State offers more incentives to woo cargo owners to use SGR

Containers on board the Standard Guage Railway (SGR) Freight Train hauling sails along the Mwamdudu fly-over at Miritini headed to the port of Mombasa for export, January 08, 2018. This is the first SGR freight train hauling export cargo of 52 TEUs containers loaded with French beans, Coffee, wood carvings, hides and skin to be exported to Europe through the port of Mombasa. [PHOTO BY GIDEON MAUNDU/STANDARD].

The Government is pulling all stops to get cargo owners to use Standard Gauge Railway (SGR) freight service and Nairobi’s Inland Container Depot. The latest move is the slashing of cargo handling fees at the depot in Embakasi.

Kenya Ports Authority (KPA) yesterday reduced its cargo handling charges by as much as 23.5 per cent for cargo destined for the Kenyan market and by almost a third for goods that are being re-exported to other countries in the region.

The move by KPA is the latest attempt aimed at getting private sector to use the services of the two facilities that are yet to attract adequate cargo despite numerous incentives by the State agencies as well as directives to importers to use the services.

The ports agency reduced the handling fees for a 20 foot container to Sh8,100 ($80) for 20 foot container destined for the Kenyan market, a 22 per cent reduction from Sh10,400. Handling a 40 foot container will cost 23.5 per cent lower, with the new charges now at Sh12,100 from Sh15,900.

Cargo owners re-exporting to the region will pay 29 per cent lower charges of Sh6,000 ($60) for a 20 foot container from Sh8,500 ($85) and ShSh9,000 ($90) for a 40 foot container from Sh12,500 ($125).

“In order to promote the use of the Inland Container Depot Nairobi (ICDN) by Nairobi and transit clients who wish to nominate ICDN as a point of cargo delivery, KPA has given a rebate on tariffs…the new tariffs take effect immediately,” said KPA in a public statement yesterday.

The lower tariffs are in addition to Kenya Railways dropping charges for using the SGR cargo service in a promotional tariff, which ends on April 5 but offers importers what can be termed as rock bottom rates.

Under the tariff, importers pay Sh15,000 ($150) to move a 20 foot container from Mombasa to Nairobi and Sh20,000 ($200) for a 40 foot container. The offer is a huge discount and is in comparison to Sh39,900 standard SGR charges for a 20 foot container. It is also in comparison to trucks on roads that can cost anything between Sh80,000 and Sh100,000.

Meet daily capacity

The State agencies in a letter to industry players mid-February appeared to be directing them to use SGR and the Nairobi ICD to move all cargo destined for Nairobi onwards including re-exports.

In a letter by the Kenya Ports Authority, Kenya Maritime Authority and Kenya Railway Corporation to shipping lines and importers, the State agencies said cargo that was not destined for Mombasa and its environs would enable them meet daily capacity for SGR.