Importers Are Paying 3 Times More To Use SGR To Transport Their Cargo

By Juma / Published August 30, 2019 | 6:31 am

Importers who are being forced to use the Standard Gauge Railway (SGR) to transport their cargo from Mombasa to Nairobi are paying 3 times more than they would have paid if they used trucks.

An average transport for a 20ft container from Mombasa to Nairobi by road is at 66,950 shillings. The same container is transported at 146,260 shillings via SGR.

An average transport for a 40ft container from Mombasa to Nairobi by road is at 87,550 shillings. The same container is transported at the cost of 218,360 shillings via SGR.

Early last month, the Kenya Ports Authority (KPA) and the Kenya Revenue Authority (KRA) had issued a directive that required all importers to use SGR to transport their imported goods via SGR from Mombasa to Nairobi.

The directive from the two agencies, KPA and KRA were reversed following an outcry from the public as well as stakeholders in the logistics sector.

The coming of the SGR, cargo line, was meant to give importers an easy time to transport their cargo as soon as it lands at the Port of Mombasa. It was also meant to be cheaper than the existing logistics to attract more investors towards its use.

According to the Phyllis Wakiaga, CEO at the Kenya Association of Manufacturers (KAM), most members are concerned about the high prices and the effect they have on the final product that is later pushed to the consumer to shelve the costs.

According to Wakiaga, inefficiencies in the logistics in Kenya has been leading to manufacturers to incur huge losses while transporting their goods or renting warehouses to store them.

The SGR cargo section has not been as profitable as the government had hoped hence them running around like a headless chicken with unrealistic policies to monetize the SGR. Importers have warned the dwindling in imports if the government will not back down completely from forcing them to use the SGR or reduce the transport cost.

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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