Focus on KRA as Customs delays at JKIA hit business

Businesses are stuck with unmet customer orders following delays in cargo clearance at the Jomo Kenyatta International Airport (JKIA).

A spot check by the Business Daily showed that several cargo and vending companies have been experiencing delays for about a month — a situation insiders blamed on the stringent customs clearance procedures under the Integrated Customs Management Systems (iCMS), which was recently installed by the Kenya Revenue Authority (KRA).

“The iCMS has been problematic for many users because of its demanding procedures. Many users are yet to fully adopt to its operations,” a clearing and forwarding agent said.

Another source, who requested anonymity said: “I have seen many disgruntled customers storming cargo sheds at the airport for an explanation about their stuck shipments”.

E-commerce business, Jumia Kenya, which links buyers with sellers through an online platform, is among the business whose agents have been unable to deliver on customers’ orders on time.

“We are experiencing delays in delivery of your order due to custom clearance. Apologies for delay,” Jumia wrote to one of its customers.

Jumia Kenya Managing Director Sam Chappate told Business Daily that there has been delays in clearing in recent weeks although he didn’t know the exact cause.

“There have been delay in the recent weeks, especially on our vendors’ orders, but I can’t confirm exactly what that is linked to,” said Mr Chappate.

Package delivery firm DHL Express has also been affected by the delays which it attributed to the iCMS.

“We have had challenges due to the stringent customs clearance process and the introduction of new customs systems (iCMS), due to its instability,” DHL Customs clearance supervisor John Muriithi said in an email to a customer seen by the Business Daily.

“It has impacted our clearance lead time and created a serious backlog, hence the reason for the delays which are highly regrettable.”
Customers also reported shipment delays by other cargo firms such as TNT and Delta Handling Services.

The taxman however downplayed the delays in cargo clearance when reached for comment.

“As part of the piloting process with a limited number of users we identified system issues in the development, deployment and testing phases.

A technical working group within KRA in collaboration with various stakeholders has analysed and fixed these system issues” KRA said in a response to queries by Business Daily.

Insiders in the cargo industry said the effects of the customs delay on customer shipment may worsen from May 10 when the iCMS is formally rolled out to other air facilities including Mombasa International Airport and Eldoret International Airport.

Last year, cargo handled at JKIA increased by 24.8 per cent to 340,832 tonnes while that handled at Mombasa increased by 11.1 per cent to 4,000 tonnes, underpinning the increasing significance of cargo business.

KRA last week notified airlines, shipping lines, agents, importers, exporters, clearing and forwarding agents, ground handlers, consolidators and courier service providers of the roll out of the new clearance system.

The taxman’s intention for iCMS is to make the process of goods clearance faster and transparent.

However, importers say that the lengthy air cargo clearance documentation is making the process complicated.

A notice issued by KRA last week shows that importers have to submit import declaration forms (IDFS), air manifests security bonds and air cargo declaration documents before their goods can be cleared.

All master airway bills must include the courier or consolidator PIN to enable cargo deconsolidation process, according to the KRA notice.

“Ground handlers/couriers are required to ensure their systems are ready to receive system to system Customs Release Messages (CUSRES) as manual releases will be discontinued,” KRA said.

KRA had targeted to train 2,354 clearance agents, 173 shipping agents, 175 cargo consolidators and 40 importers about the new system. The process is still on-going.

Kenya International Freight and Warehousing Association (KIFWA) chairperson Roy Mwanthi said about 150 members yesterday attended stakeholder engagement with KRA in Mombasa.

“If what KRA describes is what will be followed to the letter, it will cut clearance time by more than half. We have agreed with KRA that all clearing agents must be fully trained and passwords given prior to roll out,” Mr Mwanthi said.

Clearance of goods at the port of Mombasa also became a point of concern for many importers as a multi-agency team involving KRA, the Kenya Bureau of Standards and the Anti-Counterfeit Agency moved in to tame tax evasion and fake imports.

Last year, total cargo throughput handled at the Mombasa Port increased by two per cent from 30.3 million tonnes in 2017 to 30.9 million tonnes.

The total import traffic handled declined slightly from 25.6 million tonnes in 2017 to 25.5 million tonnes in 2018, according to KNBS data.