The government’s decision to transport all imports through Mombasa port on the standard gauge railway (SGR) to Nairobi’s inland container depot (ICD) is a mockery of Kenya’s liberal economic policy.
Our economy is premised on the philosophy of ‘willing-buyer-willing-seller’ thereby negating any possibility that anyone could be forced to consume a good or service they do not want.
Like in any business, efficiency and cost are king for players in the transport and logistics sector. They will always strive to find the best deal that suits their needs in the supply chain.
Any disruptions of shipment schedules or cost variations directly impacts business and ultimately the pace of economic activity countrywide.
There are genuine concerns over the pricing of services on the SGR, which the government needs to address in order to win the support of the business community. It doesn’t make sense for businesses to take up costly services that only erode the competitiveness of users.
Pricey logistics services hurt business by driving up operational costs and making goods unaffordable for buyers who ultimately absorb the extra costs.
It would therefore be wise for the Kenya Railways Corporation (KRC) to get its charges and business models right if the mega investment in the SGR is to realise returns.
For instance, the corporation needs to review its rail freight charges and efficiency to ensure it offers packages that outsmart rival logistics service providers such as truckers.
We also hope that the KRC did its homework well to factor in the strength of add-on services such as door-to-door delivery because they are a game changer in integrated supply chain.
A rigid transport system with limited cargo drop-off and pick-up points is a put-off for many because of the inconvenience of having to strain for logistics services.
We believe the SGR services should be handled as a professional business if the project is to succeed and recoup the investment sunk into it.