The Kenya Shipping Agents Association (KSAA) has expressed its opposition to the regulation of shipping lines’ destination charges, arguing that it would negatively impact Kenya’s economy.

In a letter addressed to Transport Cabinet Secretary Kipchumba Murkomen and Mining counterpart Salim Mvurya, the association has called for the establishment of an independent international consultancy commission to assess the competitiveness of Mombasa Port compared to other ports in the region.

Juma Tellah, the CEO of KSAA, believes that excessive regulation in the shipping industry will reduce Mombasa’s competitiveness, as freight rates would need to be increased to compensate for the costs incurred, ultimately passing these expenses on to end users.

The lobby is concerned that such a move may set a precedent for other sectors, leading to a regular knock-on effect on the economy.

KSAA suggests that Kenya’s free-market economy, which encourages investment, could be at risk if price controls are imposed on the shipping industry. They argue that the increase in freight rates will not benefit the Kenyan economy and that shipping agents play a crucial role in improving efficiency and reducing costs for Kenyan importers and exporters.

“Keep money in Kenya rather than paying increased freight rates outside of Kenya. As shipping lines will need to cover their costs and to pay agents to provide a service, they will need to increase freight,” says Tellah.

The association said that shipping line charges are just one element of the supply chain, and various factors such as distance, transportation time, customs procedures, and port efficiency contribute to Mombasa Port’s competitiveness.

The lobby raised concerns that the plan may force replication of similar actions to other sectors thus regularly affecting the economy.

“Continue to operate Kenya as a free market or risk losing investment in all sectors. If there is price control in the shipping industry there is fear, it will spread to other industries,” Tellah added.

The bid to reduce shipping line service charges comes at the same time that KIFWA is trying to introduce a tariff that will lead to increased fees for Kenyan importers/exporters.

Meanwhile, Shipping principal secretary Geofrey Kaituko also said klast week that shipping charges have been vacated by a technical committee report on shipping lines.