July 5, 2016
On 23rd June 2016, the United Kingdom (UK) voted to leave the European Union (EU) which resulted in the resignation of UK Prime Minister David Cameron. The Kenyan economy remained steady with minimal change in the currency’s performance. This has largely been attributed to Kenya’s use of the US dollar as the main domestic currency for international trade. The dollar has continued to strengthen and remained relatively stable throughout the Brexit. The logistics industry in Kenya also remained rattled yet stable by this development with one of its key trading partner – Britain. Players in the logistics industry intimated that they are keenly monitoring the developments in Britain and assessing the long and short term impact of the Brexit.
At the port of Mombasa, export of agricultural produce is one of Kenya’s foreign exchange earners. Tea is one of Kenya’s main export commodities globally with Britain being a key market of the same. Gordon Omondi, Warehouse Manager at the Siginon Global Logistics adds, “The immediate impact of Brexit saw the depreciation of the British pound. Since UK re-exports to other members of EU, this market is likely to be affected by the rise in price. In the short term we are likely to see reduced activities from major exporters to the UK. In the long term Kenya may benefit from new markets as those that initially got tea from the UK may opt to import directly from Kenya. If this happens, then export volumes may increase in the long run. We continue to observe the market response so as to adjust accordingly”.
Perishables are another export mainstay through Kenya’s Jomo Kenyatta International Airport (JKIA). The perishables comprise of flowers, fruits and vegetables which account for up to 90% of all exports air freighted at JKIA to the EU markets primarily Britain, Germany, Netherlands and France. The perishables industry has seen players make additional investments in JKIA due to direct and indirect services delivered in the cool chain. Jared Oswago, Divisional Manager in Siginon Aviation says “The impact of Brexit has seen the British Pound loss ground against foreign currencies. This may in turn affect the demand for Kenyan perishable exports in a strategic market such as Britain. Multimodal movement of freight across the various European markets may be affected as UK may impose access restrictions. However, once the Brexit is fully affected, we will know the full impact.”
Britain is a key party to negotiating a number of EU of trade agreements, the Brexit means these agreements will need to be renegotiated a fresh which can be a lengthy process and this cumbersome process could lead to a decrease in trade volumes between the U.K. and Africa. Jared adds, “The Brexit gives Kenya an opportunity to diversify its export markets and seek new opportunities outside our traditional markets. In as much as the impact of the Brexit was not as severe in Kenya in comparison to other markets, as industry players we will observe and consult with our customers and prepare accordingly.”
Kenya is one of UK’s key trading partners in Africa alongside South Africa and Nigeria. The response of these markets to the Brexit were wide and varied, however, a cautious approach in managing the long term implications of this development has been taken by the respective governments to safeguard their economies.
June 3, 2016
Importing your car into Kenya is really as easy as 1-2-3. It starts with choosing the right logistics partner to help you freight your car of choice into the country without a hassle. With over 30 years in the logistics industry, Siginon Global Logistics is your best bet to smoothly handle your vehicle into Kenya at the best rate and deliver it to you safely and securely.
To help you through the sea freight process, here are a few steps that you should follow.
1. Facilitate the same, we will need the following documents for clearance:
• Original Commercial Invoice
• Original Bill of Lading –B/L (by sea) or Air Way Bill-AWB (by air)
• Authentic Original Logbook from country of origin.
If the logbook is in a foreign language, an English translation issued by the respective Embassy, High Commission or a consulate based here in Kenya must be furnished to Customs to authenticate the foreign logbook.
• Cancellation of the foreign Logbook
• Road worthiness Certificate by authorized Inspection companies.
• Personal identification number
• Identity card – for individuals OR a Certificate of incorporation/ registration – for companies
• Letter of authority – appointing Siginon Global Logistics as the appointed Clearing Agent.
• Form A
• Jevic inspection certificate
2. Once you have received the B/L/AWB Copy, invoice, Jevic Inspection certificate and foreign logbook, email copies to firstname.lastname@example.org to enable the Siginon Global Logistics to track the vessel and receive the vehicle as soon as the vessel is discharged/off loaded.
3. After the vessel/aircraft arrives at the port Mombasa or JKIA airport, we will arrange to receive the vehicle/s and safely transfer it to our CFS or Siginon Aviation air cargo terminal facility within 48 hours of the vessel docking at the Mombasa Port or 3 days for vehicles delivered by air.
4. The Siginon Global Logistics customs clearance team will electronically process the import documentation through Kenya Customs on the Simba 2005 system and clear the vehicle on your behalf. An import declaration fee (IDF) of 2.25% of the CIF Value subject to a minimum of Ksh.5, 000.00 is payable.
5. Customs officers based in the Container Freight Station (CFS) and Siginon Aviation will assess duty payable depending on the value of the item(s) and the duty rate applicable. The East African Community Common External Tariff lays out the duty rates of imported items.
6. Once we have declared the vehicle with customs, we will be issued with a Tax report also known as a customs entry which has a specific number unique to your car that shows the taxes payable, the duty payable on the importation of the motor vehicle is as follows:
Import Duty: 25% of the CIF value of the vehicle
Excise Duty: 20% of the (CIF value + Import Duty)
VAT: 16% of the (CIF value + Import Duty + Excise Duty)
IDF: 2.25% of the CIF value or Ksh. 5,000, whichever is higher, is payable. CIF – This is the customs value of the vehicle i.e. the Cost, Insurance & Freight paid for the vehicle. The CIF -value of the vehicle is also deduced from the Current Retail Selling Price (CRSP) of the vehicle.
• Duty is paid through a bankers cheque addressed to the “Commissioner of Customs KRA” or alternatively you can remit the funds to Siginon Group Ltd and we will arrange to make the payment on your behalf.
• Once the payment is made, the customs entry is passed by customs officers after which we proceed for physical verification of the unit against the documents. The verification confirms the details of the unit against the documents provided.
• Once all the details are confirmed, the entry is given the final release which means the vehicle has been cleared by the Kenya Revenue Authority –Customs department into the local market.
7. Secure port/CFS charges and pay. We will then consolidate all clearance documents and lodge for registration of the unit which takes approx. 3days.
8. Once we secure the registration plates the unit is driven out of the customs area. We will then deliver the unit to your doorstep either self-driven or by our own Car carrier, depends on your preference.
Important to Note:
* Left Hand Drive: All left hand drive vehicles are not allowed in Kenya for registration unless they are for special purpose i.e. Ambulances, Fire Engines and large construction vehicles imported for projects and to be eventually donated to the Kenyan Government.
*Road Worthiness: All used vehicles imported into Kenya shall be inspected for Road Worthiness, safety and other requirement.
For further information, please email: email@example.com or call +254 (0)20 210 81 85
May 16, 2016
Kenya is among the leading exporter of perishable cargo to various destinations across the globe. Currently, Kenya is a key importer of sensitive cargo from Europe, South Africa, Dubai and Asia while its key export markets for flowers and agricultural produce are in primarily found in Europe and parts of Africa.
Perishable cargo can be described as goods that will deteriorate over a given period of time if exposed to adverse temperature, humidity or other environmental conditions. As such, utmost care is required when handling perishable cargo which includes; fruits and flowers. Pharmaceutical cargo is also considered perishable cargo as their quality also relies on proper handling and at times maintenance in specified temperatures. However, for Kenya to claim its enviable position as a global leader in perishable cargo exports, a thorough and rigorous cargo handling program must be in place to ensure that the entire cool chain is secured and satisfies the cargo temperature and packaging requirements to ensure the cargo quality delivered is consistent with market demands.
Professional handling perishable cargo is critical as this type of cargo suffers a decline in quality when handled incorrectly. For the customer, this results in a drop in its market price and demand for the consumer; for the handler this results in millions of dollars in insurance claims. Consequently, professional handlers of perishables pay special attention to packing, handling and any other aspects of the perishables transportation process. This implies that all the players in the perishable cool chain such as growers, packers, cargo loaders, transporters and airlines receiving the perishables must adhere to a set quality service standards to ensure that the entire chain maintains and preserves the perishable cargo quality.
Siginon Aviation is a leading air cargo handler in JKIA, Nairobi, Edward Muchiri, the Export Manager states; “Perishable cargo, must be handled professionally throughout the entire cool chain from the farm to the final customer in a ‘Known Shipper Regime’. Siginon Aviation launched a new USD 10 million air cargo terminal on the airside of Jomo Kenyatta International Airport (JKIA) in Nairobi, Kenya. The facility has been strategically developed to perform warehouse activities and ground handling operations in JKIA. With a 5000 square metre of floor space, Siginon Aviation has dedicated an additional 3000 square metre of cold room floor space that is custom made to handle cargo that is perishable in nature. The terminal has the capability to handle temperature sensitive cargo enough to fill 2 freighters B747 at a given flight turn around with a direct access to ramp, pharmaceutical cage measuring 70 square feet, DGR storage facility for both imports and export. The Siginon Aviation air cargo terminal has a unique cool chain corridor that opens up into the JKIA airside that allows for direct movement of the perishable cargo from the cool corridor onto the air craft. This therefore reduces the exposure of the cargo to the open temperature. Edward adds, “The cool chain corridor is a one of a kind feature in the JKIA cargo environment. The design of Siginon Aviation’s cool chain corridor is a reaction to customer demands for a solution to movement of perishables from the warehouse onto the aircraft without tampering with the temperature requirements.”
Siginon Aviation handles temperature controlled shipments ranging from horticultural, agricultural products and pharmaceuticals. In addition, all classes of dangerous goods, explosives, flammable products, radioactive, gases, toxic substance, fragile cargo with “handle with care” specifications due to delicate nature and ease of breakage should they be poorly handled and pharmaceutical cargo that requires special storage and specified security measures due their high versatility. Edward Muchiri adds that “demands for sensitive cargo include but not limited to: special packages, specific instruction depending on the product, time bound temperature controls, high insurance costs due to claims if the cargo is not handled properly as well as security, safety and escort management requirements”.
Perishables handling further requires high caliber staff qualified in specialized cargo handling operations. The Siginon Aviation staff have been trained in additional special skills in Aviation operations such as cargo skills, live animal, perishable handling, aviation security and ramp safety. The operations team further undergoes annual refresher trainings to ensure the skills are up to date with current market demands.
Over the years, Kenya has seen an increase in exports directed to various international markets due to its global reputation as a trusted source of agricultural and horticultural produce. This position is further strengthened by industry players such as Siginon Aviation who adopt innovative solutions that safeguard the cargo quality and focus on customer satisfaction while benchmarking on international standards of operational excellence.
April 8, 2016
So you are looking for a credible forwarder for your goods in Kenya and are confused by the myriad of potential forwarders in the directory. Where do you start?
In this day and age of advertising, anyone can put up the best advertisement yet low on service. Or they may be a ghost company operating from a briefcase! The nature of freight forwarding depends a lot on mutual trust and communication between the vendor and cargo owner. As the cargo owner, you need to trust that your cargo will get to you in tip top condition as well as regular updates on the status of the shipment from source to its eventual delivery.
To make it a little easier, here are some 11 tips to find a credible logistics partner for your cargo.
- Experience: An experienced freight forwarder is the best bet for your business. Today, there are many modes of transport, commodities, regulations and origin/destinations. All freight forwarders cannot handle all of these combinations. For this reason, ask potential forwarders what experience they have in your type of shipment. Usually they should be able to bring up an example of a similar shipment they handled for someone else.
- Industry & Regulator Approved: A credible freight forwarder is approved to operate by the Kenya customs body i.e. Kenya Revenue Authority (KRA) and is a member of reputable industry associations such as Kenya Federation of Freight Forwarders (KIFWA) and World Cargo Alliance (WCA). Joining reputable freight forwarding associations requires financial strength, operational efficiency, integrity and many other requirements. If a freight forwarder is a member of a reputable association, the chances of them handling your shipment with care and diligence is higher than if they were not a member. It also shows they have financial strength because there are only a handful of legitimate, quality freight forwarding networks that really vets their members.
- Membership to Global networks: The freight forwarders membership to global networks such as World Cargo Alliance (WCA) works to the advantage of the shipper or cargo owner as they will enjoy the advantage of accessing global markets through a single forwarder and eliminate the need of dealing with multiple vendors with is usually tiring and confusing.
Membership to global networks is key for various shipments and also if there are unforeseen issues in the overseas country such as a port strike, customs issue or other delay. The global partner agent can help smooth out many of these issues.
- Notable achievements and successes: A credible freight forwarder will have notable achievements and successes that are recognized within the industry and beyond. Most credible freight forwarders will be awarded for outstanding performance in the course of doing business.
- One ear to the ground: A credible freight forwarder is well versed on industry operations and is always stays up-to-date with policy and regulation changes that would affect his customers’ shipments. The freight forwarder will also proactively prompt his customers should a new regulation affect his shipment and guide accordingly on compliance with new regulations.
- Experience In Your Industry: A freight forwarder with experience in your specific industry is the best logistics partner. He will proactively advice his customer on preparing the right documentation and payment of the correct taxes thus avoid unnecessary delays.
- Accessibility: A good freight forwarder is easily accessible and responsive through a number of channels. The forwarder operates 24/7/365, providing convenience particularly to those handling shipments in different time zones. A delayed reply could easily result in payment of unnecessary penalties.
- A licenced Approved Economic Operator. A freight forwarder who is a licensed AEO enjoys a number of advantages that benefit his customer. An AEO freight forwarder will experience shorter cargo clearance times as well as fewer delays arising from cargo verification periods. This means, he is able to deliver the cargo to you at the shortest time period as compared to a non AEO freight forwarder.
- ‘Source to doorstep capabilities’: a credible freight forwarder is able to offer his customers’ supplementary logistics services e.g. Transport, warehouse, container freight station etc. A credible freight forwarder offers his customer’s total logistics solutions and spares the customer the risk and headache of exposure to multiple vendors for the additional logistics services required.
- Infrastructure: A credible freight forwarder has invested in sufficient infrastructure to support service delivery. This includes an office, communication equipment and a motivated work force. A forwarder who has invested in running his business is bound to take his business more seriously and easily accessed. A “briefcase” with no permanent address is a risk as he can ‘disappear’ when your cargo is in the course of clearance thus leading to cargo losses.
- Communication – a credible freight forwarder provides regular update in the course of handling your cargo. The freight forwarder is available on various channels and provides accurate and up to date status on customer shipment. The update in writing and verbally
With 30 years’ experience in various industries Siginon Global Logistics is your best bet in logistics in Kenya. Our presence in Mombasa, Nairobi and Dar es Salaam, Tanzania ensure that our customers experience world class service in customs clearance, warehousing, transport, air freight and sea freight. Siginon Global logistics is a member of World Cargo Alliance (WCA) and is able to access over 3000 global forwarders to collect and deliver cargo from almost any part of the world. Siginon Global Logistics is your cost effective, professional, credible and experienced logistics partner.
March 2, 2016
The Standard Gauge Railway (SGR) is a flag ship project under Kenya’s Vision 2030 development blueprint that seeks to simplify passenger and cargo transport cost effectively across the Mombasa – Malaba. The Kes. 327B railway line is designed to carry 22 million tonnes a year of cargo (approximately 40% of the Mombasa Port throughput) by 2035. The freight trains will have a capacity of 216 containers ferried at an average speed of 80 km/h. The SGR project is proposed to connect Kenya, Uganda, Rwanda and South Sudan. Ultimately, the SGR will inch Kenya closer to the vision’s ambition to make Kenya a middle class economy by 2030. The construction of the 473 kilometres line commenced in October 2013, and latest reports from the Ministry of Transport determine that the railway will be ready for use ahead of its December 2017 deadline.
Contrary to public opinion, the SGR will provide a much needed boost to road transporters in Kenya. The SGR is predicted to enhance efficiency and reduce the time and cost of cargo movement from the busy Mombasa Port. The global standard for cargo freight logistics is 60-40 in favor of rail. However, due to current inefficiencies in the rail system, Kenya is yet to achieve this standard. Job Kemboi, the General Manager in Siginon Global Logistics Tanzania says “The SGR is not a threat but a complement to road transporters. The SGR is most suitable to handle containers destined to Kenya, Uganda, Rwanda and Burundi.”
Currently, the Kenyan transport industry consists of approximately 15,000 trucks that are at times over whelmed by the amount of cargo discharged at the port of Mombasa for onward road transportation to serve customers along the Northern corridor and the hinterland. The SGR will provide an advantage of fast and efficient cargo movement. Along the Mombasa –Nairobi stretch, the SGR will move cargo in 8 hours from destination, a trip that would often take 2 – 3 days if one was using the current rail network. This will lead to the reduction in the cost of transport and ultimately reduce the cost of doing business in Kenya. In addition, with faster movement of goods, there is enhanced cargo security due to reduced handling and exposure while on transit. Job Kemboi adds; “Once the new railway line is in place, it will offer a secure, cost effective and efficient cargo solutions. For us, we will be delighted to ensure our customers benefit from SGR as an alternative to their logistics needs.
With the reduction of trucks plying the Mombasa – Naivasha highway, more trucks will focus on serving customers in the hinterland, away from the Northern Corridor, this will likely result in reduced traffic jams particularly on the Mombasa – Nairobi stretch, which is often been blamed on cargo trucks in the course of business. Siginon Global Logistics is one company that has recently acquired over 100 trucks due to the increased demand for cargo transportation. The additional trucks are a testament to the confidence that truck operators have in their business despite the SGR commissioning. Job adds “We have a number of customers who are located inland, away from the Northern corridor who will still need road transportation. We are confident that the SGR is a partner and not a threat to road transporters.”
It is envisioned that the SGR comes with additional benefits not only for transporters but the regions macro economy. For instance, due to the various stations established along the Northern corridor myriad of employment opportunities will arise with the stations’ construction to running and maintenance. Areas that are positioned around these stations will likely see the development if towns leading to growth of economies and infrastructure development
Job concludes, “Once the new railway line is ready, we expect to have cost effective and more efficient movement of goods and services along the northern corridor. It’s not really about us but about the customer and we are in a position to offer all options.”
October 2, 2015
Adoption of technology has greatly enhanced the competitive advantage of most organizations. The multiple technology options available deliver customer satisfaction through offering the customer convenience, quick responses, customized solutions and efficient reporting of important information without the need for major human intervention.
The move towards adoption of technology move has seen players in the Kenyan logistics industry embrace digital technology to boost their customers’ experience and build customer loyalty. In Mombasa, Chris Kanoti of Siginon CFS, adds that “We have put in place a broad spectrum of technology that will create a positive customer experience while they’re using our services”. To support efficiency in cargo clearance, Siginon CFS provides her customers with free Wi-Fi services. This enables the customer to access free internet connection through various devices and access documentation required in the clearance of their cargo from the port of Mombasa. Kanoti states; “We realized that our customers need to access the internet frequently to access and lodge the various clearance documents for their cargo. To assist in making the process more efficient, we provided our customers free Wi-Fi to eliminate the need for them to step out to access the single window system in cyber cafés away from the CFS and make our premises a convenient cargo clearance CFS.”
Container Freight Stations (CFS) have also adopted the CFS Pro system to assist in handling containers aboard the various vessels while they’re docked at Mombasa port. The system shares vessel schedules and cargo manifests to the customer via the CFS system. The system facilitates efficient cargo clearance by proactively providing the customer with the cargo manifests thus allowing them to prepare all documentation for clearance and avoid storage charges. Chris asserts; “We are focused on providing our customers with a stress free cargo clearance experience, thus we are proactively providing all the vessel and cargo information so that they are spared the various storage and demurrage penalties resulting from delays in clearance which are sometimes caused by getting this critical information on time.”
The Single Window system launched by Kentrade, an arm of the Kenya government that is mandated to facilitate cross border trade and enhance Kenya’s global competitiveness is also web based. Job Kemboi, the Siginon Global Logistics Divisional Manager states; “The single window system has greatly enhanced the efficiency of clearing and transporting of shipments from the port of Mombasa to the local market as well as those destined for transit. Operationally, it has improved the turnaround times for trucks as there are no delays at the Kenya –Uganda Malaba border as duties are paid up front and exit note issued prior to departure. The reduction in delays has enabled us to make more trips as well as reduced congestion at the border posts and the port”. The Single Window System is an outcome of Kenya’s Vision2030 development blue print that seeks to enhance international trade through encouraging efficiency at the port of Mombasa. Job concludes, “Our customers have also enjoyed the benefits of the Single Window as they are guaranteed their cargo will arrive as expected due without the border delays. This has helped them plan their production schedules as well as make ‘just in time’ orders”.
In line with current market trends, mobile payments have been adopted at both Siginon Global Logistics and Siginon CFS to enable cash less payments for the logistics transactions. Job states “We are accepting mobile payments for fees due to be paid to Siginon. We’ve realized that most customers avoid carrying cash preferring the mobile payment options. Mobile phone payments have proven to be safe and secure and convenient for our customers. We are also paying our drivers allowances through mobile money as they make their various trips.”
The Kenya government has taken conscious steps to embrace technology through the E-government initiative that involves employing ICT to transform both back end and front end government processes in service delivery. This has encouraged players across the various industries to equally incorporate technology in their operations so as to achieve efficiency, offer the market convenience and achieve global competitiveness.
August 18, 2015
The Kenya air cargo industry stands to experience tremendous growth should direct US – Kenya flights get commissioned. The flights would offer an advantage over the current connecting flights to various airport hubs all over the globe. Coming fast against the back drop of the recently concluded Global Entrepreneurship Summit 2015 (GES 2015) there were many expectations from the United States goody bag issued by the President Barack Obama, amongst these expectations were the commissioning of the direct flights.
Jared Oswago, the Divisional Manager at Siginon Aviation adds; “In Africa currently, there are direct flights between Senegal and South Africa to various US cities. Bringing these US – Kenya direct flights is bound to attract other airlines and more business to Kenya and the region. It is likely that a direct US –Nairobi flight is likely to operate between Nairobi and New York or Washington DC.”.
Kenya is largely importing medical engineering equipment, industrial products, air craft engines and chemicals while largely exports textiles and perishable products such as flowers and vegetables. The export of textiles has largely been supported under the African Growth and Opportunity Act (AGOA) initiative through the various Export Processing Zones (EPZ). Jared adds; “Currently, we’re exporting cargo to the US through various connecting flights. The multiple connections make the trip longer and compromises on on-time performance as there may be connection delays, missed connections handling in the hubs exposes the cargo to mishandling which at times may reduce or degrade the cargo quality. The cases of pilferage are also prone in the connections.”
Security concerns have also made it imperative for the players to adopt heightened security measures in their operations as well as evolve into a ‘know your customer’ regime. This involves tracing the cargo right from its source. In the case of perishables cargo this involves interrogating farm produce from where it’s grown or the origin of the meats up to where it reaches the final customer. As a response to market demands to ensure high security levels in air cargo operations Siginon Aviation recently launched operations in its new USD 10 million air cargo terminal in Jomo Kenyatta International Airport (JKIA), Nairobi. The state of the art terminal meets global security standards and has been tailor made to satisfy customer air cargo demands. These stringent security conditions ensure that the cargo ferried from the source up to the final consumer remain safe and fit for consumption. Jared asserts “Our new operation at Siginon Aviation has adopted the latest security technology such as cargo screening machines and located on the airport apron to ensure high security. Our staff undergoes rigorous safety and security training to enable them to professionally handle flights bearing various cargo including those considered dangerous goods or DGR. We have also received various international certifications such as RA3 set by the European Union and IATA Safety Audit for Ground Operators (ISAGO) to highlight our compliance to global safety and security standards in our operations.” Siginon Aviation has been passed to handle various flights plying the US – Nairobi route.
The Siginon Aviation terminal further has placed physical barriers such as manned gates and 24/7 CCTV surveillance as well as access control to ensure the warehouses remain ‘sterile’ and restricts access to only authorized individuals and vehicles. These measures have served as a deterrent to criminal elements and have boosted customer confidence in the services offered.
The Siginon Aviation perishables centre comprises of a unique express corridor that maintains perishable cargo in the specified cool temperatures up to a few minutes prior to loading on to the air craft. Jared concludes “This is a unique service we offer as most of our competitors would expose the cargo to the unfriendly temperatures while awaiting loading onto the air craft. However, our express corridors ensure that the temperatures are maintained as specified and preserve the quality and condition of the perishable cargo until it is loaded in the aircraft”. The express cool corridor can take up to 100 units of palletized cargo and assures her customers that the cargo is maintained in the required
Siginon Aviation forms part of the other 4 air cargo terminals available in Jomo Kenyatta International Airport. Siginon also has another air cargo terminal located at the Eldoret International Airport.
July 31, 2015
By Meshack Kipturgo,
An efficient logistics chain remains one of the key tools for competitive advantage to be exploited in a growing economy such as that of Kenya. Every thriving economy relies on a backbone of an efficient supply chain that nurtures global trade and embraces global competitiveness.
Efficient logistics is a key contributor to a country’s global competitiveness. Various countries have gained trade muscle and boosted their economies by fully taking advantage and effectively controlling the supply chain to ensure that it nurtures and positively impacts global trade. For instance, Singapore despite being a small country boasts of being the most efficient country in logistics it is no wonder that in the 2011 World Bank Ease of Doing Business Index Singapore was ranked as the best country in the world to do business. Japan has cut its niche as the manufacturer of popular automobiles and electronics globally. Japan is home to 6 of the top 20 largest vehicle manufacturers, with Toyota being the highest sold vehicle globally.
Currently, Kenya in search of diversity amongst her trade partners has set her sights on the east. Asia is the fastest growing economic region and the largest continental economy by Gross Domestic Product (GDP) in the world. China is the largest economy in Asia and the second largest economy in the world. In addition, Asia is the continent with the highest population with China carrying over 1 billion inhabitants. The potential trade and impact into the Kenyan economy as a result of this new trade partnership is immense. However, the question begs, does Kenya have the capacity to reap the fruits of doing business with this trade giant?
On the Kenyan logistics front, key concerns include existence of the non-tariff barriers, state of infrastructure, security and the rising cost of fuel among others. In Kenya, the high cost of goods is to a large extent attributed purely to logistics. These are critical concerns that have directly impacted the cost of doing business in Kenya and threatened Kenya’s position as the regional business hub in East Africa. Neighboring countries such as Tanzania, Uganda and Rwanda have identified this gap as well and they are working on overdrive to sway investors into their markets by embarking on great infrastructural developments such as the construction of the USD 11B Bagamoyo Port, USD 164 new airport terminal in Tanzania as well as the Tanga-Musoma railway while Rwanda is pursuing investment in the air cargo industry including an airport free trade zone. All these initiatives are set to shift trade flow away from Kenya. Surely, Kenya should not be caught napping.
Thankfully, there are steps that the government has taken to expand our current infrastructure as well as regional partnerships that would smoothen trade amongst the East African community partners. Notably, the recently launched single window system, standard gauge railway, infrastructure development and expansion particularly at the port of Mombasa and the JKIA airport. However, to effectively tackle the current and emerging demands from our international markets the Kenya market needs to provide a safe and convenient environment for doing business to its potential investors. Some interventions include; building a dual carriageway on the Northern Corridor beginning from Mombasa all the way to the Malaba border. Partner countries in Rwanda and Uganda should also be convinced to extend the same dual carriage way. At the same time, there’s need to fast track the construction of the free port to enable Kenya to meet the demands of the growing markets. An airport free trade zone would also greatly boost our air cargo logistics. Regionally, it is prudent that the East African countries partner and negotiate with the global markets as one. Going it alone would overwhelm or literally exhaust the limited resources among these countries.
In the meantime, tackling the current trade hindrances while planning in the long term for business growth will go a long way into attracting more investments in Kenya as well as for East Africa as a vibrant trading region. In the longer term, innovative ideas should be considered for serve Kenya’s traditional markets from the west and the Asian markets.
Meshack Kipturgo is the Managing Director of Siginon Group, a source to doorstep logistics provider offering transport, warehousing, customs clearance, ground handling and container freight station based in Kenya, Uganda and Tanzania. Meshack also serves as the Chairman, Container Freight Station Association (CFSA) and Executive director in Shippers Council of East Africa.
June 4, 2015
Global terrorism has now more than ever more created an urgent need for more stringent security measures to avert this threat. Players in the cargo industry are now taking proactive steps to seal security loop holes in their operations by adopting systems and processes that hinder the chances of terror activity in the cargo they handle and within their premises. Moses Wahome, the Siginon Aviation Divisional Manager states “Security is a supply chain issue. The cargo vigilance has extended to verification of the cargo source. For instance, in the case of flowers we want to verify the cargo right from the farm through to the airline and onto its final destination so as to fully secure the cargo chain. The default action is more on pre-empting and preventing security lapses than on curative responses. There’s a lot more profiling moving players to a ‘known shipper regime’ with a preference of individuals who are regulated agents.”
In as much as the threat to security remains vivid today, cargo handlers are more preoccupied with mitigating the myriad of risks involved in their daily operations. The impact of this pre occupation has led most companies to invest more in security related manning and equipment such as access controls, thorough cargo screening and detection of explosives. David Kiptum, Siginon Aviation Safety and Security Manager asserts “Safety and security remain the focus of cargo processing. We are aware of the threats and we are putting in place measures that are commensurate amongst our staff and also we are acquiring supporting security equipment”.
Siginon Aviation, a ground handler recently opened a new USD 10 million cargo terminal in Nairobi’s Jomo Kenyatta International Airport (JKIA). The state of the art facility boasts of high standards in security to ensure high standards of safety and security in their operations. Moses asserts that security has become an overriding factor in service delivery; “With this new terminal, security is greatly improved. We regularly conduct security risk assessments so as to also tighten all loopholes.” This security awareness has extended to regulators and airline customers who frequently audit ground handlers to gauge the level of security preparedness. David adds; “The JKIA stakeholders have heightened their security awareness to ensure the sanctity of their cargo operation. This is reinforced through elaborate security equipment and rigorous staff training programs that have been put in place to ensure vigilance on security matters. The general security awareness has greatly contributed to a reduction in security incidences” The Siginon facility is equipped with high end security equipment including x-ray machines, advanced CCTV systems and explosives detecting equipment. Operationally, the Siginon staff undergo regular security training, conduct 100% cargo screening including placing strict controls on the access to the airport airside adjacent to the Siginon facility. David adds; “Customer confidence and the general business environment has also improved following the high levels of cargo security.”
David concludes “Terrorism is a global problem that is being collectively handled by all stakeholders. All the players at JKIA have taken the responsibility to play their role in tackling this issue. We are having frequent engagements comprising of the regulated agents, law enforcement agencies, airport operators, catering, airlines, Civil Authorities and other government agencies and regular information sharing to enhance our operating environment and nurture business.”
May 15, 2015
The growing East African economy has drawn interest from various multi nationals keen on taking a piece of the infrastructure development pie. Infrastructure wise, the Kenyan budget is the highest within the East Africa region at USD 40 billion which is approximately three times its annual budget. Since 2002, the Kenyan government has taken up ambitious infrastructure projects which in 2008 culminated in the launch of the Kenya Vision 2030 blueprint which seeks to position Kenya as a middle income country by the year 2030. Some of the projects in the Vision 2030 include creation of highways, cities, port expansion, exploiting of oil and gas all geared to boost and grow the Kenyan economy.
Kenya has looked to the Far East to establish infrastructure development partnerships. China in particular has played a great role in most of the Kenya infrastructure projects through funding as well as in providing expertise and technology transfer. Most notable was the construction of the Thika super highway that was completed in 2012. The 50 kilometre-long highway was funded by the Africa Development Bank (AfDB) and constructed by 3 Chinese firms. The 8 lane highway was built at a cost of Kes. 27 Billion (approx. US$ 330,000,000).
Infrastructure construction and refurbishment calls for importation of a myriad of equipment from key markets considered experts or successful in this area. In Kenya’s case, China was identified as being a key expert in infrastructure development. The logistics of handling the equipment and implements related to infrastructure projects is often referred to as project cargo handling. The handling process largely comprises of clearing and transportation of the infrastructure large, odd sized, heavy, high value or critical goods.Such projects are focused on completion to an agreed standard, contracted time and cost. As such, the logistics around project cargo importation and transportation must ensure that these conditions are adhered to. Lawrence Mangarunyi the Siginon Global Logistics, Divisional Manager adds; “Infrastructure projects are expensive. Project cargo logistics is very sensitive, to the extent that delays in cargo clearance, storage charges or losses cannot be tolerated. All efforts are focused on ensuring that customer’s deadlines are met. It is therefore critical that there is advanced planning and regular communication on all logistics operations. This is through a proactive effort between the customer, the various approval or verification authorities and the logistics provider. The success of a project operation requires that we work as partners with our customers.”
Lawrence further asserts “Due to the nature of imports from various global markets. Siginon Global Logistics is a member of World Cargo Alliance (WCA) whose membership of over 5000 global freight forwarders enables us to collect the cargo from anywhere around the globe and deliver it right to the project site in a safe, cost effective and timely manner.”
As such, various complementing industry sectors have been impacted by this move. The logistics industry in Kenya has seen a spike in business boosted by the increase of imports of project related cargo by air or through sea. Siginon Group, Managing Director, Meshack Kipturgo asserts that the explosion in the project cargo has called for a re-alignment amongst the logistics players due to the opportunity present in the handling of project cargo. For instance, in the Standard Gauge Railway (SGR) project, there is a lot of construction equipment and implements being imported into Kenya to facilitate the construction. Most of the imports are oversized cargo that required specialized equipment as well as well trained personnel to handle the clearing and transportation operations as well as support the customer communication process. Meshack adds “Project Cargo is a key segment that has tremendously boosted the Kenyan logistics industry. To satisfy the needs of our customers in project related business, we have in turn invested heavily in equipment, human resource and systems that are geared to efficiently handle project related cargo.”
Over the years, Siginon has supported a number of Kenyan projects with cargo logistics such as:
- The Sondu Miriu Hydro Power Project between the years 1998 – 2007.
- The Turkwell Gorge Hydro Power Project in 1987 – 1991.
- The Bachuma to Mtito Andei Road project in the years 2000 – 2002.
- Kiambere Water Dam: 1994 – 1997.
- China Petroleum Pipeline Bureau- Nairobi – Eldoret Pipeline: 2010 – 2013.
- Konoicke Water Project – Kapsabet, Narok and Embu: 2010 – 2013