Remember Mtongwe Ferry Accident and Avoid a Re-enactment

Commuters Aboard the MV Kilindini Prepare to Disembark. CREDIT // BusinessDailyAfrica.com
Commuters Aboard the MV Kilindini Prepare to Disembark. CREDIT // BusinessDailyAfrica.com

If you’ve been to Mombasa, you must by now know about the ferry, which is somewhat synonymous with the town Likoni.

Driving along Mama Ngina drive AKA Light-House, you’ll have a glimpse of the congested ferry loaded with people, vehicles, bicycles and goods.

For some, the view means something else – remembrance of the ferry accident that took place in 1994.

Successive Governments promised  to build a bypass or provide new ferries.

Kenyans whole heartedly welcomed the announcement by Government of its advanced plans of importing two modern ferries from Turkey to operate at the Likoni Channel.

The introduction of the two ferries would decongest the Likoni Channel – main route for tourists moving from the North Coast and into the South to enjoy the touted white sandy beaches – through which about 5,000 vehicles and 330,000 people pass every day.

“Our team is in Turkey to inspect the progress and the construction which is complete for the first ferry. The shipment of MV Jambo will start early June and by July 27 we expect it to be at our premises. MV Safari will be delivered on November 3,” Bakari Gowa, MD for Kenya Ferry Services (KFS) announced in a past interview.

The launch of MV Jambo was, needless to say, scheduled to take place before the August 8 General Election.

But a spanner has been thrown in the works after Bonriz Insurance Marine Surveyors raised red flags.

Firstly, it alleges serious breaches in safety and quality of the Turkey-made ferries. Secondly, it suggests that an upward revision of the cost of acquisition of around KES 300m is unwarranted.

Bonriz, who had been contracted by KFS to assess the Turkey-built ferries, filed a case at a Mombasa Court under a Certificate of Urgency warning that Kenya would be importing ferries “that are in real sense vessels of mass deaths”.

When I read the words, “vessels of mass deaths”, my medial temporal lobe quickly brought to fore the heart wrenching images of the 1994 Mtongwe Ferry maritime disaster where over 270 people lost their lives.

If I haven’t missed anything about this ferry debacle, it is particularly surprising to learn that KFS moved to void the contract of Bonriz and denied its staff access to the construction site after the latter repeatedly raised concern over the quality of the vessels.

“The petitioner [Bonriz] has persistently pushed the respondent [KFS] to provide answers for why it is permitting the use of low quality materials in construction of the ferries against the express quality standards agreed in the contract with the ship builder,” it says in its claim filed in court.

On Wednesday, July 12 Justice Eric Ogola certified Bonriz’s application as urgent and temporarily barred KFS from re-advertising the tender for the provision of inspection consultancy services.

It therefore comes as a surprise that the KFS – a State Corporation under the Ministry of Transport and Infrastructure –  is planning to challenge the court’s decision.

Assuming that Bonriz Insurance Marine Surveyors have made full disclosure regarding its dealings with KFS to the courts in good faith.

Further assuming that Bonriz fully met the conditions set by KFS during the tendering process and emerged as the most qualified and competitive (among other parameters) warranting KFS to award it the consultancy, the question that begs is: “Why would KFS now not believe the report and concerns raised by the company it considered the best?”

The logistics of transferring persons from point A to point B should only be conducted when all safety checks have been concluded, as it occurs in air travel. Even after the commissioning of an aircraft, it undergoes regular checks by the airlines engineers.

That notwithstanding you will notice that pilots always carry out pre-flight checks, that include ensuring the flaps on the wings are functional, among others.

While cargo can be replaced, human lives cannot. Political expediency needs not play out in such crucial matters – unless of course the country didn’t learn anything from the worst maritime accident in its history: Mtongwe, 1994.

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Was the Early Oil Pilot Export Scheme a PR Stunt?

Oil RigWhen British company, Tullow announced the discovery of oil in Kenya’s Turkana County in March 2012, we were elated at the remote chance of joining the leagues of oil exporting countries.

As my jubilant fellow citizens celebrated the find; international media celebrated with us — going by the headlines back then. “A new oil discovery in Kenya is ‘very encouraging indeed’ for its export ambitions,” read Quartz Africa’s headlines. “Kenya discovers first ‘major’ oil deposit,” chimed Aljazeera English.

Fast-forward to the present where it has been estimated that our recoverable oil reserves amount to 750 million barrels.

The Government of Kenya (GoK) had earlier this year announced that it would begin exporting crude for testing in the global market: a scheme dubbed Early Oil Pilot Scheme (EOPS).

The Scheme intends to move 2,000 barrels a day by road — a distance of about 1,000 kilometres from Lokichar to the existing port of Mombasa.

It is normal for a novel exporter to send crude to the international market so that the buyers familiarize themselves with its properties.

According to the GoK, the EOPS was schedule to have kicked off in June 2017.

However, at the tail-end of June, the Cabinet Secretary for Energy, Charles Keter held a Press Conference announcing the postponement of the plan by three months.

“We do not want to start the export without having a clear picture of revenue sharing, we have to wait for the Senate to be formed, hopefully, we start the export after the election and when we have a Senate to approve the Bill [Revenue Sharing Bill],” Keter told journalists on 29 June.

In a swift rejoinder, Turkana Governor Josephat Nanok accused the GoK of looking for scapegoats in the name of Revenue Sharing Bill.

“The national government is unprepared and they know it, road construction is still on-going, the Kainuk Bridge has not even started…Tell them to stop looking for scapegoats,” Nanok told journalists.

Media reports have emerged, however, indicating that infighting within the Ministry of Energy led to the suspension of the EOPS.

One faction was keen to gain political mileage (with elections being only a month away) by having EOPS underway via road before elections, while the other one largely advocated for the running of the pilot once the 900-kilometre pipeline from Turkana to the yet-to-be-constructed Lamu port, was concluded. Tullow, the explorers are caught in the melee.

“Tullow is technically ready. Transporters have been contracted; 50 trucks and 30 tanktainers have been mobilised,” the explorer wrote back.

I am no oil expert, but I know Matters Logistics. The danger posed by 50 trucks and 30 tanktainers plying our congested Kenyan roads daily ferrying the flammable liquid for 1,000 kilometres is astronomical.

That notwithstanding, considering the small volumes (2,000 barrels per day) of Kenyan oil reaching the international market and its novelty, the GoK will have to sell at a highly discounted price.

Considering that a barrel of crude is currently retailing at $46 as per the US benchmark, WTI crude, Kenya’s crude would be lucky to get priced close to $40 per barrel.

Logistically speaking, it would be more prudent to hasten the construction of the pipeline which will move around 100,000 barrels of oil per day.

With improved quantities, the country stands to reap from economies of scale in addition to keeping our roads safe.

The plan to ferry by road is not only too costly but too risky on our congested and poorly maintained roads.

It should also be remembered that Kenya’s crude although termed as “good” is also waxy and will, therefore, have to be transported at high temperatures to prevent solidifying.

PR stunt? Pretty much, if you ask me. But hey, you didn’t ask. So I didn’t answer!

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Kenyans Should Brace for Higher-Priced Used Vehicle Imports

Imported vehicles at a yard in Mombasa | CREDIT // Business Daily Kenya
Imported vehicles at a yard in Mombasa | CREDIT // Business Daily Kenya

Of recently, my Eight years old son developed the love for cars. He started with identifying every Subaru on the road.

You’ll forgive him for being a millennial of bourgeoisie upbringing. However, there’s more to his new love for cars. He constantly works hard to identify any car on the road.

As recently as this weekend, he upped his game and proved that it is not just a coincidence when he asked me: “Baba do you know Lamborghini? ” of course I told him “yes baba I know it”, now that he got my attention, a big long-lasting smile on his face appeared.

Sometimes, inspirations finds you, a case at hand is the one I got from my son. So my indulgence into this topic.

If implemented, a proposal by the East African Community (EAC) may force middle-class Kenyans and citizens of the EAC to dig deeper into their coffers to import used vehicles.

In a raft of efforts to promote local vehicle assembly in the region, the report recommends for the reduction of the age limit for used vehicles into East Africa to five years by 2022.

South Sudan, Burundi and Rwanda are expected to feel the pinch the most since at present they do not have age limits set on such imports.

Tanzania and Kenya will be considerably affected as they currently only allow importation of used vehicles not older than 10 and eight years respectively.

The EAC report, prepared by Japan International Cooperation Agency (JICA) and the EAC Secretariat, argues that fragmented policies on age limits has led to stifled growth of local manufacturing plants and the flooding of the regional market with rickety old vehicles.

It is estimated that about 85 percent of the 2.2 million vehicles owned in the region are used imports. Owing to the high importation rate, the region loses about $2 billion per year.

“Lack of clear policy on age limits has been identified as a factor contributing to increased imports of used vehicles, while also posing adverse impact on environment, safety and health,” states a policy brief on the report that was submitted to a summit of the EAC heads of state last month (May 2017).

The report proposes a staggered and unified approach in the EAC to achieve the lowered age-limit of five years.

It is recommended that by 2019 individual countries of the community should have limited the age to 8 years (where Kenya is currently at) and ultimately achieving the five-year limit by 2021.

According to the report, the EAC will invest in two assembly plants that will manufacture vehicles with price ranging between $5,000 and $10,000; with a target of producing 500,000 vehicles annually by 2027.

In a community comprising countries that hold each other with great suspicion, simmering sibling rivalry and inability to agree on international trade agreements such as the Economic Partnership Agreement (EPA) with the European Union (EU), one cannot help but wonder how the two countries to host the manufacturing plants will be chosen.

Setting up manufacturing plants will have direct benefits to citizens of countries they are domiciled in, which range from: proceeds from land acquisition, setting up plants, job creation, import tax and VAT of raw materials.

Local businesses such as logistic service providers will stand to benefit from spill over effects.

In view of the foregoing, the roll out plans for setting up and rolling out such plants need to be solid ensuring the members of the communities benefit equally – location of the plants notwithstanding.

New vehicles are highly priced and out of reach for middle class citizens who will be affected by the lowering of the age limits.

If the EAC report is adopted and implemented, it will be laudable to see the region churning out brand new vehicles with prices ranging $5,000 to $10,000.

In the meanwhile, feel free to contact Sidoman for all your vehicle clearing and forwarding needs.

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Logistics’ Critical Role in Preventing “Skunky” Situations

Iko Toilet | Courtesy / StandardMedia
Iko Toilet | Courtesy / StandardMedia

Living in a multicultural environment is the best thing that has ever happened to us as Kenyans.

We get invitations from Kenyans of all walks of life, to attend their weddings and parties.

It is post-Ramadhan few days, you eat the food of different cultures and flavours, that comes obviously with some changes within the internal system as well.

You are at an outdoor event on some lush, perfectly manicured green grounds, with pearl white grand tents set up to keep the scorching sun from frying your brains.

You are very proud of yourself because despite waking up 45minutes later than you intended to, you managed to get to the function right on time.

One hour later, when the event’s entrée is being served up, nature calls and you recall skipping your usual pre-morning routine – which among others, includes bowel movement. You try to ignore it.

The impulse subsides, but only for a moment. The pain remains stiff, you feel as if a MOAB is been launched in your lower abdomen or intestine.

This is the moment you find small space in your brain to remember the Prophet and his companions.

It comes roaring back like a wave and your stomach rumbles making that loud ‘whale sound.’ People around you pretend they didn’t hear it because they are suave and debonair folks.

You’ll wonder the way they surveil your face as if watching the mouth of a ventriloquist for lips movement as your stomach acts like one naughty doll, based on the sound it bequeaths.

Beyond your control, the sweat gathers like a major political rally in Tononoka grounds; thick and fast the sweat trickles, as a result of pain and shame.

You reach for your handkerchief and wipe the sweat away as you give unsolicited commentary on how the ‘weather is too hot’.

Two more waves in under three minutes and you realise people giving you ‘the look’ and you just have to take care of business or the business will force its success in your pants or skirt. A very rare kind of business, this one!

As calmly as you can, you stand up to adjust your skirt downwards or button your jacket (depending on your gender!) and walk out thanking your gift of perfect recall which directs you to the precincts of the Mobile Lavatories as guided by the Master of Ceremony while making preliminary announcements.

In your mind, you know it’s going to be an in-and-out-operation, and you’ll be able to catch the Chief Guest’s speech and contribute in plenary.

As you briskly walk toward the now-most important room in your life, your eyes stumble upon this…

World's Longest Toilet Queue | Courtesy / Telegraph UK
World’s Longest Toilet Queue | Courtesy / Telegraph UK

What the heck are you supposed to do?

Luckily, Iko Toilets have developed a solution that guarantees such embarrassing situations do not occur.

David Kuria, MD at Iko Toilets is breathing new life into old rickety buses – that had been retired after years of serving the public as matatus – by repurposing them into spacious high-end restroom facilities.

According to Iko Toilets, such a bus can serve up to 2,000 individuals per day.

“We came up with the idea early this year. Unlike the traditional small toilets, this one can serve many people at a time. The bus also has bathrooms for those wishing to shower after the events,” Kevin Ng’ang’a, Iko Toilet’s head of logistics and marketing said at a recent event. “It costs between KES. 50,000 and 60,000 to hire the bus, but this can vary slightly depending on the event,” added Ng’ang’a.

The Ladies’ section of the Mobile Bus features two toilets and a bathroom while the Gents’ section features two urinals and two toilets.

As you would find in luxury buses plying long distance routes here in Kenya, the Iko Toilet Bus similarly have swanky interiors with huge mirrors, practical sinks, music systems among other welcoming features.

Unlike the traditional mobile toilets which are ferried on pickups, trucks or tethered as trailers, the Iko Toilet Bus can be comfortably driven to event site or grounds and parked for immediate use.

We in the logistics industry work in the full knowledge that old is gold; as evidenced by the transformative story of Iko Toilets.

Additionally, we remain innovative to get you out of any dicey situation that may turn ‘skunky’. Stay fresh, shall you?

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Airlift 2.0: Qatari Man Makes History Flying 4,000 Cows

Australian Dairy Cows. CREDITS | www.katestone.com.au
Australian Dairy Cows. CREDITS | www.katestone.com.au

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If Eid-ul-Fitri falls before my next blog, please receive my Eid Mubarak best wishes upfront.

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The shift in global weather patterns as a result of global warming coupled with poor policies and planning by some governments in the world have led to widespread shortages of basic food commodities.

This is arguably true for Kenya and our East African neighbours who are struggling with the high cost of maize meal, popularly known as Unga in local parlance.

Following a diplomatic tiff and ultimate showdown between Qatar and her Gulf neighbours including Saudi Arabia, where most of Doha’s fresh milk and milk products came from; there is a growing acute shortage of milk in the world’s richest country per capita.

Having already mentioned that Qatar is the world’s richest country per capita, it goes without saying that some of its citizens have very deep pockets.

Deep enough to import 4,000 dairy cows to fill the void caused by the collapse of milk supply by Saudi Arabia and her former allies.

Moutaz Al Khayyat is the defiant Qatari Businessman who intends to fly the 4,000 expectant dairy cows from Australia and the USA. “This is the time to work for Qatar,” Al Khayyat, who is also chairman of Power International Holding, said in an interview with Bloomberg.

Al Khayyat had already setup sheds for the cows which he initially planned to ship in September to his expansive farm – equivalent to 70 football stadia in the outskirts of Doha – where he already keeps sheep for milk and meat.

But after his country was ostracized, he decided to expedite the plan by flying in the cows instead of shipping them in.

Transporting livestock by air is no new occurrence and has been happening since 1924 when KLM flew Nico (a bull) from Rotterdam to Paris.

But the sheer scale of Al Khayyat’s plan is unprecedented.

Numbers Tell it All

Here are some statistics to help you contextualize and wrap your head around this logistical phenomenon:

The distance from Canberra, Australia to Doha, Qatar is approximately 12,250 kilometres and would take about 16 hours nonstop;

The distance from Texas, USA to Doha, Qatar is 13,000 kilometres and would take about 17 hours nonstop;

It would take approximately 40 to 60 Qatar flights to ferry the cows each of which weighs about 590 kilograms;

Airlifting the cows will cost the businessman $8 million.

Success of Animal Cargo Transport

Air transport is considered the most humane and safest mode of transporting live animals.

It’s safety however boils down to the ability of controlling three environmental factors that include: cargo compartment carbon dioxide concentration, humidity and temperature.

For optimal health of livestock aboard, the plane’s Environmental Control System must be carefully monitored while remembering that air conditioning performance are affected by the ambient air temperature

While a unique set of Standard Operating Procedures must be developed for Al Khayyat’s unique Airlift, the International Air Travel Authority (IATA) provides the Live Animals Regulations (LAR) that must be adhered to whenever transporting live animals.

The regulations are the global standard and the essential guide to transporting animals by air in a safe, humane and in a cost-effective manner.

Considering all these factors that have to be considered, you’d wonder how much preparations went into ensuring optimum conditions for all the animals, not to mention humans, that went into Noah’s Ark hundreds of years ago!

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The Logistics of Unga ‘Revolution’

Maize meal flour stocked in a local supermarket

May 2017 was not the first time Unga, or maize meal flour, made news headlines after its retail price reached record highs.

In 2011, many Kenyan citizens grappled with the escalating prices of fuel and food, and especially – as you may have caught on by now: Unga.

The original ‘Unga Revolution’ was spearheaded by convener of Bunge la Wananchi – Women’s’ Caucus, Emily Kwamboka (activist) on May 31 2011.

Kwamboka mobilized and led protesters in Nairobi’s Central Business District in demonstrations decrying the high cost of living and particularly the price of Unga, which then stood at KES 120 for a 2-kilo packet.

The then-Prime Minister, Raila Odinga came out and met the protesters outside his Office Block along Harambee Avenue and asked for 21 days for a solution to be delivered. Whether a solution was given within the 21 days is a story for another day or blog…

Fast forward to the current shortage of the staple that has sent empty bellies rambling resultant to retail prices spiralling upward from an average of KES 120 to KES 165. Being an electioneering year, politics have taken the centre-stage on Unga.

Amidst all the Unga Politics however, what has emerged clearly is that the importance of the logistics industry in dealing with the Unga shortage cannot be gainsaid.

Although silent players in business most of the time, logistics were greatly considered and discussed when 29,900 metric tons were first imported into Kenya from Mexico in mid-May 2017, within a record five days!

Kenyans took to Social Media and poked holes into the Government’s theory on how maize made its way from Mexico to Kenya in such a short time considering paperwork itself takes quite some time.

The Government of Kenya through Transport PS – Dr Paul Mwangi tried to clear the air by stating that Mexican maize had been Warehoused in Durban (South Africa) and transhipped to Kenya; explaining the quick turnaround.

The devil really is in the details. Whether or not the maize was from South Africa or Mexico or from a vessel that had been loaded with maize and was in the high seas speculating (as had been alleged by PS Mwangi), one thing is for sure: Sea Freight was involved and KES 90 Unga was available on our shelves and on the table of the 80 percent of Kenyans who consume it as staple.

Because Kenyans love Unga so much – to the tune of consuming three million bags a month – another vessel docked at the Kenyan port yesterday (June 19) with the precious Maize which will be processed to Unga.

To reach the various parts of the country in the shortest time possible the staple will be transported aboard the recently launched cargo trains on the Standard Gauge Railway, the much slower railway service managed by Rift Valley Railways and trucks.

Today I recognise the much-uncelebrated logistics players who make the world go around and more so those who meet the strenuous demands of emergency logistics. You all deserve a pat on the back.

As I thank you for stopping by to read this post, I urge you to go grab the subsidised maize meal before it runs out of stock! Happy Scrambling!

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CSR: What Have You Done?

Sidoman Challenge Cup - Rhamu, Mandera County.
Sidoman Challenge Cup – Rhamu, Mandera County.

 

Corporate social responsibility, often abbreviated “CSR,” is a corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing.

The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups.

CSR may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company but instead promote positive social and environmental change.

Companies can invest in local communities in order to offset the negative impact their operations might have.

A natural resources firm that begins to operate in a poor community might build a school, offer medical services or improve irrigation and sanitation equipment.

Similarly, a company might invest in research and development in sustainable technologies, even though the project might not immediately lead to increased profitability.

In order to account for the importance of social and ecological considerations in doing business, some organizations advocate the concept of the “triple bottom line”: social, environmental and economic or “people, planet, profit”.

CSR is titled to aid an organization’s mission as well as serve as a guide to what the company represents for its consumers.

Business ethics is the part of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR.

Private sector organizations adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles, but with no formal act of legislation.

Sidoman Investment Limited, for instance, is working with communities in education and sports among other CSR activities.

In 2016, Sidoman through its CSR activities donated Shs 980,000 worth football jersey kits, league sponsor to players in Makadara grounds in Mombasa, Rhamu in Mandera and also formed a league where the players were competing for the 1st and 2nd place spot in the respective leagues.

The donation net is expanded the current year 2017, with more teams on board, a bit bigger budget and demands expected.

Commissioning the league, I noted that the donation of the playing kits is part of a larger entity in working with communities in improving talents.

Our team also noted that other than granting a company the “social license” to operate in a particular market, CSR also impacts a firm’s brand equity and profitability.

Sidoman Investment Limited stand committed to improving the quality of life in our society. In this regard, the company has been supporting needy deserving projects, institutions, and individuals around the county through its Corporate Social Responsibility program and in turn creating long-term relationships.

Examples of good practice of CSR in the country abound, more so with for-profit corporations, pioneered by those affiliated to American, European and Japanese multinationals.

Companies in Kenya have taken to CSR with gusto in the last about five years improving staff welfare and work environment, embracing transparency and accountability in their business transactions, ethically improving profitability, self-regulation and implementing community development programs.

However, it is the community component that is highly visible to most people and gives companies the much sought after enviable public image.

Companies have been involved in various activities in sports, environment, health, education, and training, the needy in society and even national leadership and governance.

Rhamu
Sidoman Challenge Cup Winners

CSR, therefore, is not just a goodwill gesture by organizations wanting to look good to the public in order to hike their profits.

It is a prerequisite for good corporate leadership and governance as well as sustained operation and profitability. CSR is, in fact, a corporate competitive marketing strategy that ensures high organizational and product visibility thereby branding the business as an organization that cares about its consumers, the community it does business with and other stakeholders.

That is why in many cases, an organization will prefer to sponsor a CSR activity with one of the company’s products such as “Oldtown Premier League proudly sponsored by Sidoman Investment Limited”.
At Sidoman we continue to lead from the front with innovative products and services that solve our client’s problems. We offer our clients a one-stop shop for all their logistics needs.

Commitment to our clients is excellence in delivery that is what drives every Sidoman employee to deliver beyond the expectation of our clients. The employees form the bedrock of the company. A wealth of experience, constant training and periodic fine tuning of processes keep us efficient and competitive.

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Welcome: Women in the Logistics World

IMAGE SOURCE: TABPI
IMAGE SOURCE: TABPI

 

The whole month of March celebrates women, with the world joining in to celebrate International Women’s Day on March 8th.  As countries around the world continue to celebrate women, we at Sidoman Logistics would also like to celebrate our home grown heroines, like Amina Mohamed, and other great women who are making it in this mostly male-dominated world.

Supply and demand are needed for most industries to flourish, but without transport and logistics, this wouldn’t be possible. Our work usually involves understanding our customers’ needs, developing relationships with suppliers, ensuring that goods are transported on time and finding ways of minimizing the cost of transporting goods.

The transport and logistics industry is a field that most women do not get involved in, yet it plays a very big role in the country’s economy. In this industry, you will find yourself dealing with importation and exportation of commercial goods, clearing and forwarding, and moving the goods from the various ports of entries to where they are needed. It is an important yet overlooked industry.

This has a lot of exciting and lucrative career options that most people miss out on because most people over look it. This shortage of qualified candidates results in exciting careers. Careers include warehouse, storage and inventory management, transport management and planning, and engineering.

We work in a high-pressure environment and we salute all women who not only manage to work in such an environment but, actually excel in it.  A lot of people will depend on you in this industry, which needs you to be diligent and learn to plan ahead. You also need to be flexible as some unplanned for situations usually come up.

IMAGE SOURCE: SEXTON RECRUITMENT
IMAGE SOURCE: SEXTON RECRUITMENT

Logistics touches on every other sector in the world, and this means that in addition to it needing drivers and warehouse workers, the industry also requires professionals in other sectors such as business development and customer services. The logistics industry has in recent years been working to attract a more diverse workforce, but it also needs to focus on hiring women in positions where they are visible so as to inspire and encourage other women.

Sidoman Logistics is excited to be a part of this industry that is all about moving things, storing and supplying anything and everything, from people to animals, to goods this adventurous age where more and more women are taking up the challenge and opting for less traditional careers.

Happy Women’s History Month!

 

 

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Three Documents You Need When Importing

After earlier discussing the clearing and forwarding procedure in Kenya, this post will look at the three main documents that you will need when importing.

The three documents are the Import Declaration Form(IDF), the Certificate of Compliance and the Bill of Lading.

Goods being offloaded to a Sidoman Truck at the Port of Mombasa. Some shipping Terms may be difficult to understand [Image: Sidoman]
Goods being offloaded to a Sidoman Truck at the Port of Mombasa. Some shipping Terms may be difficult to understand [Image: Sidoman]
The Import declaration Form (IDF)

An Import Declaration Form (IDF) is required for all shipments with an invoice value above USD1,000 and/or any with total weight exceeding 70 Kgs and/or those whose description include Spare parts.

 

The importer applies for the IDF from the Kenya Revenue Authority (KRA) platform through a custom agent, but may consult Sidoman for purposes of Customs classification.

Most goods imported into Kenya are subject to an import declaration fee of 2.25% of the value of the goods, the minimum amount being KES5,000. The importer needs to identify if the goods they are importing are subject to the fee, or if they are exempted.

Once the fee is paid, you will obtain the relevant IDF forms prior to importing the goods. This fee is separate from and additional to, any other tax which might also be charged on the import, such as duty, excise and VAT.

The IDF contains key information such as

The Value of the cargo – Important for tax calculation

Quantity– Make sure it is detailed and correct

Quality– This information should be backed up by an inspection. Bodies such as the  Kenya  Bureau  of  Standards may  be  may be requested to determine if your goods meet the country’s standards.  Test  Certificates  from  accredited  bodies may be required in some instances.

Classification (HS Code) – Different HS codes attract different taxes. Ensure you have the correct certification.

Certificate of Compliance

The  Kenya  Bureau  of  Standards  has  appointed  certain  agents  (INTERTEK,  SGS) for the pre-export conformity inspection of the commodities that require inspection. These agents will issue to the Shipper/Supplier a Certificate of Conformity and the Test Results. An IDF will be required before any inspection can be performed.

The full list of goods that will need inspection can be found on http://www.kebs.org/?opt=qai&view=pvoc

It is important to plan ahead for this requirement as an importer, because the testing and issuing of the certificate can take time.

Master bill of lading (B/L)

This document covers goods that are transported by sea. It is signed by the carrier and serves as evidence of the contract of transport containing the conditions of transport, and as a document of title by which possession of the goods can be transferred.

Typically a B/L is issued in a set of three signed originals, one of which must be presented to claim the goods.

The B/L contains details such as:

Consignee – The full names and address of the receiver. This identifies the tax payer to the KRA.

The place of delivery

Description of the cargo – Always mention the actual number of packages

Container Freight Station (CFS) consigning – All containerized local imports are normally transferred to a private CFS assigned by the ports authorities so as to decongest the port. Dangerous cargo are the only exceptions.

Importation of goods into the country can get confusing at times, and that is why Sidoman Logistics is here to hold your hand and make the process an easy and stress-free for you.

 

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KRA Flags Off Regional Electronic Cargo Transit System

KRA Flagging off the first Truck: Photo credit: DAILY NATION
KRA Flagging off the first Truck: Photo credit: DAILY NATION

Today’s trade environment is challenging and complex, and there is increasing need for enterprises to keep track of their goods on transit.

Maintaining the integrity of goods is a crucial aspect of logistics because these goods are hauled through different territories, across countries and between customs controlled areas, such as border towns, inland port terminals, storage warehouses and container freight stations.

Starting Wednesday 01 March 2017, the Kenya Revenue Authority will be tracking all trucks that traverse Kenya to cross the borders to our neighbours, Rwanda and Uganda.

The KRA this week commissioned the Regional Electronic Cargo Transit System (RECTS) program.

This is a highly sophisticated solution that has been implemented with a view of tracking the movements of containers and vehicles on transit.

It replaces the pre-existing Electronic Cargo Transit System (ECTS).

Under the previous system, cargo and freight carriers were required to part with KES 120,000 for installation of tracking devices on their truck engines as well a monthly fee payment of KES 10,000 for the same.

Transporters will now be relieved of this burden because the new electronic tag is free.

The first truck under the new RECTS was flagged off by the Chairman of the KRA board, Edward Sambili, on Wednesday.

The project was financed by the United Kingdom Department for International Development (DfiD).

It solves systemic processes that the KRA states were “tedious and easy to manipulate” in the previous system.

RECTS is likely to facilitate trade along the Northern Corridor by lowering the cost and time of doing business for traders along this route.

The system is also expected to contain theft and diversion of goods originating from the Port of Mombasa and destined for markets across our East African borders.

More importantly, for KRA, the system will prevent tax evasion. The system was mooted during consultative meetings at the Heads of State Summit in Kigali back in 2014.

In a nutshell, the RECTS is a harmonized system that connects the customs departments in Kenya, Rwanda and Uganda.

It offers Central Monitoring Centres (CMCs) in these three neighbour countries that operate 24 hours a day, 7 days a week.

The long term plan is to encompass the entire East African Region.

Within the system, there are also a dozen (12) Rapid Response Units drawn from security agencies and customs officers in the region.

RECTS comprises smart gates and automatic number plate recognition at the points of entry and exit at country borders.

This does away with the need for manual recording of data as was the case before.

There is likely to be some significant time saving for transporters wishing to have their trucks cleared.

The introduction of the Regional Electronic Cargo Transit System is a welcome move.

It is likely to bring along better cross-border coordination and tracking of goods in transit, prevention of unwanted diversions and transparency to stakeholders.

There will also be more efficient compliance with the laws of transportation.

And most likely, the Kenya Revenue Authority will be bursting at its seams with increased revenue collection. 

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