Kenya Railways, truckers argue over cargo transport costs

Anxiety has gripped transporters after Kenya Railways (KR) began hauling cargo from Mombasa to Malaba via the standard gauge and metre gauge lines.

On January 10, KR achieved a major milestone when it began transshipping cargo at the Naivasha Inland Container Depot (NICD) after the successful completion of the SGR-MGR link.

It will take about 36 hours to haul cargo from Mombasa to the Malaba railway yard via the NICD, and customers will pay only $860 per twenty-foot equivalent unit or TEU.
The cargo will be transported to the Malaba freight yard for onward transportation to Kampala.

“From Mombasa to the Malaba railway yard, via Naivasha ICD, cargo will take 36 hours compared to road transport which takes 96 hours. Similarly, it will cost $860 per TEU compared to the road which costs $2,032 per TEU,” KR said in a statement.

The trial run, the company said, proved that cargo from Mombasa could be transported seamlessly to Kenya’s hinterland and to the neighbouring countries of Uganda, Rwanda, Congo and others.

But Kenya Transport Association (KTA) chairman Newton Wang’oo rejected efforts to force importers to use the railway, saying they should have the freedom to choose the mode of transport.

"Giving the public data that surpasses the actual total cost of using SGR/MGR and exaggerating actual road transport costs to support a narrative that rail transport is cheaper than road transport is not being fair to importers,” Mr Wang'oo said in a statement.

He also claimed KR misled the public about the time it took to ferry cargo from Mombasa to Malaba and the rail rate.

“It does not take a truck 96 hours to travel from Mombasa to Malaba, a distance of 950km. At most, it can take 36 hours inclusive of the driver sleeping 12 hours in Nairobi,” he said.

“The road rate of $2,032 per TEU mentioned by KR is for Mombasa to Kampala and includes the return of empty containers to the Mombasa depot.”

He claimed the rail rate of $860 per TEU cited by KR is an introductory rate and covers Mombasa to Malaba only.

Complement each other

“The rail rate is an offer rate to initially attract customers but it is not sustainable indefinitely. Otherwise, KR will be operating on huge losses as it is demonstrating currently,” he said.

But Mr Wang'oo reiterated that road transporters are not opposed to SGR, adding that the railway needs trucks to deliver goods to their final destinations.

Rail and trucks complement each other, he said.

He said SGR and MGR should work on becoming a better option through operational and cost efficiency.

“KTA will not have any issues if importers opt to use SGR/MGR. This is the essence and foundation of a market-driven economy in which the consumer is the winner. Let’s engage each other honestly and in good faith, as this rail infrastructure belongs to all of us,” he insisted.

The controversy comes after the Kenya Tea Development Agency began ferrying its export tea via the Sh327 billion SGR under a partnership with KR.

KR Managing Director Philip Mainga said SGR is cheaper than other modes of transport.
Mr Mainga said KR is safe and convenient and its tariffs are competitive.

“We took only eight hours to bring this tea to Mombasa. You can imagine how long it takes for this tea to come from the farms to Nairobi and finally Mombasa via trucks,” he said.

“That chain of movement has been too long for our farmers. We want to cut it and reduce it.”

Under the partnership, Mr Mainga said, tea from KTDA-managed factories will be transported from tea-growing counties to the Nairobi freight terminal and loaded onto KR wagons and subsequently transported to the port of Mombasa.

KR is running nine to 11 freight trains every day between Mombasa and Nairobi.

Mr Mainga said transshipment of cargo from the SGR onto the MGR line at the Longonot station will ensure that cargo is transported seamlessly via rail from the Mombasa to Kisumu and Malaba.

Large volumes of cargo

“As a result, the firm will attract more customers, especially cargo destined for Uganda, Rwanda and the Democratic Republic of Congo,” he said.

Rail transport, he said, guarantees that large volumes of cargo are ferried in shorter transit times due to high haulage capacity and the high speeds of the trains.

He said KR has enough capacity to handle all the cargo.

On January 6, President Uhuru Kenyatta urged the Chinese government to help complete the SGR beyond Kenyan borders to boost the transport network on the continent.

Speaking after inspecting the new Kipevu oil terminus, a Sh40 billion facility built by the Chinese to aid the docking of larger oil vessels into the Mombasa port, he said SGR has revolutionised the transport sector.

“Linking Mombasa to Nairobi and ultimately Kisumu, Malaba and neighbouring countries is crucial for growth. The cost of travel between Nairobi and Mombasa has been reduced due to SGR,” he said.

“During the pandemic, thousands of Kenyans were able to take advantage of the SGR to travel to Mombasa and to ensure that at least our hotels down here were not closed and our people were kept in employment. Our tourism did not sink completely, which would have been (the case if) not for the railway.”

He also said that SGR is helping ferry tea to Mombasa. Previously, he said, it would have cost Sh60,000 to deliver a container of tea from Nairobi to Mombasa but it now costs Sh17,000.

“That is a direct saving that goes to the pocket of our farmers. That is what development is all about,” he added.

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