Kenya Railways might be forced to further reduce rates on the standard gauge railway freight trains for the service to be competitive, stakeholders in the logistics sector said on Saturday. Express Shipping and Logistics Limited CEO Silvester Kututa said for the freight trains to attract importers who already have existing contracts with transporters, the rates must be lowered. “Importers are enjoying generous discounts from transporters and to lure them and attract high volumes to be designated to the Inland Container Depot (ICD), their rates will need to be irresistible. We are talking of an offer of up to Sh30,000 for the 20 foot container,” he said. KR started commercial operations of freight trains on the SGR track on January 1 and is charging Sh50,000 and Sh70,000 for the 20 and 40 foot container respectively from Mombasa Port to the Nairobi ICD. But importers have to spend between Sh15,000 and Sh20,000 on the last mile transport to industries within Nairobi depending on the distance from ICD. With transporters charging between Sh60,000 and Sh80,000 to ferry the 20 foot container from the port to the door step of the importer in Nairobi, KR has faced challenges getting enough cargo. After the first train ferried 216 containers, the second one was delayed and left after two days. “I believe that even with a rate of Sh30,000 the corporation would still make money,” Mr Kututa added. KR is operating freight trains with 54 double-stack flat wagons, carrying 216 twenty foot containers each with a...

NAIROBI, Jan. 10 (Xinhua) -- The apex body of business associations in the East African Community (EAC) on Wednesday said food, drugs and cosmetics are the most affected by non-tariff barriers in intra-EAC trade. East African Business Council (EABC) Executive Director Lilian Awinja told Xinhua in Nairobi that trade barriers of most other products have been resolved and these goods are freely flowing across the EAC member states. "The main reason why food, drugs and cosmetics face trade barriers at the EAC border points is due to lack of harmonized standards across the three sectors," Awinja said during a media briefing. EABC draws membership from private sector organizations in Kenya, Uganda, Tanzania, Rwanda and Burundi. The regional body has already established an East African Private Sector Standards Platform that addresses trade barriers faced by suppliers in intra-regional trade that are caused by differences in technical regulations among EAC member states. Awinja noted that while Kenya and Tanzania have foods standards bodies, Uganda is yet to fully operationalize its organization. "This has resulted in different laws on food safety that have hampered intra-EAC trade," she said. The East African Legislative Assembly has already endorsed the EAC Standardization, Accreditation and Conformity Assessment (SACA) Bill that seeks to harmonize foods, drugs and cosmetics standards across the region. The heads of states of the EAC partner countries are set to sign the bill so that it becomes law later this year. Source: Xinhua

Dar es Salaam. Economic growth in the Africa region is projected to continue to rise to 3.2 per cent in 2018 and to 3.5 in 2019, on the back of firming commodity prices and gradually strengthening domestic demand. However, this growth will remain below pre-crisis averages, partly reflecting a struggle in larger economies to boost private investment. According to the World Bank latest analysis of Global Economic Prospects (GEP), South Africa is forecast to tick up to 1.1 per cent growth in 2018 from 0.8 per cent in 2017. “The recovery is expected to solidify, as improving business sentiment supports a modest rise in investment,” reads the report. However, policy uncertainty is likely to remain and could slow needed structural reforms. Nigeria is anticipated to accelerate to a 2.5 per cent rate this year from 1 per cent growth in the year just ended. An upward revision to Nigeria’s forecast is based on expectation that oil production will continue to recover and that reforms will lift non-oil sector growth. Growth in Angola is expected to increase to 1.6 per cent in 2018, as a successful political transition improves the possibility of reforms that perfect the business environment. The regional outlook is subject to external and domestic risks, and is tilted to the downside. “Although stronger-than-expected activity in the United States and Euro Area could push regional growth up due to greater exports and increased mining and infrastructure investment, an abrupt slowdown in China could generate adverse spillovers to the region...

Kenya has initiated informal bilateral talks with Britain as it seeks to establish a new trade deal to protect its exports to the European market now that Brexit will likely affect duty free access of Kenyan goods to the country. Trade Principal Secretary, Chris Kiptoo, says though the UK will be officially pulling out of the European Union next year, there is a likelihood of Brexit negotiations affecting the movement of Kenyan goods to the country. “We are currently holding some informal talks with the UK to ensure our exports to Britain is not impacted when the country eventually pulls out of EU in 2019,” said Dr Kiptoo Thursday. The PS said the discussion revolves around having Kenyan goods access the British market under the duty free tariff as is currently the case with horticultural produce destined to the EU market under the Economic Partnership Agreement (EPA). Source: Business Daily

Players in the shipping and logistics business have spoken on the rocky start of the cargo train on the standard gauge railway, including delays tied to limited cargo. They have blamed efficiency hiccups and lack of a clear agreement between the SGR operator and cargo owners for the cargo shortage that has hit the SGR goods haulage launched on Monday, forcing Kenya Railways to delay the daily service. Performance of the rail freight sector needs to be stimulated by improving customer service to boost uptake of the service. Shippers reckon the cargo shortage is an artificial one caused by unclear operational steps. For example, they say, it is not clear who between the Kenya Ports Authority (KPA) and the railway firm will handle the cargo invoices. After the expansion of the Mombasa port, it was anticipated that growth in volume of cargo would automatically boost hauling. “But this is not the case because of technical hitches in sections of the value chain despite the SGR launching its goods haulage business just the other day,” said a maritime operator. These reservations have been registered despite assurances by Kenya Railways Corporation that the offloading of cargo at the Mombasa Port, transport and delivery is “now very efficient.” Delays were reported to have hit the second cargo train that finally arrived at the newly expanded Embakasi Inland Container Depot (ICD) in Nairobi on Saturday. KR said the train was stuck at Mombasa port awaiting containers, raising fears that investors were still opting for...

Now that the laws allowing for the use of drones for commercial purposes, it is only a matter of time before we see the unmanned aerial vehicles dotting skylines as they deliver goods, unshackled from our snaking traffic. This is the future of logistics, transportation that is driven by technology and with minimal human assistance. What will this will mean for Kenya’s logistics industry? First, it is worthy to note that Kenya is not the pioneer on the use of drones in the region. The crown goes to Rwanda which is already using the aerial vehicles to deliver blood, medical supplies and other life critical inputs. In Kenya, a good example is in the delivery of national examination papers. The Kenya Certificate of Primary Education (KCPE) failed to take off on time in parts of Narok County as rains made road transportation unusable. Expanding our imagination even further, would drones have been used to deliver election materials for the General Elections? Going back to costs, would drones deliver these goods in a timely and more cost effective manner? These are some situations where the government ought to seek the services of technology-driven logistic companies. The private sector can also use this technology for parcel delivery, especially at a time when more Kenyans are embracing online shopping. Again, one area that needs to rapidly adopt technologically-driven logistics is the booming retail sector. Retailers often cite that one of the biggest costs they incur is shrinkage or losses that are the result...

The dream of achieving low airfare in Africa may soon be realised should the African Union’s plans run full course. The bloc expects to launch its Single African Air Transport Market at the end of this month in Ethiopia. According to the AU, 23 regional countries have committed to the cause that whose full implementation will see, among other benefits, the cost of air travel drop by more than 25 per cent. AU chairperson Moussa Faki Mahamat in his New Year message said SAATM will be launched on the margins of the African Union Summit to be held between January 22-29 this year. “Twenty-three member States have pledged their solemn commitment to the Single Air Market, the implementation of which will increase the number of routes, reduce the cost of air travel and contribute to the expansion of intra-African trade and tourism,” said Mr Mahamat in the statement. Efforts to have African countries open up a common airspace has been frustrated by States that want to protect their weak airlines from competition, raising debate on whether this will be achieved. Ministers of Infrastructure from Common Market for Eastern and Southern Africa (Comesa) in a report last year October said some countries have been reluctant to embrace full implementation of a seamless airspace as it will expose their airlines to stiff competition. “Implementation has been hampered by reluctance by States that claim to have weak airlines to embrace full implementation as their airlines cannot compete,” said the report in part. The...

A year after it became compulsory for importers to have local marine cargo insurance (MCI), underwriters are worried that there is something wrong with the implementation of the directive. While they cannot put a finger on the possible rotten apple, the industry is suspecting porousness in three areas that they are now investigating to interpret the poor performance of 2017. It’s the abnormal low premium income that has thrown the industry into a spin with official data showing they may have only achieved 20 per cent of their 2017 annual premiums target. The three suspect leads are whether some importers are ignoring the directive on MCI. They are also investigating claims of price undercutting among service providers and the effect of electoral politics on import volumes. “We have to know what’s happening exactly. We want to ensure there is no cheating so that MCI directive can work for all stakeholders in 2018,” said Association of Kenya Insurers (AKI) chief executive Tom Gichuhi. “But generally, we are encouraged by month on month improvement which climaxed in October when official figures indicated the local industry had collected monthly premium of Sh1.8 billion, which is 70 per cent of the target,” he said. The insurers initially set an ambitious annual target of raising annual premiums of between Sh20 billion and Sh22 billion once the State locked out foreign underwriters. However, the regulator is assuring the insurers that nothing has been lost. The Insurance Regulatory Authority (IRA) says the MCI is one of the...

Sugar imports grew threefold in 11 months to November 2017 compared with the previous year following the scrapping of duty on the commodity to bridge the local deficit. A market report from the Sugar Directorate indicates the volumes shipped into the country tripled to 971,212 in the period under review from 290,256 in corresponding period the previous year. The bulk of the sugar imports was of brown/mill white type (table sugar 829,111 tonnes), representing 85 per cent of the total consignment, while the balance was industrial sugar, which is used for manufacturing. “The significant increase in table sugar imports is ascribed to huge importation of duty free sugar between May and August 2017 to mitigate shortage in the country,” says the report. Large imports were registered from non-Comesa countries during the period as more than three quarter of the consignment was brught in from Brazil. About 250,259 tonnes of the commodity were imported from Comesa Free Trade Area while 622,646 tonnes was shipped in from non-Comesa region. There were zero imports from East African countries as the region, just like Kenya, grappled with a shortage of the commodity and retained local production for their domestic use. Sugar production in the country dropped 45 per during the same period as factories grappled with the shortage of raw material to mill, affecting the sales, which also fall by almost similar margin. The quantities produced dropped to 327,886 in the first 11 months of 2017 from 593,666 tonnes in corresponding period in 2016....

Kenya Airways  is set to commence daily flights between Nairobi and New York in October, marking a milestone for the national carrier that will cut the flight time between the two cities by more than seven hours. Travellers will from tomorrow begin booking advance tickets for the airline’s maiden flight to the John F. Kennedy International Airport (JFK). Kenya Airways has already secured a landing slot at JFK. The trans-Atlantic flights, scheduled to depart Jomo Kenyatta International Airport (JKIA) at 10:30pm every day, will last 15 hours. This is a reduction from the current flight time of over 22 hours, including lengthy layovers. “We are currently loading the flights onto our system. We shall go live and ready for bookings on Thursday,” said Kenya Airways chairman Michael Joseph in a telephone interview. “The launch of direct flights between Kenya and the United States will mark a significant milestone for the business and for the country.” Passengers travelling to JFK will arrive at 6.30 a.m., in time for morning meetings, while the return flight from JKF will depart at 1.30 p.m. and arrive in Nairobi at 10.30 a.m. the next day. Each trip will have a maximum of 234 passengers — 204 in Economy and the rest in Business Class of the national carrier’s Dreamliner aircraft. Delta partnership Kenya Airways, known in short as KQ, had announced its preference to operate the flights through a code-share partnership with US carrier Delta Airlines, its SkyTeam partner. Delta, Virgin Atlantic and KLM Air France...