Kenya Ports Authority (KPA) has announced new rates for freight transported through the Standard Gauge Railway (SGR) in an aim to woo users and step up competition against truckers.

In a notice, the authority revealed new tariffs which have been reduced by more than $50 (Sh6,500) for services rendered to containerised cargo destined to the Nairobi Inland Container Depot (ICD) and Nairobi-based Container Depot Freight Stations (CFS). Before the new tariffs, the port charged about Sh18,900 ($145) for a 20-foot container and about Sh26,000 ($200) for a 40-foot container.

Post- announcement, the port will charge Sh13,400 ($103) for a 20 feet container, while that of 40 feet container will cost Sh20,405 ($157) for the two destinations. The ones ferrying goods in bulk will be granted a special rate whereas imported containerised cargo transferred to these CPSs via ICDN will benefit from a discount.

In the rates, traders who use a facility with cargo volumes of between 500-100 twenty feet equivalent units (TEUs), will pay Sh12,738 ($98) for 20 feet container and Sh19,497 ($150) for 40 feet, while those importing between 1001 to 1500 containers per month will pay Sh12,478 ($96) for 20 feet and Sh19,107 ($147) for 40 feet box.

Shore handling rates

Additionally, importers who will use facilities in bulk where those transporting more than 1501 TEUs and above every month, will pay Sh12,088 ($93) and Sh18457 ($142) for 20-foot and 40-foot containers respectively.

Shore handling rates are applicable for imported containerised cargo railed to Nairobi-based CFSs without passing through the ICDN (Mombasa port clearance).

The imported containerised cargoes railed to CFSs without passing through the ICDN, will benefit from the volume-based rebates where those importing less than 1000 TUEs but above 500 containers, will be charged Sh12,348 ($95) for 20 feet container and Sh18,197 ($140) for 40 feet box whereas those ferrying between 1000-1500 TEUs every month will be charged Sh11,698 ($90) and Sh17,547 ($135) for 20- and 40-feet containers respectively.

Any trader using SGR to ferry more than 1501 TEUs will be charged Sh10,398 ($80) for 20 feet and Sh15,597 ($120) feet for a 40-foot container.

Those transporting on a small scale will be charged Sh13,648 ($105) for 20 feet and Sh20797 ($160) for 40 feet. KPA has also given an incentive of additional storage-free period to importers who clear container units, depending on the volumes.

This announcement comes amid struggles in the SGR freight sector. Earlier this year, KPA disclosed a 19 per cent decline in freight traffic passing through the SGR and the ICDN, with figures dropping persistently since 2019.

According to the KPA Annual Review and Bulletin of Statistics, the total twenty-foot equivalent units (TEUs) utilising the SGR in 2019 amounted to 418,830 containers. However, this figure saw a significant decline, dipping to 338,394 containers by 2023.

Additionally, the number of trains ferrying cargo from KPA also witnessed a reduction, decreasing from 4,255 trains in 2019 to 3,512 trains in the past year.

Similarly, the Nairobi Inland Container Depot experienced a parallel decline, with only 332,100 containers passing through the site compared to 403,665 containers in 2022. This is despite a 6 per cent increase in cargo using the Port of Mombasa. Also, in an attempt to boost the sector, the Kenya Railways Corporation (KRC) had also backed expansion of the list of commodities transported on the SGR to support the growth of volumes of cargo, which showed signs of flattening in the year ended June.

Principal commodities

The corporation had announced that it added more principal commodities such as edible oil, cement clinker and steel to the list of goods it moves on the SGR to sustain the growth of the freight business.

The Shippers Council of Eastern Africa (SCEA) has applauded KPA for timely intervention, which will help reverse the 17 per cent reduction in volumes handled at the ICDN over the years.

“We are happy with the rate. Shippers using ICDN facilities enjoy improved efficiencies which have seen cargo dwell time averages 3.5 days,” SCEA chief executive Agayo Ogambi.

He said the promotional rates must be augmented with the enhanced and predictable railage. Any delays shall negate the intended objectives of the promotional rates.