Home General Freight agencies stare at bleak future as SGR roars

Freight agencies stare at bleak future as SGR roars

by kenya-tribune

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Owners of Container Freight Stations (CFSs) should invest in other sectors of the economy, Kenya Ports Authority (KPA) managing director Daniel Manduku said, adding that the Mombasa Port is now able to handle the volume of cargo it receives daily.

Lately, CFCs have been downsizing or relocating from Mombasa due to increased ferrying of goods via the standard gauge railway(SGR).

“If you go back in history, you will understand clearly why CFSs were created. First, it was because the port was congested and inefficient,” Mr Manduku said.

He explained that since cargo transportation is now efficient, there is no need for periphery storage at the port.

“The port is less congested. They must be honest with themselves. Once there is no congestion, by either increasing our capacity or having efficient evacuation systems, then we don’t need CFSs,” he said.

By last week, cargo at the port had reduced to 10,500 twenty-foot equivalent units due to efficient transportation by seven or eight trains daily from Mombasa to the inland container depot (ICD) in Nairobi via the SGR.

Some 1,300 containers arrive at the port daily, with about 800 being loaded to the trains.

Mr Manduku was speaking on the sidelines of the International Association of Maritime Economists conference at Pride Inn Hotel in Shanzu, Mombasa.

The event began on Tuesday, September 11, and ended on Friday.

His statement is expected to hit CFS businesses even harder, as they have trimmed down their operations in the wake of competition from the cargo trains.

More than 100 truck drivers have also been sacked owing to lack of business, the Kenya Transporters Association says.

Mr Manduku said conducive business opportunities are not found only in CFSs, but also in other sectors of the blue economy.

“That is why we are starting the Sh30 billion Dongo Kundu Free trade project. Investors in CFSs should instead tell us to fast-track construction of this port.

“That project is a game changer. It will help them start industries and open up thousands of jobs. It is a good place for these investors. It is not a must that a CFS must work at Mombasa port; they can invest in the blue economy. That is why we are constructing the Sh20 billion Shimoni Port and another one at Kilifi,” he said.

Shippers Council of East Africa chief executive Gilbert Langat said CFSs have reduced their operations due to increased transportation of goods by train.

“But they have not closed down; they have merely downscaled,” he said.

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