By Brendon J. Cannon
In order to bring port services closer to customers and reduce port congestion, Kenya Ports Authority (KPA) has constructed or refurbished inland container depots (ICD) at Nairobi, Naivasha, Kisumu and Eldoret. These depots are linked to the Mombasa Port container terminal by a rail connections and service. They will also be accessible by road allowing trucks to continue delivering large numbers of containers. Imports are delivered directly from Mombasa to the depots on a “Through Bill of Lading”, while exports can also be consolidated at the ICDs and sent by rail to the Port for shipping.
The ICDs may revolutionize cargo handling in Kenya and East Africa, allowing the Port of Mombasa to maintain its prime position as the go-to port for exports and imports in East Africa. They would do so by easing backlogs at the Port and ensuring speedy delivery of containers to various inland destinations where they would then undergo customs and security checks. However, should the ICDs simply recreate the bureaucracy and backlog currently witnessed at the Port of Mombasa, Kenya risks losing its status as the gateway to East Africa as other ports such to the north and south are refurbished and put into use.
Inland Container Depots defined
ICDs are sometimes referred to as Inland Port Depots or dry ports because they are inland (away from the sea), intermodal terminals directly connected by road or rail to a seaport and operate as centres for the transshipment of sea cargo to inland destinations.In addition to their role in cargo transshipment, ICDs may also include facilities for storage and consolidation of goods, maintenance for road or rail cargo carriers and customs clearance services. The location of these facilities at Kenya’s various ICDs should, in theory, relieve competition for storage and customs space at the Port of Mombasa. The ICDs were established to realize maximum benefits of containerization of cargo and to avoid over-investment in port facilities and storage capacity.
According to KPA, new, refurbished and/or significantly expanded ICDs were established for the following strategic objectives:
• Bring Port services closer to hinterland customers- customers based in the hinterland can have access to the same services offered at the port of Mombasa without having to travel all the way for the same thus saving time and money. The ICDs are therefore an efficient shipping solution
• Decongesting the Port of Mombasa – the ICDs help decongest the container terminal at the port by reducing container dwell time through enhanced take-off of import containerized cargo for clearance at the ICD. In addition, the depots also facilitate for the dispatch of export containers therefore increasing container turn-around time creating more space at the Container Terminal in Mombasa.
• Minimize road damage and carnage – the ICDs facilitate the diversion of heavy container traffic from the road to rail. This in turn minimizes road damage caused by heavy trucking thus ensuring smoother roads while giving them more life.
• Provide safety and security to transit cargo – cargo transported by rail is safer and more secure therefore ensuring the safe transportation of cargo to and from the port of Mombasa
• Saving customer costs – Customers reduce the amount of time and money that would have otherwise been spent traveling all the way to the Port of Mombasa to clear or forward cargo
Additionally, Kenya’s ICDs are or will shortly be linked directly by rail to the Port of Mombasa through a service called ‘railtainer’ provided by the Rift Valley Railways and use both the new standard gauge railway (SGR) and the existing meter gauge railway (MGR). This service will reportedly transport containerized cargo by rail with a Through Bill of Lading (TBL) status therefore allowing containers to be sent by rail directly to a satellite terminal and thus bringing “dry port” facilities to the commercial heart of Kenya and transit countries. KPA reports that the ICDs will provide a more efficient and cost-effective transport solution for importers and exporters as well as relieving some of the serious congestion at the Port of Mombasa by enhancing throughput capacity via the quicker and easier clearance of cargo and container handling destined for ICDs.
The Nairobi ICD is located within a fenced area of 18.7ha at Embakasi and has a capacity of 180 000 TEU per annum. Due to its geographic position, the Nairobi ICD is best positioned to serve local traffic. It does, however, serves as a transit point for traffic to Kisumu. The Kisumu ICD in Kibosis designed for a capacity of 15,000 TEU per annum and has recently recorded a 150 per cent increase in its traffic. Plans are underway to transform the Kisumu dry portto become a transshipment point between the Port of Mombasa and other remote Kenyan counties along the Northern Corridor as well as Uganda, South Sudan, Rwanda and Burundi. The Kisumu ICD may be complimented by the Eldoret ICD, which was established in 1994 to primarily target the land-locked countries of Uganda, Rwanda and Burundi. However, this dry port facility is not currently in use and the volume of traffic heading from Nairobi to the Rift Valley and neighboring countries to the north is low given lack of rail and road connections and instability in South Sudan.Given the state of the Eldoret ICD, the Naivasha ICD will likely take its place and benefit from being attached to the standard gauge railway (SGR) spur from Nairobi. The Naivasha facility will reportedly provide storage of cargo especially those destined for Uganda, South Sudan, Northern Tanzania, Rwanda, Burundi and Democratic Republic of Congo. The SGR will be vital to the functioning of the ICDs and, once completed, will reportedly handle more than 20 per cent of the cargo coming through the Mombasa Port, as part of this will be taken to Naivasha for storage and help reduce congestion at the Mombasa Port.
Kenya’s neighbours may also develop their own ICDs with reports that there is a project underway for the establishment of an ICD in Kampala. Rwanda is also reportedly improving operations at its container depot in Gikondo with assistance from the KPA and there are reports that. Dubai Ports World plans to construct a US$40 million ICD in Masaka, a suburb of Kigali, as Rwanda seeks to become a regional trade logistics centre.
Potentialities and Problems
The development and expanded use of Kenya’s ICDs will potentially have major implications – both positive and negative for Kenya and East Africa. The ICDs will, theoretically, make for much quicker movement of goods and thus alleviate some of the backlog and inefficiency that has bedeviled the Port of Mombasa for decades. In other words, containers destined for points inland from Mombasa should be unloaded from ships and re-loaded on trains using either the SGR or MGR heading to one of Kenya’s ICDs.
According to Atanas Maina, the Managing Director of Kenya Railways (KR), cargo evacuated from the port of Mombasa via the SGR will no longer need to be cleared by the various agencies operating at the Port, to include the Kenya Ports Authority (KPA), Kenya Bureau of Standards (KEBS), Kenya Revenue Authority (KRA) as well as security screening. Rather, all agencies and security will be located at the various ICDs, thus speeding movement of the containers from Mombasa to ICDs further inland. According to Mr. Maina, the clearance process at the ICDs will be as efficient as the process in Mombasa. But therein lies a problem. The clearance and customs process as well as security screening has been neither efficient nor effectual at Mombasa. If KPA and other agencies responsible for the clearance and import/export process have been unable to properly manage cargo at the Port, why would the creation of ICDs with the same bureaucracies yield different results? Certainly, the movement of cargo quicker from the Port will free up space and therefore time at the Port. But the concern is that the delay may simply be added on in Nairobi or Kisumu at the ICD. Additionally, the lack of security screening at the Port may have some unwanted consequences. Assuming that contraband or dangerous cargo are allowed inland prior to screening, the chain of acquisition becomes infinitely more complex and also may result in substances or weapons being used against a wider array of targets. This is of less concern when the container cargo is shipped directly from the ship inland via rail. However, should the containers be loaded on trucks the ability of authorities to track and/or recover the cargo becomes infinitely more difficult.
Truck versus Rail
This particular security problem brings up a further issue surrounding the use of trucks to ferry containers destined for import and export to and from Mombasa. Truck operators have dominated cargo ferrying in Kenya for decades, with rail volumes dropping from about 70 per cent in the 1970s and 80s, to a paltry 5 per cent today. Truckers and their companies fear that increased rail-tainer traffic may edge them out of business. However, the likely outcome will be increased truck and rail traffic. This will occur for two reasons. First, the addition of rail-tainer traffic via the SGR and MGR and various ICDs will likely result in increased efficiency in shipment of cargo from the Port. But it is currently estimated that only fourfreight trains will operate daily consisting of 54 double-stack flat wagons, carrying 216 twenty-foot equivalent units (Teus) per trip with a load of 4,000 tonnes on each train. In other words, the rail-tainer traffic will only account for a fraction of the Port’s imports and exports. As such, there will likely continue to be a huge amount of cargo for trucks and, should the promise of ICDs prove true, perhaps an influx. Second, trucks will continueto be the last-mile transporters between ICDs and the cargo’s final destination in Kenya. Reports indicate that cargo owners may spend between Ksh15,000 and Ksh20,000 on the last mile transport to industries within Nairobi alone, depending on the distance from the ICD. Those rates will increase as cargo is sent further afield to locations distant from Nairobi, Naivasha or Kisumu.
ICDs and the future of Cargo in East Africa
There are nascent concerns in Kenya and elsewhere that Mombasa Port is losing its titular place in East Africa as a transshipment point. Landlocked countries which have been dependent on Kenya and the Port of Mombasa for decades are reportedly hedging their bets as alternative port construction and refurbishment continues from Djibouti in the north to Dar es Salaam in the south. Limited alternatives to Mombasa have previously meant that Uganda, Rwanda, South Sudan and Burundi are largely dependent on the Port even with its reputation for labor unrest, high costs, delays and congestion. This could soon change as Tanzania spends big on upgrading its ports of Dar es Salaam and Tanga and builds corridors connecting its Indian Ocean ports to the hinterland and neighbouring countries. Djibouti, while not a traditional competitor to Mombasa, is also spending large sums in infrastructure upgrades with the help of China and is also setting up a free trade zone that it expects could be the ‘Dubai’ of the Great Lakes region. Mogadishu port is now operating efficiently in Somalia and Dubai Ports World is also developing the brown water port of Berbera in northern Somalia. All this development potentially spells competition for Mombasa.
While much of the reporting on alternative ports to Mombasa appears to be conflictual (one report decries the loss of Mombasa’s traffic to Dar while another report catalogs the loss of Dar’s traffic to Mombasa), cargo volumes may fall given newer alternatives. Kenya can effectively address this eventuality ensuring that the ICDs function as envisioned as well as using both rail and trucks efficiently and effectively. Should bureaucratic logjams be cleared at both the Port and the ICDs and container traffic flows smoothly from Mombasa to Nairobi, Kisumu and points beyond, Kenya may not need to worry about a drop in container traffic as Mombasa Port’s reputation for inefficiency and cost recedes. However, should the ineptitude and bureaucracy of Mombasa simply be reproduced at the ICDs and should infrastructure development and maintenance – particularly roads – not proceed apace, Kenya may see its status as East Africa’s gateway dissipate.
(n.d.) Inland Container Depots. Kenya Ports Authority. https://www.kpa.co.ke/EquipmentsAndFacilites/Pages/Inland-Container-Depots.aspx
(2017). Inland Container Depots. Norther Corridor Transit and Transport Coordination Authority. http://www.ttcanc.org/page.php?id=32
(2017, January 9). Nairobi ICD upgrade completion set for May. Freight Logistics. http://feaffa.com/magazine/2017/01/09/nairobi-icd-upgrade-completion-set-for-may/
(2017, January 10). Does Kenya’s SGR Signal the Death of Cargo Truck Operators?Sidoman. http://www.sidoman.com/does-kenyas-sgr-signal-the-death-of-cargo-truck-operators/
Banzi, A. (2016, September 10). Tanzania government steps in as cargo volumes fall at Dar port. The East African. http://www.theeastafrican.co.ke/business/Tanzania-government-steps-in-as-cargo-volumes-fall-at-Dar-port/2560-3376410-20gy8r/index.html
Beja, Patrick. (2016, August 29). Road transport operators in Kenya worried that SGR will edge them out. The Standard. https://www.standardmedia.co.ke/business/article/2000213867/sgr-sends-jitters-across-road-sector
Esiara, K. (2016, January 23). Rwanda aims to be EA’s logistics hub. The East African. http://www.theeastafrican.co.ke/business/Rwanda-aims-to-be-EA-s-logistics-hub/2560-3045810-7raa9az/index.html
Kamau, M. (2017, February 21). Why Kenya may lose out on shipping billions. The Standard. https://www.standardmedia.co.ke/business/article/2001230211/why-kenya-may-lose-out-on-shipping-billions
Marete, G. (2017, June 15). SGR train may not reduce freight costs, agents say. Business Daily. http://www.businessdailyafrica.com/news/SGR-train-may-not-reduce-freight-costs–agents-say/539546-3971956-clnqfiz/index.html
Mtila, R. (2014, December 1). Is Mombasa Port losing out to the regional ports of Djibouti and Dar es Salaam? Indian Ocean Observatory. http://www.theioo.com/index.php/en/economy/item/419-is-mombasa-port-losing-out-to-the-regional-ports-of-djibouti-and-dar-es-salaam