PUBLISHED ON August 25th, 2014

EAC rail freight charges higher than global average

Rail freight tariffs in the East African Community are higher than in any other region of the world, a new survey shows.

The 2014 East Africa Logistics Performance Survey notes that this is due to the lack of effective concession agreements as well as the inability by operators to invest in improving efficiency.

“A well developed railway system would be the best solution to reducing transport costs,” said Gilbert Langat, the chief executive of the Shippers Council of East Africa.

“The region must, therefore, establish clear guidelines to support logistics management for operators and intermediaries.”

He said that governments need to invest in transport infrastructure, which will in turn boost international trade. He urged EAC member states to eliminate delays while goods are in transit in order to boost the bloc’s ability to compete effectively in the global economy.

Humphrey Kisembe, an economist who was part of the study, said that one of the biggest challenges affecting the freight industry is the lack of transparent charges.

“The imposition of surcharges has affected the competitiveness of the sector,” said Mr Kisembe said, adding that the lack of access to credit had contributed to the underdevelopment of small and medium size enterprises as providers of logistics services.

Mr Kisembe said the average truck in the EAC covers 5,000-7,500km per month compared with the international average of 12,000 km.

“This shows that transport corridors have inefficiencies such as delays at Customs and weighbridges,” he said.

Kenya’s Transport Principal Secretary Nduva Muli said laws governing the railway sector are being reviewed with the aim of spurring new investments.

Source URL: The East African

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.