Handling
Lifting of Cargo

Spedag Interfreight (K) Limited

NEW INTERMODAL FREIGHT TRANSFER FACILTY PROJECT AT THE MALABA RAILWAY YARD ON THE UGANDA/KENYA BORDER

Introduction

Spedag Interfreight Kenya (SPIF) was awarded a grant by the Logistics Innovation for Trade (LIFT) Challenge Fund in September 2015 to develop the current Malaba Railway Yard into an intermodal cargo transfer facility that will be capable of handling, storing and consolidating cargo from rail to road and vice versa. This will result in reduced logistics costs as the facility will enhance cross-loading services to East African Community (EAC) enterprises using the Northern Corridor route – e.g. cargo will be transported by rail from the port of Mombasa to Malaba where it will then be transferred onto trucks for onward transportation by road to other final destination locations within East Africa. At the same time, goods from different East African countries can be transported by road to the Malaba facility before being transferred onto trains and transported by rail to Mombasa. This will broaden the transport and logistics options that are currently available to shippers, thereby introducing more competition and reducing logistics costs and improving efficiencies.

Spedag Interfreight Kenya (SPIF) was awarded a grant by the Logistics Innovation for Trade (LIFT) Challenge Fund in September 2015 to develop the current Malaba Railway Yard into an intermodal cargo transfer facility that will be capable of handling, storing and consolidating cargo from rail to road and vice versa. This will result in reduced logistics costs as the facility will enhance cross-loading services to East African Community (EAC) enterprises using the Northern Corridor route – e.g. cargo will be transported by rail from the port of Mombasa to Malaba where it will then be transferred onto trucks for onward transportation by road to other final destination locations within East Africa. At the same time, goods from different East African countries can be transported by road to the Malaba facility before being transferred onto trains and transported by rail to Mombasa. This will broaden the transport and logistics options that are currently available to shippers, thereby introducing more competition and reducing logistics costs and improving efficiencies.

Facility

The project implementation is structured into 5 milestones:

  • Milestone 1 – civil and foundation works completed
  • Milestone 2 – equipment/machinery (reach stacker and fork lift) commissioned and operational at the facility
  • Milestone 3 – fully functional, secure and easily accessible 2,000 teu stacking capacity intermodal facility established
  • Milestone 4 – an increase in containers passing through the Malaba border to an average of 500 teus per month
  • Milestone 5 – 20% reduction in transit time from Mombasa to Nimule

Project Objectives

  • The project’s aim is to expand the freight handling capacity at the border post in order to increase productivity to match improvements in pipeline railway capacity and address the requirements of the oil and gas industry. The improved infrastructure will support the recently introduced single window customs clearance processes for transit cargos, which was designed to facilitate trade in the East African Community. Further benefits from this initiative include moving more freight from road onto rail thereby reducing pressure on the road network.project’s aim is to build an automated service to connect Alistair Group to 100+ SMEs. This will benefit SMEs by providing them access to high-value cargo road transport market resulting in an increase in access to the transportation market for SME transporters by efficiently allocating them cargo through the Alistair+ application and operational efficiencies by eliminating middlemen traders’ / freight forwarders to reduce transport time and costs. These will also improve efficiencies for the road transport industry.

  • The project will also provide an opportunity for small and medium trucking enterprises (SMEs) to compete in the logistics sector. SMEs are currently disadvantaged due to the fact that they are unable to compete effectively with the established transporters on longer distances exceeding 500km. Due to the proposed trans-loading facility, SMEs will have a shorter distance to provide short-haul capacity to and from the facility therefore improving their ability to compete for work.

  • The proposed facility will improve the volume of exports in general and especially minerals such as vermiculite, sourced from the Mbale region in Uganda which is about 30km from Malaba, with a potential annual capacity of 200,000 tons. Meanwhile, other exports like cotton, coffee, cocoa beans and timber will also be handled through the facility.

  • The effects of non-tariff barriers (NTB) will be reduced along the Northern Corridor, e.g. delays at weigh bridges and traffic congestion, by promoting a combined rail and road option which is only possible with the availability of the cross-loading services offered by the intermodal cargo transfer facility.

Conclusion

The project idea is innovative as it will see the establishment of an intermodal facility on one of the key areas of the Northern Corridor.

“In today’s global economy, intermodal facilities have become increasingly popular as a method of increasing efficiency and decreasing costs across the entire spectrum of supply chain operations. This said, SPIF’s proposed intermodal facility at Malaba Railway Yard aims to bring transport and logistics handling operations within the East African Region into line with best practices in the global economy.”

– Heinz Mueller, Resident Managing Director Spedag Interfreight.