Shipping & Logistics

Transporters diversify to survive SGR competition, Covid

SaeedAbdirahma

Mr Saeed Abdirahman working at his office. He is the founder and Chief Executive Officer (CEO) of a Mombasa-based logistics company, Sidoman Limited. PHOTO | POOL

Summary

  • When the outlook in the cargo business started looking bleak, Sidoman Investment Limited quickly cast its eyes elsewhere and started offering logistics solutions to all sizes of businesses.
  • Mr Abdirahman said his company has continually expanded its scope to offer a wider range of logistic choices.

When the government ordered all cargo destined for Nairobi and the hinterland from the Port of Mombasa be transported via the Standard Gauge Railway (SGR) trains, it plunged logistics companies into financial distress that saw a number of them shut down.

For the few that were still operational, the going got harder when Covid-19 struck early last year.

However, a few have managed to remain a float in the industry after diversifying their businesses.

When the outlook in the cargo business started looking bleak, Sidoman Investment Limited quickly cast its eyes elsewhere and started offering logistics solutions to all sizes of businesses, from small traders to large corporations in the evolving global marketplace.

“We offered different supports in logistics, from air, sea, to road. That is why we are surviving this economic hardship. We work closely with established carriers to ensure that we deliver consignments via air in different global routes,” said Sidoman CEO Saeed Sheikh Abdirahman.

Mr Abdirahman said his company has continually expanded its scope to offer a wider range of logistic choices.

“We are driving towards membership with World Cargo Alliance (WCA) to enhance our service delivery through partnering with major ports across the seas,” said Mr Abdirahman.

Others, decided to specialise when the competition became stiff and Covid-19 health regulations became stifling to their business.

Mr Julius Karanja, one of the truck owners in Mombasa said SGR and Covid-19 had affected business forcing most of those who did not diversify to close their shop.

“I could not venture into air transport which remains lucrative after introduction of SGR freight train due to lack of funds. But I converted my eight trucks to low cargo trucks to handled specialised cargo which cannot be handled by the train,” said Mr Karanja.

As this happens, Kenya Railways Corporation benefited from the government policy order to ferry Nairobi and other hinterland regions from Port of Mombasa via Standard Gauge Railway (SGR).

According to Economic Survey 2021 report by Kenya National Bureau of Statistics (KNBS) the volume of freight transported through the SGR increased by 4.8 percent from 4.2 million tonnes in 2019 to 4.4 million tonnes in 2020.