The Kenya Standard Gauge Railway (SGR) launched in 2017 has introduced an additional efficient cargo movement option from the Port of Mombasa into Nairobi and beyond the Kenyan borders. The government sponsored rail solution has been hailed and feared by various logistics players due to the impact this development is likely to have on road transporters in Kenya. However, Siginon Group, a transport and logistics company has embraced the SGR solution whole heartedly and further, through Siginon Global Logistics – its transport arm, invested in an additional 22 trucks to boost its current fleet in Kenya. The trucks comprise of prime movers with drop side trailers to satisfy customer demands for an efficient logistics partner in moving cargo inland. The trucks, purchased at a cost of Kes. 140 million will complement cargo movement that requires last mile logistics within Nairobi and other inland locations as well as on transit across the Kenyan borders to regional destinations within East Africa and the Great Lakes region such as Kampala in Uganda, South Sudan and others.

Job Kemboi the General Manager adds, “Shippers moving cargo on the SGR require a road transporter to move their cargo from the various ICDs to the destined inland locations be it warehouses, factories or homes. As such, transporters still have a role to play in complementing the SGR on the last mile. We have therefore boosted and aligned our transport services to meet this need satisfactorily.” The transport arm is further relocating its transport yard to a new 5 acre location in Mariakani to strategically position and ensure efficient fleet movement. Job Kemboi adds, “As Siginon Group, we are already using the SGR to move containers destined for inland and transit locations. In addition, we have engaged shipping lines for partnerships to ensure smooth and safe cargo delivery from SGR, via ICD up to the doorstep of the consignee.

Job concludes;” The Standard Gauge Railway (SGR) has greatly complimented cargo movement for road transporters. As such, an efficient trucking fleet will play a major role in ensuring customer satisfaction; facilitate last mile and regional cargo logistics. In Siginon, we will continue to scope the market for opportunities to exploit all the opportunities that come with SGR”

The 2018 United Nations Conference on the Trade and Development (UNCTAD) Business-to-Consumer E-commerce Index ranked Kenya in 7th position in ecommerce uptake in Africa and position 85th globally. Leading the Africa pack is Mauritius, Nigeria, South Africa, Tunisia, Morocco and Ghana respectively. Globally, Netherlands took the lead having improved from a being placed 4th on the same in 2017. While Africa needs to boost Internet penetration to grow e-commerce, it also needs to get more of her existing Internet users to trust the online market for making purchases, secure servers, bank accounts, a clearly marked and mapped address system.
The UNCTAD report further estimates that that the B2C e-commerce market in Africa is worth about $ 5.7 billion in 2017, which corresponds to less than 0.5% of GDP, far below the global average of over 4%. However, the uptake of eCommerce in Africa has seen online shoppers surge at an annual rate of 18% which is way above the global rate of 12%. There is no doubt that e commerce is fast emerging as a new frontier in Africa and in the global market. As eCommerce continues to grow, retailers need to expand their distribution networks, build more fulfillment centers, and leverage more on 3PL partners. At the same time, online retailers must place greater focus on conveniently locating their fulfillment centers close to their markets to facilitate faster deliveries.

Reliable and solid logistics and supply chain interventions are the heart of successful ecommerce. This will ensure that the sector thrives and sufficiently satisfies customer demands for availability of goods purchased, timely deliveries and safe and secure deliveries exempt from breakages, bends or losses as well as favorable return policies. In Kenya, ecommerce players heavily rely on third parties who provide storage and shipping services. These services can build or break the customer experience as they make their purchases online. Meshack Kipturgo, Siginon Group’s Managing Director states, “The eCommerce sector is a new frontier in business that calls for close synergies between the ecommerce players and back end logistics to ensure a positive customer experience from that first click to eventual delivery.”

Logistics players play a critical role in supporting the ecommerce process by shipping, managing stock levels as well as making final deliveries to end destinations. The inventory must therefore be secure, and the services offered must be efficiently and safely delivered yet offer best value for money to ensure the customer appreciates the value of goods bought. Meshack adds, “A solid and long-term partnership between logistics players and ecommerce partnerships will ensure growth and expansion for both parties at the end of it all, the e-customer emerges the winner.”

Several systems have been adopted to integrate ecommerce retailers and logistics entities to allow for a seamless process. Today, warehouse management systems have been adopted that enable inventory owners to view their stocks on demand. For ecommerce players, these systems allow them to view available stocks, guide re order decisions as well as ease the stock taking process. Logistics players are also able to receive online instructions of goods that need to be stocked out as well as received and report them same via bar code systems and other stock movement detectors. It is also an industry best practice to provide the tracking numbers to customers in their confirmation email so they can keep track of where their package is.
Amazon, the global ecommerce giant, has evolved over time since its inception to have one of the most advanced fulfillment networks in the world. The Amazon fulfillment centers provide storage as well as the subsequent logistics of picking, packing, shipping, and providing customer service for the various products. Meshack concludes; “The opportunities for ecommerce retailers are growing steadily particularly with younger shoppers who are more tech and internet savvy. Logistics companies have also positioned themselves to tap into the opportunities that come with ecommerce to satisfy the needs of the ecommerce customer”. Ecommerce in Kenya presents a new frontier in doing business and will no doubt open more opportunities for trade in Kenya. More and more logistics companies must adopt technology to facilitate their processes to facilitate the demands of this new market.

Real estate players have identified warehouses as a growing property class in Sub Saharan Africa. Unfortunately, the demand for warehouses outweighs the availability for the space required to satisfy consumers. The consumers today requires a modern warehouse space that is built to high technical specifications to support modern retailing, distribution and manufacturing practices. In addition to availability of a modern warehouse amenities such as security, power, water, internet access, access roads; today’s customers is increasingly demanding warehouses that enable convenient and efficient inventory management coupled with optimal use of warehouse space.

As such, Siginon Global Logistics has installed a state of the art system to streamline operations in its warehousing business. The new system enhances warehousing efficiency as well as gives customers the convenience to view their inventory remotely so long as there’s internet connection. The customers, through internet connected gadgets, will be able to remotely create orders, receive updates on stock movement and accurately locate inventory within the Siginon warehouse.

The cloud based system was installed at the Siginon Global Logistics, Nairobi warehouses in January 2018 and pre tested by a South African technology firm that has done similar installations across the globe. The 24 hour system will cover all inventories at the warehouses and comes with minimal pressure on the internet bandwidth. Winstone Akweyu, the Siginon Global Logistics Operations Manager adds, “The new warehouse management system has been driven by Siginon’s needed for continuous improvement, value addition as well as aligning the warehousing business with technological improvements in the logistics landscape.”

The Siginon warehousing customer today can today view their stock reports off site without the need for being physically present for a physical and usually tiring and time consuming stock take. This then provides the customer with the agility to make inventory decisions such as re-ordering, forecasting as well as maintaining just-in-time inventory to manage operational costs from any location.

Operationally, the system Siginon will provide great ease in generation of customer reports by interested as well as ease the billing process with an assurance of accuracy.

By Meshack Kipturgo

While Kenya’s attention has been on the electioneering period, there have been a series of exciting acquisitions in the fresh produce industry that are gradually shaping the logistics industry particularly in the airfreight sector.

In the recent months, international logistics firms have snapped up Kenyan operators with a view to consolidate the gains and potential of the local perishables industry. These acquisitions are not only an endorsement by the international giants on the attractiveness and potential of the Kenya logistics industry but they will also shape the logistics industry; with benefits that will soon trickle down to all stakeholders.

The acquisitions of the local freight forwarders some of whom have held strong influence in Kenya’s fresh produce forwarding will open doors for the global firms to access the local fresh produce markets whose global demand continues to grow particularly in the European Union which has been a key market for fresh fruits, flowers, vegetables, all of which are sourced locally.

The recent acquisitions have also given the global players access to the Kenyan highly demanded market and in the process filled gaps in their logistics chains. With the backing of a large war chest backed by even stronger economies, we can speculate that there will be more acquisitions of local fresh produce freight forwarders, further consolidating the Kenyan market.

Tapping into the Kenyan market will also increase the scope of operations as the global freight forwarders will now have additional muscle to better negotiate for rates with airlines, warehouses and other related service providers and in turn drive down their costs of doing business, a boon for these transport and logistics firms. It is important to note that airlines, for one, are more willing to offer these global forwarders better rates than smaller competitors as the former can assure consistent and large volumes.

Due to the sensitivities of perishables exporting, exporters use more established companies that have world-class infrastructure that will ensure their produces fetches a premium price as buyers as well as assures the quality, freshness, well-packaged shipments delivered in a timely manner. As such, the Kenyan horticultural farmer stands to benefit by working with a global logistics company that has filled all the gaps in its value chain with chance to effectively market their produce in the key markets.

To the simple eye, the acquisitions taking place may appear to be a threat to local companies that have tirelessly worked over the years to meet international standards and access the fresh produce shipment market. However, this is far from it, these glo-cal (global and local) partnerships offer indigenous firms the opportunity to up their game to global standards and compete with global players.

At Siginon Group, we realized that as Kenya’s horticulture industry is growing, the tide will lift the ancillary fresh produce shipping industry to higher levels and this informed our decision to invest in Siginon Aviation’s Ksh1 billion cargo handling facility at Jomo Kenyatta International Airport (JKIA) in Nairobi as well as form partnerships with global cargo airlines serving key routes such as Europe, Middle East and Southern Africa to enable us to serve and effectively compete in these international markets.

Kenya is further set to soon commence direct flights to the US market following satisfying of statutory requirements for both countries. KQ should align itself to take first-mover advantage of this new route as the flagship airline for Kenya and freight shipments into the US. Direct US flights will create bigger market opportunities for the fresh produce airfreight industry in Kenya. The logistics players must therefore enhance their capacity to adequately serve exporters in these new markets as well as the traditional markets.

It is important to note that the wave of foreign and cash rich global companies buying up Kenyan firms is not limited to the fresh produce logistics market. The retail, banking, insurance and construction industries are also facing the same competition. However, the Kenyan companies in the aforementioned sectors continue to show great resilience in upping their game and thriving amidst strong competition. In fact in some areas such as banking and insurance, home grown brands command the lion’s share of the market. Local fresh produce shippers should also not be the exception by ceding the industry to global entrants. For the logistics industry to grow, we must show resilience, innovation and focus on meeting customer needs benchmarked globally.

The writer is the  Group Managing Director at Siginon Group.