Kenya Railways has started talks with shippers and cargo owners in a spirited search for business that will meet the capacity of the upgraded Internal Container Depot (ICD) and standard gauge rail line in the heat of competition from truckers.
Atanas Maina, the KR managing director, says they are selling efficiency and reliability of the SGR to win business from the roads to the rails.
“We are discussing with the shippers and cargo owners to see how best we can work together to increase the volumes of cargo that is ferried through SGR,” said Mr Maina.
When launching the ICD on Saturday, President Uhuru Kenyatta said they were targeting 30 to 40 per cent of the cargo that is ferried by road to move to SGR.
There have been fears that the ICD terminal in Embakasi might fail to meet the required volumes of cargo because of the charges that the firm will be levying on freight. The terminal has a capacity of 450,000 containers.
Road transporters have been charging an average of Sh80,000 per twenty foot equivalent units (TEUs) container from the coastal city to Nairobi’s Nairobi Inland Container Depot (ICD), but there are others who have been charging as low as Sh60,000 for the same.
KRC will charge $500 (Sh50,000) to transport the same size of container between the two cities.
Truck owners, who argue that they would have preferred using SGR if the rates were favourable to them, say there is an aspect of last mile, which would require them to incur extra charges from the ICD to the final destination.
“For the last mile connection from ICD, a customer will have to incur an extra Sh20,000 on the minimum, and this is within Nairobi. For the cargo destined for outside the city, the charges will be even more,” said an official of the shippers council.
Mr Maina says they will have talks with truckers to agree on the common cost to be charged for a specific route.
“We want to be in agreement with truckers on the last mile connection and this is the reason we are going to have talks with them so that we agree on a common figure,” he said.
According to KRC, the country has so far received 25 freight locomotives out of the 43 on order. It has also received 763 wagons out of the 1,620 units it expects.
The 25-tonne axle flat wagons can each carry a payload of 70 tonnes, implying 1143,400 tonnes can be hauled in all of them and deployed on a single trip to Nairobi.
The trains are designed to move at a speed of 80 kilometres per hour, compared to the existing metre gauge rail trains, which on average do about half that speed.
The launch of the cargo service brings the railway to full operation, with the line having been transporting passengers since June.
The second phase of construction of the SGR covering 120 kilometres to Naivasha is set to begin in earnest in the new year, with the railway expected to reach Kisumu by 2022.