In 2008, the world went through a difficult global economic recession which impacted severely on maritime trade, causing ripple effects on all participants in the value chain including ship leasing companies, cargo terminals and shipping lines, among others.

Global container volumes dropped in 2009 by 12 per cent, causing, for the first time, negative growth in the history of container trade. Most ports in the PMAESA (Port Management Association of Eastern and Southern Africa) region experienced a decline in cargo volumes or modest growth in the year 2009 compared to 2008.

Nevertheless, 2009-2010 have been years of recovery with world trade growing by about 13.5 per cent in 2010. Luckily for us in this region, having not suffered much from the impact, the growth in total traffic in 2009 compared to 2008 was about 16 per cent.

The port of Mombasa is probably the only one to have registered a major growth in total cargo throughput in the region at 16.1 per cent while her container traffic grew by a mere 0.5 per cent in 2009.

In light of the forgoing, there have been recent developments and medium-term prospects for the container market and the liner shipping industry where shipping lines and terminal operators have reviewed options for cutting down costs and optimize resource utilizations. Such measures include industry consolidation efforts with the creation of mega vessels now entering the market, motivated by economies of scale. Most terminal operators either cancelled, delayed capacity expansion plans or re-engineered the operations to contain costs as they waited for the economy to fully recover most likely by 2012/13.

However, given that this review of options was only for the short term, the industry has been taking advantage of the slack in container trade to re-organize, develop and implement their long term plans given that even on the eve of recession, ports were already overwhelmed by heavy congestion.

Currently, global shipping forecasts signal brighter times ahead. World ports are again rebounding from the global economic downturn to realize traffic lost during the crisis. Container traffic has bounced back, especially in China and Europe, faster than observers had predicted.

In the recent past, we have also witnessed a high degree of induced political openness and increased democratization worldwide.  Naturally, wider political space is accompanied by broader economic dimensions that are manifested in extended selection and availability of goods and services.  This latitude lends itself very well to enhanced trade both local and international.  Hence we expect higher growth in trade including through our ports albeit after some time. 

In our region, recent peaceful elections in Uganda and a successful referendum in Southern Sudan portend significant economic growth and increased business through our port. Ports are built ahead of demand. Hence these welcome developments require increased capacity and more efficiency on our part.

Traffic Growth
In the last five years, our total traffic has grown from 14.4 million tons to about 19 million tons in the year 2010 reflecting a growth rate of about 7 per cent which is almost more than double what has been experienced in the world. Similarly, we have also registered a growth rate of nearly 9 to 9.8 per cent for the container traffic.

Our target is growth in our transit traffic coming from Uganda, Rwanda, Burundi, and D.R. Congo and to some extent now from Southern Sudan.  This traffic has risen from 3.8 million tons in 2006 to about 5.4 million tons in 2010, recording a growth rate of 9 per cent when compared with the overall growth of 7 per cent.

We are also putting up a second container terminal with a 1.2million TEU capacity in preparation to handle larger vessels. This project will run parallel with the dredging of the channel.  At the same time the government is in the process of opening up the northern Kenya as a trade route by building a second commercial deep water port in Lamu. 

Capacity
As of now, the Kenya Ports Authority is operating at a level of nearly 75 to 80% of the capacity of the port that is including the container terminal and the main port, so there is need to generate extra capacity if we are to meet the goals as targeted in the Vision 2030.

At the same time our East African region is one of the fastest growing regions worldwide. The Kenyan economy is expected to grow at a rate of 5.3 per cent while that of the other East African community countries is expected to grow at between 6 and 7 per cent.

In alignment with this strategic thinking and planning, it is encouraging to note that Kenya Ports Authority has not been left behind in setting the course.  We have strategically invested in modern cargo handling equipment, terminal and channel expansion, information technology and involved private container freight stations to enhance efficiency.

DREDGING AND WIDENING THE CHANNEL TO ACCOMMODATE BIGGER VESSELS

Growth in container traffic has more often than not brought on board bigger vessels that are longer and have deeper draft. This means that they need more water to accommodate them hence the reason it is necessary to dredge parts of the port to welcome those kinds of vessels. So far Mombasa has been receiving vessels measuring about 180 meters in length and 9.5-10 meters in terms of the depth of water they require to berth.  However, currently vessels calling at the port of Mombasa have an average length of about 200 meters to 225 meters.

This means that the current 600 meters long container terminal quay cannot comfortably accommodate three of these vessels at a time especially if they are over 200 meters long. After construction of berth 19, this will mean an addition of a further 160 metres, putting the quay in a position to accommodate at least three vessels with a length of 235 meters each and an allowance of 15 metres between the vessels. The dredging which is being carried out by the Government of Kenya will increase the depth of the access channel from minus 13.5 metres to minus 15 metres and widen it to 300 meters at its narrowest point to accommodate bigger vessels.

Containerization
Containerization is the fastest growing sector in the shipping industry with global trends indicating that more than 70 per cent of world dry general cargo maritime trade is carried in boxes. The largest container ship in the world with 18,000 TEUs is under construction in South Korea and one of the shipping lines calling in our port has already ordered 10 units to be delivered between 2013 and 2015. 
Growing sizes of vessels and the accompanying demands for higher and better performing equipment together with timely supply of cargo and ship services has put pressure on both terminal operators and Port authorities. Hence, more, vast, infrastructural bigger and deeper-watered ports will be required to serve ships and trade. In the same vein; wider, deeper and safer navigation channels will be desirable to support the bigger vessels.

The Port of Mombasa is very far from accommodating this new generation of container vessels given its narrow channel and maximum draft of 11 meters. These restrictions are slowly reducing Mombasa to feeder status with most cargo traffic being trans-shipped through hub ports like Salalah, Jeddah, Durban, Singapore among others.
To enable the port to continue serving its current and emerging markets effectively and considering that container traffic through the Port has been growing steadily at a rate of 12.3 per cent per annum, dredging of the Kilindini channel and widening of the turning basin is paramount. Last year the port handled 695,600 TEUs which is way above its designed capacity of 250,000 TEUs.

Project Scope of Works
In a bid to regain its status as the leading hub port within the region, the Authority in December 2006 commissioned the Japan Port Consultants to undertake a consultancy study on the feasibility of dredging the channel and turning basin. The study revealed that the dredging shall cover the entrance channel and turning basin and berths 4 to 18. The dredging will be 15.0 m in the inner channel and 17.5m in the outer channel.
The project has been going on in phases since 2007. Phase 1 was the Consultancy study while the current Phase 2 is dredging of the outer and inner channels. Phase 3 will concentrate on dredging of the main channel. The final Phase 4 will be dredging of Panamax berths 12-14 and near Kipevu Oil terminal (KOT) and new Container Terminal berths 20-23.
Project Costs and Funding
The approximate cost of dredging and other works funded by the government of Kenya is USD 66 million. The dredging is being carried out by a world re-known dredging firm M/s Van Oord Dredging and Marine Contractors of Netherlands. 
Benefits
The project will have immense benefits to the Port of Mombasa’s operations, key of which include:
 Ability to meet future regional trade and global shipping demands. Completion of the dredging will enable the port to accommodate post panamax vessels with an overall length of 300 meters.
 Navigation will be easier and safer round the clock and through all seasons.
 The Authority will accrue financial benefits in form of returns on capital invested.
 Mombasa port will join the league of hub ports to serve other feeder ports
 It will contribute to expanded and improved trade among countries and generate more employment.

Equipment
In 2001, Kenya Ports Authority instituted a comprehensive phased equipment rehabilitation and replacement policy to improve efficiency. Soon after, the Authority bought four new Ship to Shore gantry (STS) cranes, two rail mounted gantry cranes(RMG) and twelve Rubber Tyred Gantry (RTG) cranes in 2004 replacing the old ones which had surpassed their lifespan.

Additionally, a fleet of versatile reach stackers were acquired to complement shore handling equipment. In the same year, three new berthing tugs were acquired. The 55 to 60 ton bollard pull tug boats are multipurpose, stronger and easy to manoeuvre. Four pilot boats – two being used for security patrols – and two mooring boats were also acquired to streamline marine operations. Since last year, the authority has acquired a 100 tone mobile harbor crane, 10 Rubber Tyred Gantry cranes, 4 reach stackers, 10 terminal tractors and 2 mooring boats. 3 Ship to Shore Gantry cranes and two harbor mobile cranes are expected by August this year.

KPA ICT DEVELOPMENT

Recently, the ICT – SAP system was upgraded and can now process documents faster than before. KPA is closely working with other anchor stakeholders towards achievement of what forms part of the last phase of the Information Communication Technology strategy - the national single window system. These measures are geared towards creating more capacity to enhance efficiency and propel the port towards attaining and sustaining world class standards. The Kenya Ports Authority has made significant strides in automation of essential port services in line with other efforts towards realization of its vision - World Class Seaports of Choice.
This is a journey that will eventually see Mombasa become an e-port with all systems web-enabled and with full connectivity. Although ICT development assumed modern shape in KPA eleven years ago, it is worth noting that even in the early 80s soon after KPA’s formation, some semblance of ICT was still in place.  The big difference though is that what could pass for an ICT department in the 80s now belongs to the archives in comparison with the modern state of the art ICT currently in operation.

The management continued to progress efforts to introduce modern computerisation and networking within the port but it was not until 1999 when serious proposals to introduce a modern, dynamic and comprehensive automated system were started. In 2000, KPA envisioned to make the port of Mombasa a world class sea-port with a view to transforming it into an e-port.

To this end, KPA adopted a fully integrated ICT Strategy that embraced an Enterprise Resource Planning (ERP) system, a Water Front system, and a Community Based System, all web enabled. The ERP system integrates all functions in KPA to provide on-line and real-time information hence assisting in making timely decisions. And out of the many available ERP sytems, KPA preferred Systems Application Product (SAP).
 
SAP which went live on 1st July 2002 comprises modules that handle Human Resources Management, Financial planning and Control, Material Management, Plant Maintenance, Project Systems management, Payroll and Travel Management.

The Kilindini Waterfront Automated Terminal Operations Systems (KWATOS) went live on 1st July 2008. The system has streamlined planning and management of information system for the waterfront and cargo operations. KWATOS has automated operations at the Container Terminal, Conventional cargo, Marine services and the Inland Container Depots.
 
Benefits of the waterfront system include:
• Reduced Human intervention due to system controls that are based on authorization
• Reduced cargo documentation processing duration from an average of 3 hrs to 1. 5 hours.
• Reduced cargo dwell time from an average of 8 days to 5 days
• Reduced port clearance time from 5.5 days to 3 days
• Enhanced planning process both in the yard and on board ship
• Easy access of statistical data for planning and decision making
• Enhanced audit trails, hence minimized cargo pilferage at the port
• Increased revenue generation.

The third and final phase - the Community Based System (CBS) now known as the National Single Window System - is under implementation.  Funded by the World Bank, the system is a flexible automated information sharing resource that will eventually link the port community users via electronic means to allow secure exchange of authorized data between partners.

PERFORMANCE (1978-2010)
The Port of Mombasa recorded a throughput of 6,071,290 tons in the year 1978, when the Kenya Ports Authority came into being through an Act of Parliament.
This was comprised of 4,266,814 tons of imports, 1,799,999 tons and 4,777 tons of exports and transshipment respectively. Last year (2010) the port registered 18,934,000 tons which comprised of 16,201,135 tons of imports, 2,574,593 tons and 158,272 of export and transshipment respectively. The increase registered over the years represents 212 per cent.

Container:

On container traffic, the port handled 9,093 TEUs in 1978 comprising of 5,817 TEUs and 3,217 TEUs of full and empty containers respectively. In the years between 1978 - 1987, the average container traffic grew at 35.8 per cent. In the second and third decade the average container growth stood at 7.4 per cent and 10.2 per cent respectively.

Container traffic increased from 9,093 TEUs in 1978 to 695,600 TEUs in 2010, an increase of 7,550 percent. In 2010, the Port handled 695,600TEUs comprising of 460,228 TEUs and 235,372 TEUs of full and empty containers respectively.

PORT OF MOMBASA POSTS IMPRESSIVE PERFORMANCE

The port of Mombasa once again recorded an impressive performance in the year 2010 against odds of global economic recession.  There was traffic growth in almost all market segments including container traffic, exports, transit and transshipment.

Although the overall cargo throughput dropped by a marginal 0.7 percent, container traffic recorded an impressive performance of 695,600TEUs up from 618, 816 TEUs in 2009, a growth of 12.4 per cent. Total exports also increased by 5.1 per cent while transshipment rose by 50.4 per cent.

The transit market also recorded significant growth in traffic with a total of 5,381,754 tons being handled up from 4,980,780 tons in 2009 representing a growth of 8.0 per cent. Uganda which accounts for almost 70 percent of the transit traffic registered a 6.3 percent growth with a total of 4,232,735 tons compared to 3,980,780 tons in 2009. Others were Southern Sudan, D.R. Congo and Rwanda who registered a growth of 33.5, 15 and 49.1 per cent respectively.

The growth in container traffic was attributed to improved efficiency at the terminal with the acquisition of new equipment, implementation of ICT systems which has improved cargo clearance processes.

The decline in total cargo throughput from 19.06 million tons in 2009 to 18.93 million tons in 2010, or 0.7 percent drop was caused by a reduction in imports by 1.9 per cent. This is attributed to the reduction in import of relief cargo as most of the region experienced relative political stability. Moreover, food production in the region as well as in the country improved compared to 2009 when the country had to import huge quantities of grains to meet the food shortages in the country.

Security
Security concerns continue to remain a top priority in global ports’ strategic plans, hence the reason for KPA’s continued updating of its safety and security measures to bolster customer confidence. KPA is compliant with the International Ship and Port Facility Security (ISPS) code which entails:

• Implementation of an Intergrated Securitiy System improvement pragramme to address electronic access controls, surveillance and detection.
• Training of port security staff on maritime security modules.
• Preparation of port security procedures and guidelines, among others.
KPA has constructed a watch tower to further bost its existing security measures. The super structure is fitted with a radar system and ClosedCircuit Television (CCTV).

Way forward
To ensure that the port of Mombasa is responsive to current and future global and regional developments, Kenya Ports Authority plans to:

• Develop modern cruise ship facilities and other infastructure to meet the demands of modern cruise industry
• Facilitate development of free trade zones within and around the port
• Enhance the role of private sector participation in the provision of port services and other institutional efficiency related programmes
• Facilitate implementation of the construction of a second commercial port in Lamu
• Develop small ports along the Kenya Coastline.
With these modernisation programmes, shippers now stand to benefit significantly by routing their cargo through the new-look port of Mombasa which clearly promises to be a World Class Seaport of Choice.

Ends…