Kenya's logistics sector aims to use technology to improve services

Kenya's logistics sector plays a crucial role in the country's economy, accounting for around 9% of the GDP. The sector is strategically positioned in East Africa, facilitating trade and commerce in the region. However, to sustain its growth trajectory and remain competitive, there is a pressing need to enhance efficiency through the adoption of technology. Peter Echessah, the CEO of SafeTrack, sheds light on the trends, opportunities, and challenges in the logistics sector. Echessah emphasizes the importance of leveraging technology to streamline operations and boost productivity. He points out that Kenya's central location makes it a key gateway for goods entering the East African hinterland. To maintain this edge, the sector must focus on improving the movement of goods through the region, a feat that can be achieved by embracing technological innovations. One of the key challenges facing the sector is the need to reduce the number of trucks on the road. Echessah explains that historically, trucks carrying cargo to neighboring countries like Uganda were not allowed to transport goods back, resulting in empty return trips. This inefficiency led to a surplus of trucks on the roads. However, with the introduction of electronic cargo tracking systems, regulations have been modified to allow trucks to carry cargo in both directions, cutting down on unnecessary trips and reducing congestion. SafeTrack is pioneering the concept of a freight exchange platform, where cargo owners can easily connect with pre-vetted transporters, eliminating the need to search for logistics providers manually. Moreover, Echessah underscores the significance of policy reforms in enhancing the logistics sector's efficiency. He highlights the outdated regulations that have posed challenges to the industry, such as cumbersome licensing requirements and restrictions on carrying transit cargo back through Kenya. While some progress has been made in easing these restrictions, there is still room for improvement in streamlining policies to create a more conducive business environment. Despite its potential for growth, the logistics sector in Kenya faces capacity constraints, particularly in warehousing infrastructure. Echessah notes that investing in world-class warehousing facilities is hindered by licensing hurdles and security concerns. The sector grapples with the need for stringent enforcement of regulations and standards to ensure the safety and efficiency of warehouse operations. Collaboration with existing warehouse operators to utilize idle space effectively presents a viable solution to address the capacity crunch. In conclusion, the future of Kenya's logistics sector lies in its ability to embrace technology-driven solutions and overcome regulatory barriers. By enhancing operational efficiency, reducing truck congestion, and expanding warehousing capacity, the sector can position itself as a key player in regional trade and commerce. As the industry evolves, stakeholders must prioritize innovation and collaboration to drive sustainable growth and competitiveness.