23 Sept 2019
RWANDA: Deposits for Mombasa Shipping Containers Axed
The US$2,000 container deposit guarantee requirement at the port of Mombasa has been removed.
A Memorandum of Understanding (MoU) was signed by Fred Seka, President of the Federation of East African Freight Forwarders Association (FEAFFA) and also Chairman of the Rwandan Freight Forwarders Association, and Alexis Perinet-Marquet, Director of Product and Business Development at Swiss-based transport services firm Viaservice SA. According to media reports, the signing took place at the third Global Logistics Convention held in Kigali, Rwanda, which ended on 30 August 2019.
The agreement removes the container deposit guarantee of US$2,000 required on each container before it is released for transportation. The move has been welcomed by Rwandan and other regional businesses who have long had issues with the deposit scheme.
Rwanda, being landlocked, has to ship using either the Port of Dar es Salaam in Tanzania, or the port of Mombasa in Kenya. Despite the greater efficiencies at Mombasa, the high deposit charge for containers has made using Dar es Salaam more cost efficient. Seka said that the container guarantee charge at the port was impeding business, as the amount charged per container was too much. Now that it has been removed, the cost of doing business in Rwanda will also fall.
A recent study by the United States Agency for International Development on the impact on Rwandan trade from the Kenyan container cash deposit requirement stated: “Goods delivery from Mombasa to Rwanda takes two weeks on average… Often, when the imported goods reach Mombasa, companies may not have available cash to make container deposits. It can take an additional two to four weeks to actually make the cash deposit. Thus, some products may expire even before they get into the Rwanda market.”
Aside from removing the container deposit guarantee, there was also an MoU signed at the convention between FEAFFA and the Dubai-based National Association of Freight and Logistics. The agreement is intended promote collaboration and interaction between members of the organisations to boost the freight logistics businesses between the Middle East and East African regions represented by the two parties.