Shipping fraternity shrugs off Kenya's logistics hub quest

The global shipping fraternity appears to have shrugged off Kenya’s quest for an African logistics hub status despite huge investments in infrastructure projects.

Instead, freight forwarders and express carriers from across the world have ranked Kenya’s logistical attractiveness at position 63 in 2018, down from 42 in 2016, the last time the World Bank conducted the survey.

This implies that recent infrastructural developments and upgrades — among them the standard gauge railway, dredging and automation of Mombasa port, and commissioning of major highways — have not helped Kenya's case.

The Logistics Performance Index 2018 which is based on a worldwide survey of global freight forwarders and express carriers also ranks Kenya fourth in Africa, down from the second slot the country occupied just two years ago.

Kenya now trails South Africa, Botswana and Egypt.

The World Bank's Logistic Performance Index titled Connecting to Complete reviewed six core performance parameters namely; customs, infrastructure, international shipments, logistic quality and competence, tracking and tracing and timeliness.

It finds that Kenya’s best performance was in timeliness where it scored 3.1; where one denotes the worst while five represents the best performance.

The report notes that the frequency with which shipments reach consignees within scheduled or expected delivery times is almost always guaranteed.

In terms of tracking and tracing consignments from the first stage to delivery, Kenya scored 3.07, showing promise of even a better score come 2020.

Kenya’s weakest link was in the quality of trade and transport infrastructure where it scored a dismal 2.55 out of 5.

The report notes that Kenya’s transport network “is fair” but needs to improve if the country is to measure up to its peers in the low-middle income category globally.

“A well-functioning domestic and international logistics is a precondition of national competitiveness,” said Young Tae Kim, Secretary-General the Organisation for Economic Co-operation and Development.

Another notable revelation in the survey was that, of all shipments that find their way into Kenya, only 53 per cent pass the standards tests — raising questions on the quality and fitness of the other 47 per cent.

The World Bank further states that only 39 per cent of imports into the country are physically inspected, meaning that at least three in every five imported goods are not inspected physically.

It remains to be seen how the infrastructure projects coming up will boost Kenya’s logistics outlook.

The projects underway include the Lamu Port South Sudan Ethiopia Transport corridor and the Nairobi-Malaba standard gauge railway. Only recently, Kenya launched the Nairobi inland container depot with a number of such dry ports still lined up between Mombasa and Malaba.

Research shows that logistics is the backbone of global trade. Labelled a Sh430 trillion industry ($4.3 trillion) that affects nearly every country in the world, logistics is the network of services that supports the physical movement of goods across borders.

According to the Logistics Performance Index 2018, high income countries lead mainly because of the financial muscle and technological development.

With Germany leading on the global front the top 10 list is made of mainly European and Asian countries with the United States in the tenth position.

In most middle and low income countries, most reforms involve more than one stakeholder therefore slowing policy implementation within agencies and the country as a whole.

“For consistent, broad reforms and improvements countries must deal with complexity of implementing systems,” says the report.

“Countries in the middle and lower tiers of performance are deterred by weaker coordination in mechanisms, private sector contribute more than the government compared to high income countries who boast of modern and innovative logistics sectors,” It adds