Container freighters’ plan to ride on SGR to remain in business

Standard gauge railway station in Miritini, Mombasa. PHOTO | JEFF ANGOTE | NMG 

By GITONGA MARETE

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Summary

• Container Freight Stations (CFSs) plan to clear cargo at their facilities and hand it over to the Kenya Railways for transportation to the Nairobi Inland Container Depot via the Standard Gauge Railway (SGR) freight trains.
• This will see CFSs clear goods in Mombasa and deliver containers to the SGR terminal at Port Reitz for onward transportation to Nairobi.
• The proposal comes in the wake of KPA and KR efforts to increase the number of containers loaded onto the trains.

Container Freight Stations (CFSs) in Mombasa have made a proposal that will see them clear cargo at their facilities and hand it over to the Kenya Railways for transportation to the Nairobi Inland Container Depot via the Standard Gauge Railway (SGR) freight trains.

If relevant government agencies approve it, the proposal by the CFS Association of Kenya will see CFSs clear goods in Mombasa and deliver containers to the SGR terminal at Port Reitz for onward transportation to Nairobi.

The Kenya Railways (KR), Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) are the key agencies involved in cargo handling and clearing procedures.

The agencies are understood to be studying the proposal with keen interest, following challenges faced in transferring cargo from the road to the trains.

The Nairobi ICD was upgraded from a capacity of 180,000 twenty foot equivalent units (Teus) to 450,000 at a cost of Sh23 billion and KR has to load 324 containers on three trains daily, a target which has proved difficult to meet. 

In the advent of the SGR freight trains, there have been fears that the CFSs might be edged out of business but this proposal could give them a lifeline with the CFS Association saying at least 250 people will be tasked with marketing the train service to importers across the country.

Reached for a comment, the Association executive officer Daniel Nzeki declined to give details, saying they had engagements on “several matters” with KR, KPA and KRA that had not been concluded.

READ: Kinyua now orders State contractors to use SGR

However, according to the brief seen by Shipping & Logistics, the CFSs hope to leverage on their established facilities and processes to deliver containers at the SGR terminal at the port.

“Through delivery of containers directly to SGR, the efficiency of loading operations for the freight service will be expected to improve significantly. This will ease pressure on KPA that is currently running multiple activities of normal port operations including tracing and transferring containers to the SGR designated loading areas,” the brief says.

The Association says CFS operators will undertake marketing of SGR freight service to their customers with each CFS given specific targets on the number of containers they will be expected to delivery daily, giving Kenya Railways assured source of cargo.

“Customs services and infrastructure already present in CFSs will carry on with the normal duties of verification and release of cargo. This will ease the pressure on customs clearance at ICD Embakasi. Cargo will be delivered to Nairobi for collection with no further processes needed with a reduced dwell time,” the Association says.

One of the most serious challenges KR has faced as it seeks to convince importers to use the trains is the last mile transport of goods to importers and return of empty containers to designated yards in Mombasa.

According to the proposal, the CFSs will offer a package to importers that will include last mile delivery and return of empty containers to shipping lines designated depots in Mombasa.

On Tuesday, KPA General Manager Operations and Habour Master Mr William Ruto said they had received the proposal and would soon give the way forward “after due process”.

“However, in my view, it will fasten movement of goods at the ICD because all the customs procedures will have been completed and containers will be ready for collection on arrival at the facility,” he said in a telephone interview.

The proposal comes in the wake of KPA and KR efforts to increase the number of containers loaded onto the trains. Both agencies have announced reduced rates in an attempt to encourage importers to use the Sh327 billion infrastructure project.

Last week, KPA said it had stepped up efforts to encourage shipping lines to use the through bill of lading (TBL) that involves goods being delivered directly to the ICD.

Mr Ruto said they were looking forward to a situation where with the use of the TBL, containers will land in Nairobi even before a ship completes offloading.