project brief

Rail Freight Logistics Solution (RFLS)

Implementor

Kenya Revenue Authority, Kenya Railways, Kenya Ports Authority, Uganda Revenue Authority

Target Group

Importers and Exporters of Cargo into EAC region

Project Value

US$ 5.5 Million

Implementation Period

2018-2023

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Why this project?

Transportation of cargo by road is affected by several factors including traffic jams, accidents, high theft cases, longer transport time, and limited axle load (56 tons in the East Africa Community Partner States). In April 2018, cargo transport via Kenya’s Standard Gauge Railway (SGR) was introduced to address some of these challenges. However, its commencement was marred by many challenges including delays in loading containers, lack of coordination among the key government agencies of Kenya Revenue Authority (KRA), Kenya Ports Authority (KPA), and Kenya Railways Corporation (KRC), congestion, and disorganised system of stacking containers at the Nairobi Inland Container Depot (ICD), lack of information and system to track containers and lack of communication between the different parties involved. These challenges led to increased cargo dwell time, increased costs of transporting cargo, demurrage, and fines due to delayed clearance compared to other means of transport. The private sector was frustrated as cargo took an average of 12 days to clear from the Nairobi ICD in December 2018 as reported by The East African newspaper.

What:

The Cargo Tracking for Rail is a single, seamless, integrated, and digital end-to-end cargo process flow from the Port of Mombasa-to-SGR-to-ICD and vice versa. The system addresses the bottlenecks and other challenges affecting the operations of cargo handling, movement, and clearance of rail cargo at the port of Mombasa and Inland Container Depot (ICD). The system would improve the effectiveness and efficiency as well as the governance of handling, clearance, and movement of goods along the Mombasa – Nairobi rail freight logistics corridor.

How:

With funding from United States Agency for International Development (USAID), TMA partnered with Kenya Revenue Authority (KRA), Kenya Ports Authority (KPA), and Kenya Railways Corporation (KRC) to devise and deploy, Cargo Tracking for Rail, a solution that included (1) Joint cargo tracking and training solutions (purposes of locating cargo), (2) joint command monitoring centres, (3) Customer notification solution (provide information to cargo owners on the status of their cargo), (4) Joint resource planning and execution solution (resource allocation and planning for cargo handling, moving and clearing), (5) Central information sharing (exchange of information between all port actors), (6) Traffic queue management (to facilitate coordinated movement of trucks to and from the port and ICD facilities), and (7) last mile delivery solutions. TMA provided financial and technical assistance.

Contact:

Erick Sirali, Email: erick.sirali@trademarkafrica.com

Desired result

The intervention is mapped to TMA’s high impact result of reduced barriers to trade which is measured by reduced cost and time to trade indicators. Some emerging results include:

  • Reduced clearance time at Nairobi Inland Container Depot (ICD) for tagged containers from 12 days in 2018 to 4 days in 2021. This has led to a reduction in the cost cargo owners pay for extra days that cargo is at the ICDN from USD 52M in 2018 to an average of USD 3M in 2021 which is equal to a 94% reduction in costs cargo owners used to incur.
  • Reduced truck turnaround time at the ICD by 1 hour from 5.5 to 4.5 hours
  • Enhanced yard capacity utilisation at the ICD
  • Increase in the number of tagged containers from 6% in 2018 to 22% in 2021 enhancing traceability of containers.
  • Strengthened coordination and collaboration between KPA, KRA and Kenya Railways and the private sector. Key Performance Indicators of the SGR were included in the Mombasa Port and Northern Corridor Community Charter
  • A 2022 independent evaluation of the project established that the Cargo Tracking Rail Project had a High Net Present Value (NPV) of about US$132 million (after deducting costs); a net Return on Investment (ROI) per US$ invested of US$21.1; and Internal Rate of Return (IRR) 1177%. The project was economically viable and profitable.
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