Last year, Kenya began localising a regional bill to codify regulations and standards for the freight forwarding industry. The East African Customs Agents and Freight Forwarders Management Model Bill 2017 is set to be adopted by all 6 East African Community states to enhance professionalism in the sector.
The Kenyan version, tabled last October is on course to take effect at the beginning of 2020. The bill will create a self-regulating board for clearing agents and will require all of them to get new practicing licenses. This licence will be renewable every year. Aside from requiring that freight forwarders have no complaints against them, the bill will also make clearing agents liable for lost cargo.
The bill is also expected to incorporate technical qualifications for freight forwarders and make continuous professional development a must. Exactly how this shapes out will be interesting to see. The law will also install a code of conduct, along with procedures and penalties to enforce it. The accountability and opportunity to self regulate have been welcomed by freight forwarders.
However, the increased accountability also demands tightening up of operations to reduce losses. Freight forwarders will need greater visibility of goods as they move. An online logistics service could help ensure this.
October also saw the launch of the Nairobi-Naivasha segment of the Standard Gauge Railway. According to news reports, the passenger service is already running with the cargo service set to start sometime in the coming year. At a cost of Sh150 billion, a lot has been said about the viability of the rail without cargo. One thing is certain, however, the SGR is here to stay. When it was conceived, a large chunk of its revenue was expected to come from transit cargo. The economic viability of it is under threat because understanding with neighbouring countries fell through.
The government’s efforts to remedy this can be seen clearly in its deals to give land to neighbouring countries to secure their use of the SGR for cargo. Earlier this year, the government announced plans to create a Special Economic Zone in Naivasha that would also include a new Internal Container Depot at Maai Mahiu. In a bid to drive more transit cargo through the SGR, the government has signed concessions with Uganda, South Sudan, Rwanda and the Democratic Republic of Congo.
These countries have been allocated land within the Special Economic Zone where they can process their own cargo for onward transmission to the respective destination countries.
Further to this, earlier in 2019, the Minister of Transport issued an order compelling importers to move all their cargo meant for Nairobi and other countries through the Standard Gauge Railway. Although this order was rescinded, it is unlikely that the push to put more cargo on the SGR will stop. At a total cost of Sh 1.5 trillion, the government will no doubt continue to push more cargo to the SGR to ensure the success of its flagship project.
Transporters have been making the shift to specialized cargo to survive to hive off their business.
The writer is country manager - freight, Sendy Limited.