South Sudan to set up ICDs to counter rising port cargo charges

South Sudan will establish Inland Container Depots (ICDs) and Empty Container Depots (ECDs) as part of a raft of measures to reduce the cost of imports through the Port of Mombasa.

An assessment report has found that building depots in Juba will help mitigate the increased cost of imports from the ports of Mombasa and Dar es Salaam, particularly when insecurity disrupts transport routes to South Sudan.

These depots would offer a secure storage solution for goods and provide a more predictable supply chain for the landlocked nation. 

The study was facilitated by the South Sudan Revenue Authority (SSRA) and supported by the Mombasa-based Northern Corridor Transit and Transport Coordination Authority (NCTTCA).

Inadequate management of empty shipping containers has led to severe repercussions for South Sudan, impacting the government’s security and revenue collection while burdening consumers with higher prices.

The primary issues stem from importers illegally retaining containers and the resulting logistical breakdowns.

A study on South Sudan’s import trade highlighted three critical issues stemming from logistics mismanagement: prohibitive empty container deposit fees at ports, the diversion of cargo, and the dumping of expired or substandard goods.

These problems increase costs, undermine government revenue, and jeopardise public health.

It also followed suspected importation into the country of hazardous goods, the smuggling of unlicensed military hardware, which ends up in the hands of rebels, and high market prices for consumer goods.

Shingiro Kayonga, a business consultant for Panda, and Denis Ombok, an expert in customs laws and procedures, led the assessment team.

The report was presented to South Sudanese government officials, NCTTCA, and business leaders last week in Mombasa.

Addressing the forum, TCTTCA Executive Secretary Dr John Deng noted that the challenges associated with managing empty containers have imposed huge burdens on transport logistics.

“Today, we address a pressing logistical and financial challenge. The management of empty containers in South Sudan. This issue continues to impose significant burdens on transporters, traders, and government agencies, affecting the efficiency and cost of regional trade,” he stated.

The forum was attended by South Sudan’s ambassador to Kenya, Anthony Kon, and his Ugandan counterpart, Paul Akaro, who backed the initiative to streamline container management at the Mombasa port. Currently, a deposit of $5,000 (Sh645,000) is required for each container transporting goods to South Sudan.

Once delivered, only 28 days are allowed for the return of the empty container. Deng explained that any delays beyond this period incur substantial demurrage charges.

For 40-foot containers, the first seven days attract a fee of $40 (Sh5,160) daily, followed by $70 (Sh9,030) daily for the next seven days, and $100 (Sh12,900) thereafter.

For 20-foot containers, the charges are $20 (Sh2,580) per day for the first seven days, $35 (Sh4,515) daily for the next seven days, and US$50 (Sh6,450) thereafter.

Deng noted that in some cases, traders are compelled to pay replacement fees ranging from $3,000 (Sh387,000) to $6,000 (Sh774,000), depending on the age and condition of the container.

He noted that in some cases, traders are compelled to pay replacement fees ranging from $3,000 to $6,000, depending on the age and condition of the container.

In the report, the consultants say the problems facing cargo handling and empty container management in South Sudan are enormous.

“Taking empty container management as a case study, the reluctance with which some of our business community exhibit in returning empty containers to the shipping lines has made many clearing firms in Mombasa and Dar es Salaam fear or even refuse to clear goods destined for South Sudan,” says the report.

“This in turn causes losses to our business community since shipping lines are forced to hike empty container deposits,” it adds.

The assessment team recommended a custodian or accountable institution in South Sudan as vital to address this challenge.

The report revealed that empty containers are abandoned in different areas of South Sudan, including remote regions.

“Some containers are always turned into houses, shops and kiosks. This has greatly affected the steady return of containers to shipping lines,” it says.

The consultants recommend the establishment of an ICD and ECD facility at Nesitu near Juba and others at Nimule, Kaya and Nadapal in South Sudan and Kampala and Mombasa to manage containers.

The report says the facilities should have customs offices, customs bonded warehouses, container yards, standards offices, security offices, ICT offices, hotels, weighbridges, clearing and forwarding offices, shipping line offices, transporters’ offices and packing houses.

According to the consultants, having empty container yards near and within reach of South Sudanese producers is one of the most effective ways to mobilise, encourage, and introduce every South Sudanese to the culture of export business.

“This shall have a huge multiplier as far as economic development is concerned, including ensuring foreign currency inflow. Big producers and small-scale producers (under groupage arrangements) shall all benefit,” the report says.