Kenya Railways Slashes Mombasa to Naivasha ICD SGR Freight Rates by 15%
Kenya Railways (KR) has reduced the Standard Gauge Railway (SGR) cargo tariffs by 15% to promote Naivasha Inland Container Depot’s (Naivasha ICD) use. The new freight rates came into effect on 16th February 2021.
Through an update on their website, KR says that a 20ft container on an upward journey (Mombasa- Naivasha) will now be charged USD 510 from USD 600 previously charged. On the same route, a 40ft container of up to 20.9 tonnes will be charged USD 725 from USD 850, while a 40ft container above 21 tonnes will be charged USD 775 from USD 910.
On a downward journey (Naivasha to Mombasa), the new rates indicate that a 20ft container will be charged USD 255, USD 360 for a 40ft container of up to 20.9 tonnes and USD 390 for a 40ft container above 21 tonnes. Hauling of empty containers by rail back to the port will cost shippers USD 120 compared to USD 180 charge if they wish to transport by road. Conventional cargo is charged at a rate of USD 0.044 per ton/Km (tonne per kilometres). The rail distance from Mombasa to Naivasha ICD is 553 kilometres. However, it is noteworthy that the freight rates do not cover handling charges.
A rubber-tyred gantry crane loads a container onto a truck in Naivasha ICD.
The move follows an outcry by the Private Sector on issues with operational efficiency and cost-effectiveness of Naivasha ICD and the request through a multi-stakeholder report produced in November 2020 for a 50% reduction on freight rates. The report commissioned by The Kenya Private Sector Alliance (KEPSA) in partnership with the Shippers Council of East Africa (SCEA) had proposed the reduction of rates from USD 600 to USD300 for 20ft container, from USD 800 to USD 400 for 40ft container of up to 20.9 tonnes, and from USD 910 to USD 500 for 40ft container above 21 tonnes.
Commencing operations in May 2020, the facility was expected to reduce transport costs, guarantee minimum non-tariff barriers (NTBs), facilitate fast and predictable cargo evacuation from origin to destination, and reduce greenhouse gas emissions generated from the transport sector, amongst others.
With the new rates, KR says that goods destined for the hinterland, Uganda, Rwanda, South Sudan, Burundi, Ethiopia, and the Democratic Republic of Congo can now be delivered cost-effectively to and from Naivasha, thus reducing the cost of doing business and spurring regional economic growth through trade facilitation.
Kenya Railways has in the recent past resumed the double-stack trains, each hauling 152 TEUs per move. The move is set to increase cargo evacuation speed from the Port of Mombasa to the ICDs. They (KR) are keen to sustain the efforts to reduce cargo dwell time at the Port of Mombasa.
Rehabilitation works on the Metre Gauge Railway are underway to link the Naivasha ICD to the Kenya-Uganda border to bring cargo even closer to destination for the transit countries.