Shippers and traders in Kenya have expressed concerns over the planned increase in surcharges by Maersk, a Danish shipping and logistics company, for exports and imports to and from Mombasa. Maersk, the world’s second-largest container carrier after Mediterranean Shipping Company (MSC), announced the intended increase on June 15, to take effect on July 15.
A shipping surcharge is an additional fee added to the base cost of transporting goods. The planned surcharges by Maersk, which handles up to 28 per cent of the cargo throughput at the Port of Mombasa, range between $13 (Sh1,677) and $151 (Sh19,479), depending on the size and type of container.
The Shippers Council of Eastern Africa (SCEA), a business membership organization advocating for the interests of cargo owners in the region, stated that the increase will raise the cost of doing business, with other shipping lines likely to follow suit.
The new surcharges will increase the cost of exporting a 20ft container from the Port of Mombasa by $24 (Sh3,096) or 13 per cent and a 40ft container by a similar amount, resulting in at least an 11 per cent rise in overall shipping costs. The cost of importing a 20ft and 40ft container will increase by $33 (Sh4,257) or 15 per cent and $34 (Sh4,386) or 12 per cent, respectively.
From an industry perspective, SCEA noted that the new surcharges will cost the industry an additional $212,980 (Sh27.5 million) to export 20ft containers annually through Maersk, increasing from $1.6 million (Sh204.9 million) to $1.8 million (Sh232.4 million), based on 2023 volumes handled by Maersk.
The industry will also pay an additional $397,188 (Sh51.2 million) for 40ft containers annually, rising from $3.8 million (Sh486.8 million) to $4.2 million (Sh537.9 million).
Additionally, the industry will incur an extra $3.8 million (Sh501.9 million) for importing 20ft containers annually, increasing from $25.8 million (Sh3.3 billion) to $29.7 million (Sh3.8 billion), and an extra $5.1 million (Sh653.3 million) to import 40ft containers annually, increasing from $41.4 million (Sh5.3 billion) to $46.5 million (Sh5.9 billion), based on Maersk’s 2023 throughput share.
“These new surcharges will adversely impact ongoing initiatives to promote a modal shift from air to sea freight and which is already gaining traction, especially against the backdrop of climate and carbon reduction initiatives and resultant market demands especially in Europe,” SCEA chief executive Agayo Ogambi said in a letter to Maersk, seen by the Star.
He said the trade community is also concerned the move will significantly increase the cost of doing business, and adversely impact their already struggling businesses in Kenya and the Eastern African region.
“Since Mombasa is the gateway to Eastern Africa countries, the above analysis is inclusive of a 30 per cent port throughput to the regional transit countries, thus the increase has the potential to hugely impact the regional economies and negate the competitiveness of the Mombasa port,” Ogambi said in the letter copied to Cabinet Secretaries in key ministries.
They include Salim Mvurya (Mining, Blue Economy and Maritime Affairs), Kipchumba Murkomen ( Transport) and Rebecca Miano (Trade).
SCEA and its members believe in the principle of transparency and are concerned about the lack of clarity and justification for the new surcharges, Ogambi noted.
“While we may not be privy to the factors that inform your decisions regarding surcharges, we are writing to request that you seriously consider recalling and or staying your decision to increase these surcharges,” he says in the letter.
The lobby also wants to meet Maersk representatives to discuss the driving factors behind the decisions, and potentially work towards a solution that is mutually beneficial.
