Huge congestion of empty containers are piled at the CFS in Mombasa as the world is grappling with a shortage that has seen freight charges grow by two folds.
The congestion at the Container Freight Stations (CFS) has been occasioned by inadequate space allocated for empty vessels at the Port of Mombasa to facilitate their repatriation on time as priority is given to export goods.
Kenya Ships Agents Association (KSAA) Chief Executive Officer Juma Tellah says the increasing number of uncollected containers is as a result of the East African Ports not allocating adequate space for empty containers at their terminals leading to few empties being shipped back.
Mr Tellah said Kenya Ports Authority and Tanzania Ports Authority prioritise exports over empty containers in allocating of space at different terminals leaving most empties piling at different container depots.
“We are having congestion of empties in our CFSs since very few containers are being returned due to limited space allocated for the empties at the regional ports, hampering their return,” said Mr Tellah.
The official said most of the agents are giving priority to exports than empties since its economical than carrying empty ones, straining the supply, especially in China.
The shortage of containers has seen a sharp rise in sea freight charges for over a year now.
“Scarcity of empty containers has resulted to high cost of doing business since importer must pay not only for the transport of the full import container but also for the inventory holding cost of the empty ones that is why the cost has increased,” he said.
A shortage of empty shipping containers in China, Kenya’s major source market for goods, has pushed sea freight cost from $1,388 to $2,314 for 20-foot container with a 40-foot container doubling from $1,851 to $3,703 in the last one year.
According to the latest United Nations Conference on Trade and Development (UNTCAD) policy brief, carriers, ports and shippers were all taken by surprise after empty boxes were left in places where they were not needed, and repositioning had not been planned for during Covid-19 pandemic peak.
According to UNTCAD, trade flows have increased at the moment after some governments eased lockdowns and approved national stimulus packages, thus causing a shortage of containers on the back of enhanced demand.
“The increase in demand was stronger than expected and not met with a sufficient supply of shipping capacity,” UNCTAD said.
The UN agency said most of the shippers find it uneconomical to ferry back empty containers back to Asia from Africa and South America due to long routes.
The recently launched port of Lamu continues to record good business with transshipment cargo forming the bulk of the freight handled at the facility. Last week, the port received the largest consignment of 365 containers of transshipment cargo, the biggest of the six ships to have been shipped to the Port since its operationalisation in May.
Kenya and Ethiopia have ratified a procedure manual that will guide the two countries in the implementation of the Moyale One-Stop Border Post (OSBP) that was recently commissioned, paving the way for its full operationalisation.
The new measure by South Sudan implies that all goods to this landlocked nation from either the port of Mombasa or Dar es Salaam through the border points of Kenya and Uganda will have to be issued with ECTN at a cost of up to $110 depending on the size of the cargo.