Transportation deal gives lift to Chinese firms in Kenya

Date: 20 Feb 2018

The Chinese business community in Kenya will be able to get their products shipped from China faster, more efficiently, and at a lower cost, following the signing of an agreement between Kenya Railways and Cargocare International Ltd, on behalf of Kenya Chinese Chamber of Commerce, also known as the KCCC.

According to Atanas Maina, the managing director of Kenya Railways, as known as KR, the agreement involves delivery of cargo from China through the port of Mombasa to the Inland Container Depot, known as the ICD, in the Embakasi district of the capital Nairobi, for clearance.

Cargo will be transported via the Chinese-built Standard Gauge Railway, known as the SGR, from Mombasa to Nairobi, which launched cargo services on Jan 1, 2018.

"Transporting cargo via railway is cheaper compared to road, and will therefore reduce the cost of production of goods and services," Maina said.

He added that Kenya Railways is committed to offering customers the best services ever, and assured Chinese traders of efficient, safe and reliable cargo transportation, and clearing and forwarding services.

Richard Makenga, managing director of Cargocare International Ltd, said the signing of the contract is a milestone for his company and its clients.

"We are looking forward to transporting our cargo through SGR which is safer and reliable compared to roads,” he said. “We are assured that the cargo will reach Nairobi within our timelines. All we have been looking for is efficient, reliable and safe transportation of our cargo, and we are happy that KR is committed to offering the same.”

Makenga added that clearing his cargo from Mombasa to Nairobi will greatly help his company, which has previously been doing clearance in Mombasa.

"When I started my business, I used to do 100 percent of clearing process at the ICD in Embakasi but when I moved to Mombasa I experienced a lot of inconveniences trying to position my office and staff,” he explained.

“However, if I can reverse and do all the clearing of my cargo at the Embakasi ICD, I will feel eased with a lot of issues. I'm looking forward to getting maximum cooperation from KCCC and KR.”

Makenga said there are still some challenges that need addressing in order to make their operations smooth. "The shipping line tends to put up very high mark-up on the cargo coming to ICD. If that can be done away with, then everybody will transport their cargo through railway," he said.

Kenya Chinese Chamber of Commerce chairman Zhuo Wu said most of his members are traders and owners of cargo, so the signing of the agreement will go a long way in easing their operations.

"The traders want efficient and fast service and SGR can give us that opportunity,” he said. “We are therefore grateful to Kenya Railways for accepting to sign the agreement. We now hope to get better services, noting that railway is cheaper and faster than road transportation.”

Huang Xionglin, Deputy General Manager of Transportation and Marketing of Railway Operation Company of Kenya, said that as the operators of the SGR, his company could guarantee KR and Cargocare a stable, safe, efficient and good service for cargo transportation.

“If any party has issues regarding our operations, let us know and our team which on is stand-by will try to resolve it as soon as possible," he said.

The Embakasi ICD offers a one-stop-center, where all government agencies involved in the cargo clearing process - Kenya Railways, Kenya Ports Authority, and Kenya Revenue Authority - are housed in one place, thus enabling an efficient system for the clearance and forwarding of cargo.

"The efficacy provided at ICD will enable cargo owners to access their goods faster than they are currently doing via road," said Maina.

Kenya's President Uhuru Kenyatta launched the Ksh22 billion ($212.3 million) upgraded inland container depot in December 2017, paving the way for the launch of standard gauge railway SGR cargo services in January 1 2018.

The container depot, which was upgraded by the China Road and Bridge Corp (CRBC), is part of phase 2A of the SGR project. The expansion of the depot was launched in May 2016 and completed in June 2017, 12 months ahead of schedule.

The minimum cost of transporting a fully loaded 20-foot container via SGR is Ksh19,800 ($191), at a minimum distance of 200 kilometers.

The maximum cost of transporting a fully loaded 20-foot container has been set at Ksh49,500 ($478) for the full distance from the port of Mombasa to the Nairobi depot.

Source: China Daily

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