Constraints at the Port of Mombasa and along the Northern Corridor transport route have driven transport costs to an estimated 30% of the value of traded goods. Furthermore, available data indicate that operational (both direct and indirect costs) and administrative costs for trucking companies constitute over 80% of the trucking charge.
NAIROBI, Kenya, 13th September 2016 – Kenya Transporters Association (KTA) and TradeMark Africa (TMA) 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.
Kenya Transporters Association (KTA), as a signatory to the Mombasa Port Community Charter, has committed to work towards attainment of an average of 120,000 KMs/truck/year. In order to meet this target, Kenya Transporters Association plans to enhance operational capacities of transport operators and offer policy and regulatory alternatives that support a conducive transport business environment in order to sustainably bring down the cost of transport.
In this partnership, TMA has committed USD 532,549.50 to support KTA interventions that will contribute to enhancement of safety and service delivery through improved compliance with transport laws/regulations and industry standards leading to reduction in related costs, enhancement of legal protection of transport business through enabling transport policies and structural improvements resulting into a reduction in associated costs and enhancement of KTA’s internal capacity to deliver services to its members.
The project, to be undertaken over the next three years, is ultimately expected to contribute to enhanced road freight transport productivity performance and competitiveness leading to a reduction in road transport operating costs and an eventual decrease in transport prices by an estimated 2-3%.
“Freight costs per kilometer are more than 50% higher than costs in the United States and Europe, and for the landlocked countries, transport costs can be as high as 45% of the value of exports. The mission of TradeMark Africa is to increase trade and prosperity in East Africa, primarily through investing in areas where there will be the biggest impact for East Africa’s people and private sector.” says the TMA CEO, Frank Matsaert.
“TMA has supported and continues to support a number of infrastructure enhancement projects across the region as well as structural and systemic reforms in government agencies and private sector organizations. These interventions will only achieve meaningful success if supported by reliable and efficient road freight transport services. Currently, road haulage accounts for over 94% in transport modal split making it an integral component of trade and trade facilitation. An efficient and reliable road freight transport is therefore imperative,” says the KTA CEO, Mr. Otuke.
Presently, over 95% of the KTA Members plying the Northern Corridor road network – which connects the Port of Mombasa and the hinterland – handle over 20 Million tonnes representing 94% of the total Port throughput. Over 6 Million Tonnes of this volume (representing over 30%) is transit cargo. An efficient, reliable, safe, environmentally friendly and cost effective transport system is, therefore, critical in ensuring the productivity, competitiveness and sustainability of the corridor.
TradeMark Africa (TMA) is an aid-for-trade organisation that was established with the aim of growing prosperity in East Africa through increased trade. TradeMark Africa (TMA) operates on a not-for-profit basis and is funded by the development agencies of the following countries: Belgium, Canada, Denmark, Finland, the Netherlands, UK, and USA. TradeMark Africa (TMA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.
