Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Kenyan shippers cry foul over piracy

NAIROBI, Kenya, Mar 8 – The Kenya Shippers Council has called on the government and the international community to urgently address the issue of piracy which has led to a huge rise in transportation costs.

Chief Executive Officer Gilbert Langat said on Friday that the threat of piracy has forced shipping lines to introduce a myriad of charges which are passed on to the end consumer.

“The shipping line has to recover their costs so freights rates have gone up by a substantial percentage and so have war risk charges, fuel adjustment factors, voyage time and a host of other costs,” he said.

The Gulf of Aden has over the last two years been invaded by Somali pirates who hijack vessels and demand huge ransoms from the shipping lines. It is estimated for instance that the capture of NV Delvina with 15,050 tonnes of wheat grains cargo led to the loss of production capacity and lack of sales and eventually resulted in a loss of $3.6million.

Mr Langat said the vice had also affected the competitiveness of East African businesses as well as the small scale farmers who lose contracts when they fail to deliver their fresh produce to the international markets on time.

“Our fresh produce which is moved by sea has lost market. We for example move a lot of avocados but they have a shelf life and if it used to take 21 days to get to the market and now it takes 43 days to hit the same market, then you will require controlled environment containers in which those fruits can stay fresh which is expensive to hire,” he explained adding that the containers which used to cost them $1,800 were now being hired at $4,800.

Such costs make the traders uncompetitive particularly when compared with those from Brazil who are able to deliver their products on time and at a much lesser costs.

While he acknowledged that a permanent solution to the issue would involve ensuring political stability in Somalia which would take a long time to achieve, he suggested that the government should consider providing escorts for their cargo to ensure that they reach their intended markets without any delays.

Mr Langat spoke during a press conference where the Council expressed concerns over the new motor insurance underwriting guidelines which they said if implemented would see insurance premiums go up by between 60 to 100 percent. This would translate into additional costs for cargo owners, it complained.

Advertisement. Scroll to continue reading.

“The new guidelines will make the cost of insurance unbearingly high for road transporters. They will therefore have no option but to pass on these increases to consumers of their services through higher freight services,” he warned.

He further feared that unscrupulous transporters might result to using fake insurance certificates which will spell doom for the economy and therefore called on the Insurance Regulatory Authority to engage the stakeholders on the issue.
 

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...