Kenya Railways opts for conference to put cargo trains on track

Kenya Railways will next month hold a conference drawing together logistics experts and stakeholders in an attempt to address challenges facing the standard gauge railway freight train operations.

Managing director Atanas Maina said the conference will seek to get views from players on how to address the problems.

He said Kenya Railways (KR) is standardising operations with two key agencies involved in the clearance and handling of goods – the Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA).

“We want to agree on all the standards of service and our combined operation processes,” the MD said, adding that they are already getting feedback from all players on how they will improve their services.

The Kenya International Freight and Warehousing Association (Kifwa) Nairobi branch chairman William Ojonyo said they welcome the conference, noting that they have in the past called for dialogue over contentious issues related to the cargo trains.

“We have always maintained that we want the project to work but there are some issues that must be addressed,” he said.

The conference comes in the wake of teething problems in streamlining operations of the freight trains that started hauling goods from Mombasa port to the Nairobi Inland Container Depot (ICD) at Embakasi, Nairobi, in February.

There have however been challenges in how goods are loaded on trains, especially regarding those that had not been designated for offloading at the ICD.

The most serious challenge has emanated from returning empty containers to designated yards in the port city. Once importers receive their goods, they have an obligation to return the containers to the shipping lines yards.

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Since the SGR trains can only drop them at the port, importers are forced to spend more money transferring them to the yards, eating into the gains from the trains’ low rates.

Truckers have not been giving priority to returning of the containers, arguing that it is an inconvenience since they did not generate them. This has resulted to the current stalemate where the empty containers have remained at the ICD for days.

Some transporters have taken advantage of the situation and are charging up to Sh50,000, to return an empty container in Mombasa, according to a clearing agent based in Nairobi.

“I don’t see the reason the government is trying to force us to use the trains...although they have better rates, in the long run it is more expensive for us,” said an agent, adding that it is only Rongai Transport that is charging Sh25,000 to return the containers to Mombasa.

It is in this perspective that the Kenya Railways will, during the conference, seek to hear stakeholders’ views on how to overcome these challenges.

Container Freight Stations (CFSs) have also proposed to clear goods at their facilities and hand over containers to KR at the port for onward transportation to the ICD, in a deal that will include return of empty containers. This, if accepted, might solve the problem for KR and KRA since all the procedures will be done at the CFSs.

According to former KPA managing director Gichiri Ndua, the challenge of returning empty containers might remain problematic since once goods have been delivered to the importer, ferrying back the boxes becomes an issue of “bonus income” to the transporter which is not a priority.

“The solution needs to be well thought out and involve all the stakeholders because most people are more concerned about imports because there are less exports to go with the return containers,” he said on phone.

In an earlier interview, Mr Maina said KR would sign service level agreements (SLAs) with clearing and forwarding agents, importers and exporters on how cargo would be handled once it lands at the ICD.

Clearing and forwarding agents had raised concern that without the contracts it was not clear who would be responsible in case of delays to deliver goods or return of empty containers.