Official data shows that freight traffic by railway dropped by 9.3 per cent from 1,575 thousand tonnes in 2015 to 1,429 thousand tonnes in 2016.
CBK governor Patrick Njoroge on Tuesday said it will be cheaper to export products by sea.
The Central Bank of Kenya (CBK) #ticker:CBK says the standard gauge railway (SGR) has the potential to boost external competitiveness and cut inland transport costs by 49 per cent.
CBK governor Patrick Njoroge on Tuesday said it will be cheaper to export products by sea.
“It will be seven times cheaper to export fruits and nuts by sea compared to air because of SGR cost savings. The cost of shipping a container will be cheaper from Mombasa than Durban,” said Dr Njoroge.
According to CBK estimates, transporting a container from Durban to Holland costs $286 (Sh29,458 while from Mombasa to Holland will cost $251 (Sh25,853).
The CBK estimates that when air freight is used, transport cost is 42 per cent of total cost. Production takes up 25 per cent of cost, while packaging and labour consume nine per cent leaving the producer with less than 25 per cent.
Official data shows that freight traffic by railway dropped by 9.3 per cent from 1,575 thousand tonnes in 2015 to 1,429 thousand tonnes in 2016.
This led to a decrease in revenue earnings from freight by 10.6 per cent to Sh5.6 billion in 2016.
Passenger journeys fell by 7.3 per cent from 2,359 in 2015 to 2,186 in 2016. However, earnings from passenger traffic improved slightly by two per cent to Sh101.0 million in 2016.
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