local destination charges.
  • Kenya Ports Authority.
  • SGR (Our competitor)
  • Even KRA offers no credit.
  • And many more.

To add on, we have to pay most of our variable other fixed costs upfront.

When you offer your clients credit terms, you are in effect financing their businesses to your detriment. No wonder our road sector is littered with failed and collapsing companies. Most are facing financial ruin while having a large debtors portfolio. 
We understand it is a willing buyer willing seller unregulated capitalistic market but we can only advise. Let's change this culture. It is very difficult to change a culture once established in an industry and more so between a client and service provider not withstanding how bad that culture is, BUT we must change to survive.

It involves being open and honest with each other too. How many transporters bother to cross check why a new client wants their services. Could they be running from another transporter after failing to honour their debts? We have had cases of a few clients having ruined many transporters just because we do not conduct a little due diligence.

Let us have this conversation. We believe ideally we should be like our supply chain partners. Let our clients also change their customers or borrow from banks for their working capital requirements. Let's not play the role of banks.

TRANSIT GOODS LICENSE 2018 EXTENDED TO MARCH 4th 2019

In recent times, the KTA Secretariat has been pushing for the extension of the use of Transit Goods License 2018 as there was an unforeseen delay in the issuance of the 2019 License.

This led to communication by the Secretariat to Kenya Revenue Authority on the same in January which extended the use of the 2018 License up until 2nd February, and when it spilled over to February the same had to be made with KRA issuing a notice, of this being the last extension up until 4th March.

This allowed time for KTA Members to obtain Transit Good Licenses for 2019, the communication with Kenya Revenue Authority (KRA) has trickled to the other Authorities: Uganda Revenue Authority (URA), Rwanda Revenue Authority (RRA) and Tanzania Revenue Authority (TRA).

Press Statement - NATIONAL GOVERNMENT DIRECTIVE ON FORCED USE OF SGR

On Tuesday 6th August, 2019, KPA together with KRA issued a government directive that all local cargo destined to Nairobi and the hinterland will from the 7th August 2019 be transported by SGR only. We the under listed organisations hereby jointly and singly wish to express our strong opposition to this directive as it is monopolistic. This directive violates the World Trade Organisation Rules on Trade Facilitation and United Nations convention of carriage of goods by Sea agreement where Kenya is a signatory. The convention establishes a uniform and modern legal regime governing the rights and obligations of shippers, carriers and consignees under a contract for door-to-door carriage that includes an international sea Leg. It also goes against the Competition Act No. 12 of 2010 on Restrictive Trade Practices and whose objective is to enhance the welfare of the people of Kenya by preventing misleading market conducts.

It is vital that the government be cognizant of the adverse effects of this directive both economically and socially. The business community in Mombasa and along the MombasaNairobi Highway (A109) have over the years invested heavily in fuelling stations, banking, Insurance, hotels and manufacturing industries which have contributed to the economic bolstering of counties, the common mwanainchi and the growth of the National GDP. This has improved efficiency of the port. The transport and logistics and its value chain touches on every sector of the economy namely manufacturing sector, the agricultural sector, the business sector, the tourism sector amongst others. Therefore, any policy affecting the 
sector requires extensive public participation and consultation before implementation.

While the operationalization of the SGR freight services is welcome and supported by all maritime stakeholders, our position is that the Government should let the free market forces dictate the cargo owners’ choice of mode of transport they pick to transport their cargo (See table).

Freedom of Choice is key. It is extremely unfortunate that the Cabinet Secretary for Transport is misleading the public by claiming that importers are free to choose Rail or Trucking to ferry their cargo to Nairobi and the hinterland. Importers are forced to use the SGR freight. Our Trucks delivers cargo picked from the port to the customers’ doors within a day and therefore a faster mode. It is also important to point out that using the SGR is more expensive than using Road Transport. 

Our statistics on the number of employees both direct and indirect, the level of investment made and the social Economic impact should guide the government to develop policies and directives that will work for the people as the government is for the people.

 

DOWNLOAD HERE

LOGISTICS: MOVING TO ENHANCE TRUCK TURN AROUND

In the most efficient trade corridors, the average KMs/truck/year is between 120,000 to 150,000

Accordingly to a baseline study recently conducted by KTA to analyse operational models and cost structures, transporters are covering an average distance of 96,240 kilometres in a year far below the Port Charter target of 120,000 kilometres per truck per annum. The average mileage per truck indicator, commonly known as Kms/truck/year, is a measure of efficiency of trade corridors, productivity of road freight transport and an important determinant of freight rates.

© 2021 Kenya Transporters Association Ltd. All Rights Reserved.