Kenya is gearing up to start transporting cargo on the country’s new standard-gauge railway (SGR) network, signalling the beginning of a new era for East Africa’s freight logistics sector, which has been dominated by road hauliers.

Cargo transport trial runs on the SGR network start at the end of October, with full commercial operations expected to start in January.

Kenya has been operating passenger services only on the $3.8-billion SGR network, which was commissioned in June.

The transport of cargo on the SGR network comes soon after the Kenyan government terminated the 25-year concession granted to Rift Valley Railways (RVR), which operated a 1-m-gauge railway network.

The termination was due to RVR’s failure to meet the terms of the concession agreement, which included increasing cargo haulage on the 1-m-gauge network.

RVR was able to transport less than 5% of the cargo entering the port of Mombasa, with the balance transported by road hauliers.

According to Kenya’s Transport Minister, James Macharia, the commissioning of the SGR freight service will significantly improve cargo offtake from the port to inland Kenya and onwards to landlocked East African countries like Uganda, Rwanda, Burundi and South Sudan.

It will also decongest the road network. On average, 3 000 trucks currently transport cargo along the Northern Corridor, which stretches from Mombasa to Kampala, the Ugandan capital, and onwards to Kigali, in Rwanda, every day.

“Once we commission the freight service towards the end of the year, we anticipate significant improvement in cargo offtake from the port to the Nairobi inland container depot (ICD),” says Macharia.

He adds that the Kenyan government has completed the modernisation and expansion of the ICD, increasing its capacity to 405 000 twenty-foot equivalent units a year (TEU/y ) from 180 000 TEU/y.

The launch of the SGR freight service comes at a time when cargo traffic at the Mombasa port is on the rise, having increased from 26.7-million tons in 2015 to 27.3-million tons in 2016.

The SGR network is designed to transport 22-million tons of cargo a year, equivalent to 40% of the Mombasa port’s throughput.

Kenya Railways intends to operate four trains daily, each with a capacity of 4 000 t.

The Kenyan government has decided to set the cost of transporting a 40 ft container at $500, compared with the $900 it costs to transport the same container by road.

The commencement of cargo transport on the SGR network is expected to give Kenya’s Northern Corridor a competitive edge over Tanzania’s Central Corridor.

Tanzania and Kenya are vying for supremacy in import and export logistics in the East Africa region, with Kenya having a slight advantage.

Businesses in East Africa have been complaining that transport costs, which account for about 30% of the cost of goods and services, have been among the key impediments to industries flourishing in the region.