Why export cargo through Kenya SGR remains low, 2 years later
Posted: 18 Mar 2020, 13:16
Why exports cargo through SGR remain low, two years later
Two years after the launch of the Standard Gauge Railway (SGR) freight services, securing of return export cargo has been an uphill task, with stakeholders in the logistics sector calling for modalities aimed at attracting traders to use the facility...
players in the logistics sector say Kenya Railways was “resistant†to changes they had proposed, which had seen exporters give up on the mode of transport, leaving KR’s plans merely on paper.
According to the Shippers Council of Eastern Africa (SCEA) executive officer Gilbert Langat, there is “reluctance and lack of interest†in transporting exports via SGR, adding that last year they held several meetings with the Kenya Railways with a view to striking a deal, but talks were not concluded.
“There was little progress and stakeholders did not see commitment in the engagement so we gave upâ€...
there have not been “serious commitment†on the part of the corporation to strike a deal especially in regard to freight rates... of critical concern to tea exporters is the current freight rates that they say are uncompetitive with KRC maintaining the rates will not be adjusted downwards...
Ideally, transporting goods by rail is cheaper than any other mode of transport in other parts of the world but the Kenyan case is different where transporting cargo by SGR from Mombasa to Nairobi is more expensive than moving it by road... The SGR cost is Sh80,000, the same cost as transporting by truck, which does not put into consideration the last mile transport cost that Mr Karanja said ranges between Sh15,000 and Sh20,000 depending on the destination...