Kenyan truck companies are still in business after SGR entered

An SGR freight train arrives at Naivasha Inland Container Depot in Mai Mahiu, Nakuru county, on Jan. 10, 2022. [Kipsang Joseph, Standard]

The amount of freight carried by the Standard Gauge Railway (SGR) has increased since it began operations in January 2018.

The new railway now carries about a fifth of all cargo imported to Nairobi and Naivasha via the Port of Mombasa, according to the Kenya National Bureau of Statistics (KNBS). In some cases, such as container freight, SGR shifts up to 30 percent of the containers to the hinterland.

While the amount of cargo transported on SGR has been growing steadily since its first year of operation in 2018, it is unlikely that it will rid the Mombasa-Nairobi highway of trucks using the road to ship goods to the rest of the country as well to transport to the region.

This is because not only does about 20 percent of the cargo imported into Kenya go through the Port of Mombasa and about 80 percent is left to the truckers, but the volume of imports has also increased.

Imports through the port have increased from 25.5 million tons in 2018 to 27.8 million tons in 2020.

This has meant that the two modes of transport, road and rail, continue to co-exist despite previous expectations that the new railroad would displace large numbers of trucks on the motorway.

Before SGR was hired, the Ministry of Transport and Kenya Railways Corporation had expected to clear the Mombasa-Nairobi highway of about 600 trucks carrying freight.

The truckers and hauliers were advised to focus on SGR’s last mile, which would transport cargo from the Inland Container Depots to the owners’ premises.

Of course, the road sector may have lost out, as according to a 2020 study by the Competition Authority of Kenya, “before the start of the SGR, it (road sector) accounted for more than 96 percent of all traffic flow along the north aisle”.

The government has tried in the past to force cargo importers to use SGR, which has met with resistance.

The Department for Transport has presented to Parliament in the past that railways are essential for the transport of goods and play an important role in reducing road wear, congestion and therefore the number of accidents.

“Railways are the most efficient form of land transportation. A train can carry the equivalent of about 100 trucks, helping to alleviate congestion,” senior ministry officials said when they appeared before the National Assembly Transport Committee investigating whether importers will be forced to use SGR in 2020.

The ministry had argued at the time that the directive stemmed from the outbreak of Covid-19 and was issued after consultations between the heads of state of the East African Community.

“Rail offers fast and cheap long-distance deliveries…the integration of meter gauge and SGR can offer longer distances to make the service more attractive.”

The Shippers Council of East Africa found that SGR has yet to meet its target of moving 40 percent of all cargo imported through the Port of Mombasa.

“The SGR freight service was set up with the goal of moving at least 40 percent of the port’s throughput to Nairobi and beyond, thereby relieving the road network. This goal was not achieved,” said SCEA.

“Even with the implementation of SGR, sufficient cargo is available to maintain SGR and road transport.”

The Competition Authority of Kenya (CAK) found that the various cases in which the government has ordered importers to use SGR amounted to anti-competitive behavior.

“The government has taken regulatory action since January 2018 to ensure all cargo to Nairobi is transported by SGR. It is noted that the freight allocation is being made to help the government meet the SGR freight targets, particularly because of the loan repayments for this critical infrastructure,” CAK said.

“However, this distorts free trade and the choice of shippers as to what type of hinterland transport they choose for their import cargo.”


About Sonia Martinez

Check Also

I went to Zanzibar with my family to heal shock after poll result – Capital News

NAIROBI, Kenya (Reuters) – Former Prime Minister Raila Odinga is back in the country with …