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DOCUMENTATION AND ROLE OF CARGO INTERVENERS INPORT OPERATIONS By P.J. Shah

There are various types of goods thatpass through the Port of Mombasai.e. local imports, local exports,transit imports, transit exports andtransshipment. Each type of cargo iscovered by dierent types of

shipping documents and undergoesdierent clearance processes.

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Similarly there are not only dierent types of vessels whichbring cargoes to Mombasa i.e. conventional vessels, containervessels or roro vessels which are handled by !" shipping linesoperating in Mombasa but also dierent si#es and types ofcontainers in use e.g. $%&T or "%&T Standard, 'eefer, &lat'ac(, )pen Top, *igh +ube, Platform etc.

There are also dierent types of truc(s in use fortransportation of containers from the Port of Mombasa to theirnal destination such as single truc(s, pulling Truc( - Trailer,SemiTrailer with sides or /at bed and covered body truc(s.

Shipping lines oering containeri#ed cargo service have

regular sailings to Mombasa with fre0uencies of wee(ly orfortnightly or monthly calls whereas shipping lines oeringconventional cargo service have either spot calls orinducement calls.

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*ence for the purpose of today1s

wor(shop 2 will conne myself toclearance of containeri#ed local andtransit imports as they not only

constitute the bul( of the tra3cpassing through the Port of Mombasabut also face numerous challenges inclearance.

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+learing goods through the variousinterveners involved in the process i.e. 4enya

Ports 5uthority 64P57, 4enya 'evenue5uthority 64'57, 4enya 8ureau of Standards64E8S7, 4enya Plant *ealth 2nspectorateServices 64EP*2S7, Port *ealth 5uthority 6P*57,

9airy 8oard of 4enya 69847, :ational 8iosafety5uthority 6:857, 5nti+ounterfeit 5gency65+57 and Port Police and forwarding them totheir nal destination is not only a very

complex but also lengthy and cumbersomeexercise as will be seen from the /ow chartswhich loo( li(e a Spider1s ;eb and which areannexed herewith as 5ppendix 2 and 22

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&rom these &low +harts the delegates will

observe that there are altogether

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The shipping documents re0uired for clearance

of the two types of cargoes are as listed underitem numbers 6!7 of 5ppendix 222 - 2>.

8esides forwarding the relevant shipping

documents the 2mporter must also remitade0uate funds in advance to enable his+learing 5gent to pay the necessary 2mport

Taxes if it is local cargo and other third party

charges such as shipping line charges, portcharges, transport charges etc. on a shipmentof his.

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The clearance process starts with the 2mporter.*e has to ensure that he forwards a complete

set of shipping documents listed under itemnumbers 6!7 of 5ppendix 222 - 2> for a shipmentto his +learing 5gent atleast @ days prior to theexpected date of arrival of the carrying vessel

in Mombasa to enable the latter to clear andremove the containers from the Port and returnthe empty containers to the shipping line1snominated depot in Mombasa within the

following free periods given by the 4enya Ports5uthority, 4enya 'evenue 5uthority andshipping line concerned respectivelyA

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Kenya Ports Authority:

Bocal imports" days from the day after the date of lastsling

Transit imports C days from the day after the date of lastsling

N!:The date of last sling means the date on which avessel completes discharges of her cargo in the Port.

Kenya Re"enue Authority #!" days from the date of the+ustoms Entry

Shi$$in% Lines:

Bocal importsC to !" days from the date of discharge of acontainer in the Port depending on the shipping line involved.

Transit imports $! to "= days from the date of discharge of acontainer in the Port depending on the destination andshipping line involved.

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Similarly under Section

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;ith so many interveners involved

coupled with lengthy andcumbersome clearance procedures itbecomes a real challenge for a+learing 5gent to clear and remove a

local container from the Port withinthe free period allowed by 4P5.

;hilst the free period on transit

containers is ade0uate for the purposeof documentation, it again poses achallenge in its ota(e from the Port

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&ailure to clear and removecontainers from the Port and returnthe empty containers to a shippingline within the free periods statedabove result in the 2mporter having

to incur various demurrage chargesenumerated belowA

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Port Authorities: &'FT Container

('FT Container 'eMarshalling charge DSF !!%.%% DSF

!G=.

Stora%e Char%e:

Bocal containersA &irst < days DSF

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Transit containersA &irst $ days DSF

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Shi$$in% Lines:

+ontainer demurrage chargeA&irst @ daysDSF ".%% to DSF !%.%%

5DSF H.%% to DSF $%.%% I I

:ext @ days DSF !%.%% to DSF $%.%%DSF $%.%% to DSF "%.%% I I

ThereafterDSF !".%% to DSF

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Custo)s Authorities:

+ustoms ;arehouse 'ent K DSF%.

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Experience shows that 2mporters are not only not conversant withthe 2mportation rules and weight restrictions but are also ignorantof their rights and obligations.

&or instance 2mporters as( their Shippers to load more cargo in acontainer than is allowed under the axle load restrictions existing in4enya and the neighboring countries or load some personal itemsli(e a Television set or 'efrigerator in the container withoutdeclaring them on the shipping documents or leave it to theirShippers to choose a shipping line for shipment of their goods fromthe Port of loading to the Port of discharge instead of doing itthemselves or as(ing the Shippers to obtain freight rates, terms ofcarriage and destination charges from dierent shipping lines forcomparative purposes.

5s a result of this ignorance 2mporters have to either suerindenite delays in receipt of their goods or end up payingadditional destination charges to the shipping line in Mombasa orpenalties to 4'5 or additional transport costs to a local transporter.

There have also been instances where

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an 2mporter has paid a part amount in advanceto his Shipper with the balance to follow before

the carrying vessel arrives in Mombasa and thenfails to raise the balance amount in time, and

an 2mporter is in possession of all the re0uisiteshipping documents for a shipment but has no

monies to pay for the destination charges whenthe shipment arrives in MombasaL

an 2mporter has lost his monies and goodsthrough improper sale contracts with the Seller

or appointment of ine3cient or unscrupulous+learing 5gent or Transporter.

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2n all these instances an 2mporter

invariably fails to clear his shipmentin time and thereby incurring heavydemurrage charges or ending uppaying abandoning his shipment to

4enya +ustoms for sale by Public5uction.

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5nother common problem that has beenexperienced over the years and that ismainly with transit cargoes is that an2mporter sends copies of shippingdocuments for the same shipment to

more than one clearing agent inMombasa, thereby not only creating aconfusion as to who is the right clearingagent to handle his shipment but alsoending up in either incurring additionalcosts or losing his shipment altogether.

E i l h th t th i i i bl d l i

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Experience also shows that there is invariably a delay inreceipt of shipping documents, especially from2mporters in the neighboring countries as thesedocuments are transmitted from the Seller1s ban( to the

latter1s correspondent ban( and from the latter to the2mporter1s ban(. 5fter securing release of the shippingdocuments from his ban( the 2mporter then sends themto his clearing agent.

This movement of shipping documents from one ban(to another ban( ta(es time. There is also the tendencyon the part of an 2mporter to not only delay securingrelease of the shipping documents from his ban( butalso remittance of funds in advance to his clearing

agent for payment of import taxes or third party chargesuntil a day or two before the expected time of arrival ofthe carrying vessel or at time after a vessel has arrivedin Mombasa in order to save on nance costs.

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2t is therefore very essential that 2mporters both in4enya and neighboring countries are sensiti#ed ontheir rights and obligations including use of correctI2:+)TE'MS for shipment of their goods.I2:+)TE'MS stand for I2nternational +ommercialTerms.

There are !< commonly used I2:+)TE'MS such as

+2&, &)8 etc. which are recogni#ed by +ustoms and+ourts around the world as the standard set ofrules for global commerce. N2:+)MTE'MS are notonly rules of trade logistics that describe the

responsibility of the buyers and sellers in deliveryof physical goods but are in essence denitions andguidelines for sales contracts.

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;henever crisis arise in the Port of Mombasa, which isalso a legally ga#etted +ustoms 5rea, the business

community starts pointing ngers at the management of4P5 without analy#ing how the crisis has come about. 2fa crisis has come about due to nonavailability of berthsor oOoadingloading e0uipment or lac( of labor orstorage space then it is 4P5 who is responsible for the

same but if it has come about due to delay indocumentation or evacuation of cargo then it is eitherthe 2mporter or 4'5 and other overnment 5gencies6)5s7 who are responsible for the same.

&or the information of delegates 4P5 acts as stevedore

to the shipping line by providing berthing space,loadingoOoading e0uipment and labour and as acustodian of cargo to 2mporters by providing storagefacility and security.

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5lthough the entrance channel to the harbor was recentlywidened and container terminal berth lengths were

increased by 4P5 this still does not allow the latter toaccommodate container vessels with a carrying capacity ofmore than G%%% containers.

*ence the Port of Mombasa still continues to be a feederport i.e. containers destined for Mombasa are discharged

from panamax or post panamx vessels with carryingcapacities of between G%%% to !%%%% TEDs at ports li(eSalalah, eddah, ebel 5li, 4ofa(an, +olombo, 9urban, Port4lang or Singapore and then transshipped from there to

Mombasa in smaller feeder vessels not exceeding

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;hilst the roles of 4'5 and other overnment 5gencies6)5s7 are to protect government revenue and preventimportation of substandard or fa(e or banned goods

and diversion of transit goods into the countryunfortunately this is not done with a balancing act ofprotecting government revenue and at the same timefacilitating unhindered /ow of goods due to rigid andduplicated rules and lengthy procedures. Dnder theE5++M 5ct $%%" 4'5 is also mandated to regulate theclearing and forwarding industry by vetting andlicensing +learing 5gents and Transit Transporters on anyearly basis.

There are over !%%% licensed +learing 5gents rangingfrom one or two man shows 68riefcase 5gents7 to2nternational companies operating in 4enya handlingboth Seafreight - 5irfreight.

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The introduction of Simba System by 4'5 waybac( in $%%= has brought about some benets tothe 2mporters but the business community has yetto achieve the full benet of the system as someof the remaining modules e.g. Paybox, Targeting,2mporter proling, automatic online bondcancellation etc. have yet to be introduced by 4'5

who are still insisting on presentation of hardcopies of shipping documents.

Dnfortunately human intervention is also there.2t is hoped that when the Single ;indow System

comes into operation sometimes next year theclearance process will become faster, smootherand /awless as it will not only be a paperless onebut also one without any human intervention.

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Similarly although $"@ operationswere introduced in the Port of

Mombasa more than < years ago, thebusiness community has yet toachieve full benet of it as some of the

parties to the agreement are still notwor(ing round the cloc( e.g. shippinglines, ban(s etc. &urthermore 4'5 arenot doing vericationsscanning ofcargo at night, thus defeating thepurpose of wor(ing round the cloc(.

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2n order to cope with the increased volumeof business passing through the Port of

Mombasa against a bac(drop of limitedfacilities 4P5 started nominating someprivate +ontainer &reight Stations 6+&Ss7about = years ago to handle local containers

on their behalf but here again 2mportershave yet to benet in terms of savings incosts and clearance time. )n the contrarythere have been numerous complains about

delays in transfer of containers from the Portto +&Ss nominated by 4P5 and incurrence ofunnecessary additional charges.

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2n conclusionL the 5uthorities need to review their business

processes by eliminating rigid and outdated rules and

nontari barriers and embrace modern technologysuch as forensic audit in order to prevent lea(age ofrevenue but at the same time be able to provide ane3cient and customer friendly environment. &orexample 4P5 is not allowed to berth a vessel until a

ship1s manifest is approved by 4'5. 5t times thisleads to delay in berthing of vessels and in turn delaysin clearance of urgently needed cargo not to mentiondelay in collection of revenue by 4'5.

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the 2mporter needs toA

properly plan importation of his shipmentsL

understand his rights and obligations inmaritime trade - transportationL

get familiar with import and weightrestrictionsL

appoint an e3cient and reliable +learing5gentL

ensure submission of shipping documents andfunds in time to his +learing 5gentL and

appoint an e3cient and reliable Transporter.

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Thank you all.

By P.J. ShahMombasa

20thNovember 2012