Effects of Standard Gauge Railway (SGR) Policy on the cost of imported cargo transport in Kenya

Abstract

The paper investigated the effects of SGR cargo transportation policy on the cost of cargo transportation in Kenya. Descriptive research design using cross-sectional survey and concurrent mixed methods were employed.  Primary data was obtained from freight forwarding companies and cargo owners and key informants in imported cargo transport sector. In realizing the study objectives, univariate, multivariate, cross tabulations and multinomial logit regression were adopted. The study established that enforcement of SGR cargo transportation had substantially increased the cost of transporting imported cargo from the port of Mombasa to the final destination through increases in last mile transport costs, return of empty container costs and demurrage charges. The paper recommends designing of costing model for SGR, which takes into account last mile transport costs and costs of returning empty containers to Mombasa port, this is in consultation with industry players.  Kenya Railways Corporation to consider of partnering with private trucking companies to provide last mile cargo transport services from ICD to Nairobi metropolis. SGR to provide return of empty containers services to the port of Mombasa for all containers that are transported through it; enhanced efficiency in cargo clearance by at Nairobi Inland Container Depot; negotiate with shipping lines for more free days before imposing demurrage charges. Lastly, cargo owners should re-align their cargo transportation arrangements to SGR by prompt arrangements for documentation requirements and advance organization for last mile transportation services. Keywords: Standard Gauge Railways, policy, transportation cost, imported cargo and last mile &nbsp