This archive report was first published on 19 November 2019.
Kenya's Billions in Lost Cargo Levies ¶
On November 19, 2019, Kenya was losing about Sh100 billion yearly in freight charges for imported cargo, paid to foreign shipping lines docking at the Port of Mombasa.
According to experts, the country's lack of a national shipping carrier is the main reason for this loss. A national shipping carrier would enable Kenya to benefit from the charges levied on imported cargo.
Experts compare a national shipping carrier to Kenya Airways (KQ) in the aviation industry, emphasizing its importance in reducing the cost of goods and doing business.
Speaking to Shipping and Logistics, Kifwa national chairman Roy Mwanthi said, 'There is need for Kenya to have its own national shipping carrier. It is prudent because we are advocating for shipper freight rates which will end up reducing the cost of imported goods and it will in time reduce the cost of doing business.'
Mr. Mwanthi added that a national shipping line will provide stiff competition for foreign vessels, pushing them to lower their freight charges.
Andrew Mwangura, a maritime and shipping expert, noted that most countries in Africa have not enacted the Cabotage law, which protects the domestic shipping industry from foreign competition.
Developed countries such as the USA and Japan only allow their shipping lines to trade in their waters for the benefit of their economies.
Car Importers Association of Kenya (CIAK) national chairman Peter Otieno said a locally-owned national shipping carrier with a well-funded government programme will save Kenyan importers billions.
Mr. Otieno also called for the formation of Indian Ocean Services (IOS) that will be run by the Kenya National Shipping Line (KNSL) to ferry cargo to other East African countries.
