Freight traders back port privatisation

July 27, 2011

, NAIROBI, Kenya, Jul 27 – Freight forwarders from the East African region have added their voice to those supporting the proposed privatisation of the port of Mombasa to improve efficiency.

The Federation of East African Freight Forwarders Associations (FEAFFA) suggested that the one-stop-shop concept that has been adopted at many East African border points should be extended to the port.

Besides consolidating the operations of about 15 government agencies whose authorisation is required before moving goods inland, such a model would greatly cut the time and costs incurred by transporters in moving cargo within the community.

“The private sector tries to maximise profits and so the faster we turn out cargo, the better it is for us,” admitted Merian Sebunya the Secretary General of the apex body representing the freight forwarding industry in the region.

Her sentiments were echoed by Uganda Freight Forwarders Association Chairman Charles Kareba who pointed out that privatisation of port and its operations is the trend the world over as it ensures transit efficiency.

Plans to privatise the port have been met with resistance by mostly the coastal politicians and residents who fear losing their jobs if this exercise is undertaken.

However, with the port in public hands, the facility has been prone to political interference while the board and management do not necessarily feel compelled to deliver good results.

Previous attempts to bring in some private sector players to carry out some port operations have not borne fruit as international best practices were not followed.

According to the Kenya International Freight and Warehousing Association, it still takes a minimum of seven days to process documents when the Kenya Revenue Authority’s electronic system dubbed ‘Simba System’ is down.

Globally, the best ports in the world such as Singapore and Dubai take a few hours.

In addition, this incompetence makes East African goods uncompetitive given that transportation costs in the region are estimated to be nearly 50 percent higher than other developing regions.

A recent World Bank survey indicates that a 10 percent reduction in logistics costs would translate into a 25 percent increase in trade flows.

These statistics have however not been taken seriously by the East African governments which have not done much to address the causes of the high logistical costs which include road blocks, delays at weighbridges and corruption.

But while appreciating that the private sector also contributes to the high cost of doing business, FEAFFA has taken it upon itself to come up with an initiative that it hopes will reduce the inefficiencies by at least 10 percent.

The association has developed a Code of Conduct that aims to promote ethics and inject professionalism in the clearing and forwarding sub-sector.

FEAFFA Vice President Gerald Kagumo explained the rationale behind this was to create awareness among their members about their rights in the supply chain and know what is expected of them.

“Corruption thrives on uncertainties but once our people know that the process of clearing cargo, the cost of doing business and how they should be addressed, then they don’t need to engage anybody in corruption,” Mr Kagumo added.

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