Freight Forwarding Agreement (Kenya)

A Freight Forwarding Agreement in Kenya records the obligations the parties accept and the terms governing their arrangement.

Freight forwarding in Kenya is a licensed activity regulated by the Kenya Revenue Authority (KRA) Customs and Border Control Department under the East African Community Customs Management Act 2004 — the EACCMA — which is the primary customs law applicable in Kenya as a Partner State of the East African Community (EAC). Section 3 of the EACCMA defines a 'customs agent' as a person licensed by the Commissioner of Customs to carry out customs transactions on behalf of importers and exporters. All customs clearance at the Port of Mombasa, Jomo Kenyatta International Airport (JKIA), and inland container depots (ICDs) — Nairobi ICD, Embakasi — must be handled by a licensed customs agent holding a valid Customs Agent Licence issued by the KRA.

The Kenya Ports Authority (KPA), established under the Kenya Ports Authority Act Cap. 391 and regulated by the Ministry of Transport and Infrastructure, manages the Port of Mombasa — East Africa's largest seaport — and the smaller port of Lamu under the Lamu Port–South Sudan–Ethiopia Transport (LAPSSET) Corridor project. The KPA's Port By-Laws and Container Terminal Operating Procedures impose specific obligations on freight forwarders regarding container pick-up, demurrage, and cargo handling at the Port of Mombasa.

The Kenya Civil Aviation Authority (KCAA), established under the Kenya Civil Aviation Authority Act No. 26 of 2013, regulates air cargo handling at Jomo Kenyatta International Airport (JKIA) and Wilson Airport. Air freight forwarders must hold an Air Cargo Agent Certificate issued by the KCAA. The International Air Transport Association (IATA) Cargo Agent accreditation is the industry standard for air freight forwarding globally, and Kenyan air freight forwarders typically hold both KCAA and IATA accreditation.

The EAC Common External Tariff (CET), published under the EACCMA, sets the import duty rates applicable to goods cleared at Kenyan customs points. The EAC Partner States — Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo — apply a common tariff structure with three bands: 0% for raw materials, 10% for intermediate goods, and 25% for finished goods. Goods traded between EAC Partner States under the EAC Customs Union Protocol attract zero internal tariffs where the goods meet the EAC Rules of Origin criteria.

The Kenya Revenue Authority administers the Kenya TradeNet System — a single electronic window for customs declarations — through which freight forwarders submit Import Declaration Forms (IDF), Export Declaration Forms (EDF), and Entry Summary Declarations. The National Treasury and Planning's Pre-Export Verification of Conformity (PVoC) programme, administered by the Kenya Bureau of Standards (KEBS), requires certain imported goods to be verified for conformity with Kenya Standards before shipment. Freight forwarders must coordinate the PVoC certificate with the principal as a condition of customs clearance under KEBS Legal Notice No. 201 of 2013.

The Kenya Freight Forwarders Association (KIFFA) represents freight forwarding companies in Kenya and has published standard trading conditions that members may incorporate into their Freight Forwarding Agreements. KIFFA standard conditions address the forwarder's liability limits, sub-contracting rights, and lien over cargo.

A Freight Forwarding Agreement in Kenya is required whenever a business or individual engages a licensed customs agent or logistics provider to handle the import, export, or transit of goods through Kenya's ports, airports, or land border crossings.

A Freight Forwarding Agreement is needed when a Kenyan importer sourcing goods from China, India, or the European Union contracts a licensed customs agent to clear those goods at the Port of Mombasa under the East African Community Customs Management Act 2004 and to arrange inland transport to Nairobi, Kisumu, or other upcountry destinations.

A Freight Forwarding Agreement is required when a Kenyan exporter of agricultural produce — tea, coffee, cut flowers, or fresh vegetables — contracts an air freight forwarder to handle the export clearance at Jomo Kenyatta International Airport (JKIA) and to book cargo capacity with airlines operating from JKIA.

A Freight Forwarding Agreement is needed when a multinational corporation operating in Kenya appoints a third-party logistics (3PL) provider to manage the end-to-end supply chain for spare parts or raw materials imported through the Port of Mombasa and distributed to factories in the Special Economic Zones established under the Special Economic Zones Act No. 16 of 2015.

A Freight Forwarding Agreement is required when a Kenyan trader importing goods under the EAC Common Market Protocols needs a freight forwarder to handle transit cargo through Tanzania or Uganda using the Northern Corridor transit route managed under the Northern Corridor Transit and Transport Agreement.

A Freight Forwarding Agreement is needed when a Non-Governmental Organisation (NGO) registered under the Non-Governmental Organisations Co-ordination Act Cap. 134 imports relief goods, medical equipment, or project materials under a duty exemption granted by the KRA, and requires a freight forwarder to handle the exemption application and customs clearance procedures.

A Freight Forwarding Agreement is required when a diplomatic mission or international organisation accredited under the Vienna Convention on Diplomatic Relations imports vehicles, household effects, or project materials under diplomatic exemption and needs a licensed forwarder to process the clearance. Under Kenya law, Section 3 of the Companies Act 2015 (No. 17 of 2015) and Section 2 of the Law of Contract Act (Cap 23) govern the core requirements for this type of document.

A Kenya Freight Forwarding Agreement under the East African Community Customs Management Act 2004 and the Law of Contract Act Cap. 23 must contain the following essential elements to be enforceable and operationally effective.

Parties and Licences: The full legal name and address of the principal (importer or exporter) and the freight forwarder, together with the forwarder's KRA Customs Agent Licence number and any relevant KCAA Air Cargo Agent Certificate number or KIFFA membership number. Including licence references confirms the principal has engaged a properly authorised agent.

Scope of Services: A clear description of the services the freight forwarder will provide — customs clearance, freight booking, warehousing, inland transport, insurance arrangement, documentation preparation (Import Declaration Form, Export Declaration Form, Bill of Lading, Certificate of Origin, PVoC certificate coordination). The agreement should distinguish between services included in the forwarder's fee and disbursements payable by the principal.

Authority and Power of Attorney: A limited power of attorney granted by the principal to the freight forwarder authorising the forwarder to sign customs declarations, submit entries to KRA, and act as the principal's authorised agent before the KRA Customs and Border Control Department, the Kenya Ports Authority, KEBS, and other relevant government bodies. Under the EACCMA, customs entries must be submitted by a licensed customs agent acting under the principal's authority.

Duties and Taxes: Confirmation that all customs duties payable under the EAC Common External Tariff, Value Added Tax under the Value Added Tax Act No. 35 of 2013, Import Declaration Fee, and Railway Development Levy are the principal's liability and must be reimbursed to the forwarder as disbursements. The agreement should specify the payment timeline for duty disbursements — typically within 24 hours of demand to avoid demurrage.

Freight Charges and Invoicing: The forwarder's professional fee, the basis of calculation (per consignment, per TEU, per kilogramme for air freight), the currency (Kenya Shillings or US Dollars), and the payment terms. Late payment charges at a stated rate should be included.

Liability Limitation: The maximum liability of the freight forwarder for loss, damage, delay, or misdelivery of cargo while in the forwarder's custody or care. Under Kenyan common law, freight forwarders acting as carriers are subject to the Carriage of Goods by Sea Act Cap. 392 (incorporating the Hague-Visby Rules) for sea cargo, and the Carriage by Air Act Cap. 394 (incorporating the Warsaw/Montreal Convention) for air cargo. KIFFA standard conditions typically limit the forwarder's liability to the lower of the actual loss or a specified monetary cap per kilogramme or per consignment.

Demurrage and Storage: Responsibility for port demurrage charges levied by the Kenya Ports Authority Container Terminal for containers not collected within the free days allowed; and responsibility for storage charges at inland container depots or KEBS inspection facilities. The agreement should clearly state that demurrage and storage charges incurred due to the principal's delay in providing documents or funds are the principal's liability.

Insurance: Whether the forwarder will arrange cargo insurance on behalf of the principal, the basis of coverage (Institute Cargo Clauses A, B, or C), the insured value, and the premium cost. If the principal arranges its own insurance, the agreement should confirm the carrier and the forwarder's obligation to cooperate in claims processing.

Governing Law and Dispute Resolution: The agreement is governed by the laws of Kenya. Disputes are typically referred to arbitration before the Nairobi Centre for International Arbitration (NCIA) under the Arbitration Act No. 4 of 1995. The forms-legal.com Kenya Freight Forwarding Agreement template covers all statutory requirements under the East African Community Customs Management Act 2004 and Kenyan logistics law. Under Kenya law, Section 135 of the Companies Act 2015 (No. 17 of 2015) and Section 15 of the Employment Act 2007 (No. 11 of 2007) govern the core requirements for this type of document.