Kenyan investment in logistics cuts costs

Logistics costs in Kenya which has “been plagued with high transport costs for a number of years due to insufficient, over-used and run-down infrastructure” are now dropping thanks to “significant improvements,” according to the Frost and Sullivan Africa Infrastructure Tracker report on Kenya. Senior economic consultant Craig Parker says the route between Mombasa and Nairobi received particular attention in upgrades. He found that the average cost to transport a 40 foot container from Mombasa to Nairobi decreased from $1 200 in 2012 to $1 050 in 2014. The turnaround time for a truck travelling from Mombasa to Nairobi and returning to Mombasa decreased from 1.2 days in 2012 to 0.9days in 2014. Neighbouring countries are also benefiting. “Substantial improvements in turnaround time from Mombasa to Kampala have also been made with the average turnaround time decreasing from 10 to 6 days between 2012 and 2014. Despite efforts to improve infrastructure, however, there are major impediments that still exist in terms of administrative delays and instances of corruption along these routes. Efforts by customs officials to clamp down on the smuggling are adding to delays. All exports are required to be scanned before being loaded, even after the containers have been inspected and sealed by a customs official. This duplication and frequent breakdowns of port equipment used to handle the cargo or the scanners leads to further delays and costs, according to Parker. Further investment, which includes the building of a new port at Lamu, is required for Kenya to become the leading trade hub for East Africa, he says.