Maritime operators mull ways to reduce transportation costs
By George Kebaso, July 1, 2021George Kebaso @Morarak
Maritime operators have resolved to implement Service Level Agreements (SLAs) to address delays and inefficiencies in cargo transportation along the northern and central corridors.
SLAs are instruments that define the level of service expected by a customer from a supplier, and widely used in the maritime sector.
When the operators met in Nairobi last week, they also agreed to adopt the electronic Maritime Single Window systems as they bid to enhance quick turn around of ships in order to reduce the cost of doing business, which has increased due to the impact of Covid-19 pandemic.
The Inter-Governmental Standing Committee on Shipping (ISCOS) Secretariat said in a report during the 2nd Regional Forum of Maritime Administration (REFOM) in Nairobi that cargo transport costs increased by an estimated 48 per cent due to the impact of the pandemic.
Shipping and Maritime Principal Secretary, Nancy Karigithu challenged the players to ensure that parties involved in cargo movement perform their duties at acceptable levels to facilitate timely delivery of cargo.
“As we all know, cargo clearance involves a number of actors. Inefficiencies from one actor causes a snowball effect in the entire supply chain,” she said emphasising that delays and inefficiencies are among the factors that increase the cost of doing business in the region.
She called on the players along the two main transport corridors in the region to play their roles efficiently to curb penalties such as customs warehouse rents and container demurrage charges.
“It is your duty therefore to find a way of enforcing SLAs among industry players in order to reduce the cost of doing business in the region,” she advised.
Caused delays
During the forum which drew participants from East, Central and Southern Africa in Nairobi, the operators said the Covid-19 pandemic caused delays along the Northern Corridor and especially at the ports of loading and the exit borders.
““The unprecedented Covid-19 pandemic has reigned havoc across all sectors of the global economy.
The maritime sector, which carries more than 80 per cent of internationally traded goods, suffered an equal share of that economic wreckage.
“This will therefore require a regional approach to address the challenges brought about Covid-19 pandemic,” she said.
Clement William Kamendu, director Shipping, Ports and Freight Services at the Inter-Governmental Standing Committee on Shipping Secretariat said the average transport costs before Covid-19 has affected delivery of goods to the hinterland.
“Between Mombasa and Kampala, a distance of 1145km, for instance, the cost of transport before Covid-19 was Sh230, 000 ($2300) taking transporters 2 to 4 days to haul cargo from the Port, but this increased by Sh100, 000 ($1000) to Sh250, 000 ($2500) for an increased time of 7 to 9 days,” he told Business Hub.