Kenya and Tanzania have begun implementing a container guarantee service, effectively ending the long-standing requirement for cash deposit guarantees.

 

This move comes more than nine years after the Northern Corridor Integration Project Heads of State Summit recommended alternative ways to secure containers.

This month, Kenya joined Tanzania in removing a major trade barrier, years since the April 13, 2016 summit first urged the abolition of cash guarantees.

With the shift in business operations at the ports of Mombasa and Lamu, the cost of importing goods is expected to become relatively cheaper and less cumbersome after some major cargo handlers adopted the container guarantee service to replace traditional cash deposits.

At least 1,000 clearing and forwarding agents registered by the Kenya Revenue Authority—key players in daily cargo handling at the Port of Mombasa—adopted the new model on Wednesday.

This change could be a significant relief for smallADscale traders, who can now clear goods without paying a minimum of $500 per container as a cash deposit.

Traditionally, containers could not leave the Port of Mombasa without a cash deposit to ensure their return in good condition. Traders handling transit goods paid up to $5,000 for high-risk regions such as South Sudan and the eastern Congo.

It also meant that there could be delays, especially on weekends or national holidays, when banks were closed and traders had to wait until weekdays to process cash bonds, incurring demurrage costs.

Already, four shipping lines—including CMA CGM (the world’s second-largest) and MSC/Ocean Freight—along with over 25 percent of clearing and forwarding companies in Kenya, have signed MoUs with Viaservice, the firm that will provide container guarantee services.

Last week, the Kenya Ship Agents Association (KSAA), representing over 44 of the 87 registered shipping agents in the country, joined the initiative.

Under the new arrangement, the company known as Viaservice East Africa provides assurance services, charging a fee to importers and providing guarantee to owners of the containers to be returned.

The fee is a percentage of the actual value of an empty container, rather depositing cash equivalent to the whole value of the container.

Managing Director John Mathenge said this arrangement will advance best practices in shipping and logistics, and strengthen global trade competitiveness.“The solution also strengthens container safety and provides greater security assurance across the supply chain. Our mission is to simplify and facilitate global trade through strategic partnerships and innovation,” said Mr Mathenge.

With this development, small-scale traders can now compete with larger enterprises by clearing multiple containers on time without depositing cash.

It also means Kenya has become the second country after Tanzania to adopt the technology, with 75 percent of Tanzanian clearing and forwarding agents already aboard.

Officials say the new system promotes digital innovation and trade financing, eliminates trade barriers, and enhances operational efficiency.

s.“Shipping lines routinely demand cash deposits before cargo leaves the port as a guarantee for the return of empty containers. Billions of shillings lie idle every year, with over 2 million containers passing through Mombasa requiring a minimum $500 deposit,” said Mr Mabaru.

Shipping lines typically demand deposits of $500 and $1,000 for 20-foot and 40-foot containers respectively for cargo destined for Kenya.

For transit cargo, charges range from $1,000 to $5,000 depending on the risk level, with South Sudan and the DRC being the most expensive.

According to the World Trade Organization, container deposits in East Africa totaled approximately $1.5 billion. Estimated annual demurrage in East Africa is around $3 million per year.“This money is tied up and could be used to expand businesses. It adds to importation costs and ultimately affects consumer prices. Land-linked countries served by the port face numerous challenges that delay the return of empty containers,” said Mr Mathenge.

KSAA Chairperson Roger Dainty emphasised that the partnership aims to enhance efficiency and competitiveness in East African maritime logistics by promoting digital innovation and eliminating trade barriers.“This collaboration with Viaservice is a significant step forward for Kenya and the entire East African shipping and logistics sector,” said Mr Dainty. “It enhances efficiency, reliability, container safety, customer satisfaction, and security assurance across the supply chain.”In Tanzania, six shipping lines—including MSC Tanzania, Messina, Inchcape Tanzania (Hapag Lloyd), WOSAC, ONE, and WEC Lines—already onboard. ©

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