Sleeping giant wakened as State revives shipper

What you need to know:

  • In reviving KNSL, the shipping line is expected to once again become an active participant in international seaborne trade.
  • Started in 1987, KNSL was a joint venture between the government, through the Kenya Ports Authority and Unimar, a German company. 
  • State House had in March last year estimated that, if successful, the revival efforts will create an average of 3,000 jobs in the first year.

A mismanaged agency reeling with debt, an untapped Sh300 billion business potential, and a booming shipping business waiting to happen.

This is the story of the Kenya National Shipping Line (KNSL) formed in 1987 as the national carrier for seaborne trade before years of mismanagement and mounting debts led to its near collapse.

Even with the potential to have a huge part of a Sh300 billion market — the amount Kenyan importers pay as freight charges to foreign firms — the company has sunk into further debt in an industry that has been growing steadily especially with the entry of the Standard Gauge Railway.

3,000 JOBS

On Thursday, President Uhuru Kenyatta said the revival of the struggling firm was an important step in the country’s efforts to tap into the blue economy.

State House had in March last year estimated that, if successful, the revival efforts will create an average of 3,000 jobs in the first year, a figure that will increase to 6,000 by its fifth year of re-opening.

“We are very keen to revive the shipping line. And we are confident that we can run it again. This is a priority for Kenyans as it will create thousands of jobs,” President Kenyatta said yesterday. He was speaking after he witnessed the signing of a Memorandum of Understanding between the Ministry of Transport and Infrastructure and the Mediterranean Shipping Company (MSC), one of the leading global container shipping companies in the world, for the revival of the shipping line.

INSOLVENCY

The MoU was signed by Transport and Infrastructure Cabinet Secretary James Macharia and MSC First Vice President, Captain Giovanni Cuomo. The signing of the MoU came just two days after the Cabinet approved a revival plan for the debt-ridden company.

The recovery strategy proposed, among other things, giving the company the sole mandate to handle government cargo in what is expected to revive the shipping line that was facing insolvency due to lack of business.

SEABORNE

In reviving KNSL through the partnership with MSC, the shipping line is expected to once again become an active participant in international seaborne trade which accounts for a significant percentage of Kenya’s total trade.

Started in 1987, the Kenya National Shipping Line was a joint venture between the government, through the Kenya Ports Authority, owning 70 per cent of the company, and Unimar, a German company, owning 30 per cent.