Nairobi exporters will enjoy a 50 per cent cut on rail freight costs from January as the government moves to encourage local shippers to use Mombasa port.
The Kenya Railways has said shippers moving cargo from the Nairobi Inland Container Depot (ICD) to Mombasa terminal by the standard gauge railway (SGR) will pay half what importers pay to move items in the reverse direction.
The SGR is expected to launch its freight service early next year, supplementing the existing Madaraka express and inter-county train service.
“We are in the process of rolling out the freight service, which will lower the cost of transport by 50 per cent between the Port of Mombasa and the Nairobi ICD,” said KRC Managing Director Atanas Maina.
“It is expected that lower freight rates will be passed on to the consumer as the cost of transport and logistics accounts for up to 40 per cent of the cost of goods and services.”
The incentive is one of the measures being taken by the government to correct trade imbalance that last year saw Kenya exports hit a total of Sh583.4 billion against an import bill of Sh1.38 trillion.
At the Mombasa Port, attention has been drawn to the fact that most of the cargo containers used to ship goods into the country are normally transported back empty.
Once the SGR rolls out its freight service, Mr Maina noted, there will be a 50 per cent discount on the market charges for firms and Kenyans moving goods and personal effects to Mombasa.
For instance it will cost Sh275 per tonne of agricultural input, Sh330 per tonne of light bulky goods and Sh660 per tonne of a vehicle, from Nairobi to Mombasa within a distance of 200 kilometre, the revised rate card shows.
In the opposite direction (Mombasa-Nairobi), the SGR freight service will however charge Sh550 per tonne of agricultural inputs, Sh1,430 per tonne of light cargo and Sh1,320 per tonne of vehicles within the same distance.
Similarly, the cargo trains will charge Sh1, 100 per tonne of agricultural inputs, Sh2,860 per of light bulky goods and Sh2,640 per tonne of vehicles within a distance of between 350 and 400 kilometres from the Port of Mombasa to Nairobi.
The opposite direction will attract 50 per cent discount for each category.
The SGR trains have a capacity to ship cargo at the rate of 1,000 containers per day.