SGR train may not reduce freight costs, agents say

Transporting goods through the standard gauge railway (SGR) may not be a cheaper alternative after all, clearing and forwarding agents say.

The agents said on Thursday that cargo owners will spend between Sh15,000 and Sh20,000 on the last mile transport to industries within Nairobi, depending on depending on the distance from the landing depot.

Thus, the cumulative cost through the SGR cargo train could hit the Sh70,000 charged by transporters, they said.

On May 31, President Uhuru Kenyatta flagged off an SGR cargo train at the Mombasa port, ahead of launch of the freight services in December this year.

It will cost Sh50,000 to ferry a 20-foot container from the port to the Nairobi Inland Container Depot (ICD), according to Kenya Railways.
Truckers charge between Sh60,000 and Sh80,000 to ferry the same container from the port to Nairobi, depending on the weight and type of cargo.

“We have been paying the same rate to transport a container via Rift Valley Railways and really, if you look at other costs before goods are delivered at your door step, it might necessarily not be cheaper,” said William Ojonyo, the Kenya International Freight and Warehousing Association (Kifwa) chairman elect.

He spoke at Royal Court hotel in Mombasa during a forum bringing together about 100 directors and managers of clearing and forwarding agents to sensitize them on the impact of SGR on their businesses.

“We are not opposed to the SGR but what Kenya Railways should be telling us is how efficient it will be for the cargo to be transported by SGR trains because the main problem we experienced with RVR is not only the speed of delivery but how cargo was being loaded onto the wagons,” he added.

Unaddressed issues

Mr Ojonyo also said once cargo is offloaded at the port, the liability shifts to a transporter by way of nomination to the next carrier, an issue that has not been addressed.

“If the importer does not nominate his container to a Container Freight Station then Kenya Ports Authority does it. But as stakeholders we would like to be told clearly how the process will work so that we advise our clients.

"This has so far not happened. We had invited KR to this meeting but no one showed up,” he added.

Kenya Railways will run freight trains with 54 double-stack flat wagons, carrying 216 twenty-foot equivalent units (Teus) per trip with a load of 4,000 tonnes on each train.

The 25-tonne axle flat wagons have a capacity to carry a payload of 70 tonnes and are designed to run at 80 km/hr.

Three types of wagons have been ordered for operations on the SGR line – the open-top wagons, covered wagons and flat wagons.

Freight operations on the SGR are expected to shift a significant load (over 40 per cent) road to rail, hauling 4,000 tonnes per trip and 22 million tonnes per annum.

The agents who spoke during the forum said there were also concerns of how the containers would be returned to the ICD and eventually to the port, which they said should be addressed before launching of cargo services in December.