The freight and logistics industry in Kenya is at a critical point as it bids to realign itself to the realities of the 21st Century trade habits and best practices in a globally competitive business environment. Further, continual improvement on the country’s infrastructure in transport, ports of entry and telecommunications, as well as new frameworks in terms of government policy and regulation has direct impact on how the logistics sector is shaping.
This new dawn requires all players to adjust accordingly if they are to remain relevant and competitive, as the government focuses on the delivery and implementation of the Big 4 Agenda.
This observation was made by stakeholders attending a two-day Freight Forwarding and Logistics Business Summit (FFLBS) organized by the Kenya International Freight and Ware-house Association (KIFWA) at a Nairobi Hotel, Thursday, September 13, 2018.
The Executive Director of Federation of East Africa Freight Forwarders Association (FEAFFA), Mr. John Mathenge, who presided over the official opening of the summit, underscored the importance of the logistics sector to the country’s economy, noting that the success of the country is a factor of convergent efforts from all stakeholders.
“Trade,” Mr. Mathenge observed, “is globalizing and in order to survive, we have to delve in the various emerging issues in the sector.”
Regarding change management, he urged stakeholders “to embrace change and work around it to ensure a positive impact on Kenya’s economic development.”
The FFLBS 2018 is the first of its kind in the region bringing together government, international and domestic participants from logistics, warehousing, transport and fleet management and insurance companies to build networks, exploit opportunities and strengthen their market position.
In her remarks, the Vice Chancellor, Prof. Victoria Wambui Ngumi, who was represented by the Acting Deputy Vice Chancellor in charge of Administration, Prof. Bernard Ikua, said, JKUAT’s mandate is to train competent human resource for the industry as well as conducting research to address various challenges.
“JKUAT cannot make progress without working closely with the industry players. JKUAT is a member of Linking Industry with Academia (LIWA) partnership where the institution is focused on developing innovative systems approach to address efficiencies in all sectors including logistics,” said the Vice Chancellor.
Prof. Ikua, who was accompanied by Dr. Karanja Kabare and Dr. Alice Simiyu, both from the College of Human Resource Development, emphasized the place of partnerships and singled out the existing MoU with KIFWA signed in 2018, where JKUAT is mandated to conduct research to address the some of the challenges facing the logistics sector.
He informed the summit that JKUAT recognized the need for training in logistics over 10 years ago, when it established the School of Entrepreneurship and Procurement that currently has students who include industry practitioners undertaking courses in areas such as procurement, shipping and freight forwarding, transport and logistics. “The partnership with KIFWA is very important as we engage in activities and initiatives aimed at supporting the implementation of all the pillars of the Big 4 Agenda, Prof. Ikua concluded.
KIFWA National Chairman Mr. William Ojonyo said KIFWA had organized the forum in order for the stakeholders to engage and propose sustainable solutions aimed at achieving efficiency in the industry and driving the country’s economic progress. He isolated various challenges clearing and forwarding agents and importers are facing in cargo clearance at the port and the Internal Container Depot Nairobi (ICDN).
The participants contended that while the SGR infrastructure is revolutionary in terms of ease of transporting cargo and from Mombasa to Nairobi and beyond, there have been serious challenges to the uptake of the infrastructure due to a number of challenges, key among them; the disconnect between stakeholders in decision making and implementation of policy decisions.
Mr. Ojonjo gave an example of one such decision taken by government whereby cargo is put on SGR from Mombasa port to ICDN for clearance, whose effect has been largely negative to the trade with “KIFWA stating that road transport players have lost at least 60% of the cargo that was moved through the 500 kilometre-distance.”
Mr. Robert Ileve of Kenya Revenue Authority (Customs) revealed the “strategy turnaround in KRA’s approach from enforcement-based to compliance-based” in their operations, noting KRA was keen on managing compliance as a model for doing business as a way of embracing the changing realities and dynamics.
The Kenya Private Sector Alliance (KEPSA) representative Ms. Triza Baraza observed that “Cargo traffic handled at the port of Mombasa has increased from about 22 million tons in 2013 to an estimated 30 million in 2017 and may reach over 50 million by the year 2030. She said, these development calls for increased efficiency in cargo handling, clearing and forwarding in order for us as a country to keep up with the rising demand and also improve the turn-around time at the Port.”
During panel discussion, Apostle John M. Waweru, Managing Director, Global Business Commanders called for the need for “all government agencies to develop a working protocol that is in agreement with international trade standards and each of them need to take one duty which should not be duplicated by the other agencies, a fact that has previously made clearance of goods costly and time consuming.
The summit was convened against a backdrop of campaigns to have importers freely choose rail transport which has been met with its share of logistics challenges, which the players claim, has pushed up the cost of importation and clearance.
The summit will come up with a stakeholders’ strategy position document including recommendations that will be shared with Government to inform policy interventions aimed at addressing and streamlining the freight and logistics industry challenges.