SGR: What Does the Project’s Construction Mean for Shippers?

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Port traffic and by extension Port throughput has increased in the recent past. The Port of Mombasa recently hit a million containers mark in a single year. This development is partly due to the activities of the importers and exporters in the region. The Shippers Council of Eastern Africa (SCEA), is a membership organization that has set out to articulate the concerns and demands of the importers and exporters to service providers and government regulatory institutions with a view to finding solutions to numerous challenges and inefficiencies in logistics.

It was on this background that Kenya Railways and the Shippers Council of Eastern Africa held a consultative forum on the Standard Gauge Railway on 28th and 29th April, 2016 at the Panari Hotel. The forum sought to address how the shippers should position themselves to benefit from the construction of the Standard Gauge Railway line which is due for completion mid next year.

The event was presided over by the Transport Principal Secretary Mr. Irungu Nyakera and attended by among others the Shippers Council of Eastern Africa Mr. Gilbert Langat, CEO VIVO energy Mr. Polycap Igathe and the Group CEO Rift Valley Railways Mr. Isaiah Okoth.

Speaking at the forum, the Transport PS Mr. Irungu Nyakera said the project is on course for completion in June, 2017 and the Ministry through Kenya Railways has already kick started plans to ensure efficient management of operations on the line. He highlighted that there will be a major shift of cargo from the roads to railways and that process to identify an operator was underway.

“We are on course to completing the construction phase of the project. We understand your concern regarding this project and the need to safeguard your interests. The project will transform the transport scene in a very profound way and the shippers will be affected. The Government recently advertised for an operations advisor who should come on board soon. This is all in a bid to ensure that the project once complete will be able to serve the needs of Kenyans and the region efficiently,” he said. “With this development, railway transport is set to be the backbone of an efficient, sustainable multimodal transport system in the country that will include last mile transport to the end point of the cargo transported.” he added.

On his part, Shippers Council Managing Director Mr. Gilbert Langat stressed that performance of the railway matters a lot to the importers and exporters. He highlighted various aspects of railway transport operations that define a reliable and competitive railway system and called on the Corporation to benchmark with the best industry players on the global scene in order to deliver a service that will satisfy the needs of the local, regional and international trader.

“The cost of moving goods across borders is constantly rising. This is why we are here; to discuss what the development of the construction of the Standard Gauge Railway signifies for the shippers of this region. It is important that we understand how to define and measure the performance of the SGR.

What are the performance indicators that will determine the relevance of the SGR to shippers? For instance, a wrong pricing strategy compared to other existing modes of transport will totally yield different results than what is anticipated,” he said.

The forum which was dubbed, ‘Leveraging on the capacity of the Standard Gauge Railway: cost and efficiency in supply chain logistics’ entailed a tour of the project by the shippers from Nairobi to Mombasa.