Press Statement - NATIONAL GOVERNMENT DIRECTIVE ON FORCED USE OF SGR

On Tuesday 6th August, 2019, KPA together with KRA issued a government directive that all local cargo destined to Nairobi and the hinterland will from the 7th August 2019 be transported by SGR only. We the under listed organisations hereby jointly and singly wish to express our strong opposition to this directive as it is monopolistic. This directive violates the World Trade Organisation Rules on Trade Facilitation and United Nations convention of carriage of goods by Sea agreement where Kenya is a signatory. The convention establishes a uniform and modern legal regime governing the rights and obligations of shippers, carriers and consignees under a contract for door-to-door carriage that includes an international sea Leg. It also goes against the Competition Act No. 12 of 2010 on Restrictive Trade Practices and whose objective is to enhance the welfare of the people of Kenya by preventing misleading market conducts.

It is vital that the government be cognizant of the adverse effects of this directive both economically and socially. The business community in Mombasa and along the MombasaNairobi Highway (A109) have over the years invested heavily in fuelling stations, banking, Insurance, hotels and manufacturing industries which have contributed to the economic bolstering of counties, the common mwanainchi and the growth of the National GDP. This has improved efficiency of the port. The transport and logistics and its value chain touches on every sector of the economy namely manufacturing sector, the agricultural sector, the business sector, the tourism sector amongst others. Therefore, any policy affecting the 
sector requires extensive public participation and consultation before implementation.

While the operationalization of the SGR freight services is welcome and supported by all maritime stakeholders, our position is that the Government should let the free market forces dictate the cargo owners’ choice of mode of transport they pick to transport their cargo (See table).

Freedom of Choice is key. It is extremely unfortunate that the Cabinet Secretary for Transport is misleading the public by claiming that importers are free to choose Rail or Trucking to ferry their cargo to Nairobi and the hinterland. Importers are forced to use the SGR freight. Our Trucks delivers cargo picked from the port to the customers’ doors within a day and therefore a faster mode. It is also important to point out that using the SGR is more expensive than using Road Transport. 

Our statistics on the number of employees both direct and indirect, the level of investment made and the social Economic impact should guide the government to develop policies and directives that will work for the people as the government is for the people.

 

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TRANSIT GOODS LICENSE 2018 EXTENDED TO MARCH 4th 2019

In recent times, the KTA Secretariat has been pushing for the extension of the use of Transit Goods License 2018 as there was an unforeseen delay in the issuance of the 2019 License.

This led to communication by the Secretariat to Kenya Revenue Authority on the same in January which extended the use of the 2018 License up until 2nd February, and when it spilled over to February the same had to be made with KRA issuing a notice, of this being the last extension up until 4th March.

This allowed time for KTA Members to obtain Transit Good Licenses for 2019, the communication with Kenya Revenue Authority (KRA) has trickled to the other Authorities: Uganda Revenue Authority (URA), Rwanda Revenue Authority (RRA) and Tanzania Revenue Authority (TRA).

Quality and efficiency of road freight transport in Kenya to improve with Kshs 53m grant

 TMEA KTA Grant Signing 13092016

Mr. Ahmed FARAH, Trademark East Africa Kenya Country Director(left) exchanges agreements with Mr. Kiprop BUNDOTICH, Kenya Transporters Association Chairman (right) (Photo:Courtesy)

NAIROBI, Kenya, 13th September 2016 Kenya Transporters Association (KTA) and TradeMark East Africa (TMEA) have today signed a partnership agreement to enhance quality and efficiency of road freight transport in Kenya. 

According to an impact assessment study of the Northern Corridor, poor truck turn-around has been attributed to poor cargo off-take and delivery infrastructure, delays by transporters to pick cargo after Port release, delays within transporters facilities, and high frequency of stoppages along the Northern Corridor by drivers. On average, Kenyan trucks are presently doing 60,000 - 96,000 KMs/truck/year driving transport costs to an estimated 30% of the value of traded goods. In the most efficient trade corridors, the average KMs/truck/year is between 120,000 to 150,000 translating into significantly affordable transport and logistics costs of up to an average 4% of the value of traded goods. 

LOGISTICS: MOVING TO ENHANCE TRUCK TURN AROUND

In the most efficient trade corridors, the average KMs/truck/year is between 120,000 to 150,000

Accordingly to a baseline study recently conducted by KTA to analyse operational models and cost structures, transporters are covering an average distance of 96,240 kilometres in a year far below the Port Charter target of 120,000 kilometres per truck per annum. The average mileage per truck indicator, commonly known as Kms/truck/year, is a measure of efficiency of trade corridors, productivity of road freight transport and an important determinant of freight rates.

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