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Transporters now demand 60% of local contracts

The Kenya Transport Association is pushing for a 60 percent mandatory stake in local transportation and logistics business from multinational firms operating in the country.

This, the association says, will safeguard the local players from exploitation from multinationals.

In submissions to the Committee on Trade, Industry & Cooperatives, KTA argued that the current laws do have loopholes, which expose local drivers to exploitation.

KTA chairman Newton Wang’oo said that multinational companies often outsource logistics and warehousing services abroad, using contracts applicable across their operations.

This has left local companies with an uneven playing ground hindering their ability to compete.

“We advocate for a quota system and Kenya has the capacity to ensure that this is achieved. We have talked to one of the players- EABL for supply of low cost brewer Keg to be exclusively reserved to local transporters,” said Wang’oo.

The association comprising of 300 members owning 15,000 trucks said local entrepreneurs own 90 percent of trucks in Kenya, while multinationals contribute only 10 percent.

The big firms however secure over 70 percent of logistics contracts, leaving local investors with limited opportunities.

The association also pointed out that shipping lines are engaging in practices that stifle competition in the industry.

These include a single company taking on multiple roles, such as acting as a cargo carrier, operating a Container Freight Station (CFS), providing land transport through bills of lading, owning a clearing and forwarding (C&F) company, and managing an empty container depot.

As Kenya looks to expand its presence in regional, continental, and global markets, through the AfCFTA, the association said structures need to be in place to safeguard local investors and set a strong domestic foundation.

“Without addressing the challenges of unfair practices and limited local participation, Kenyan companies risk missing out on valuable opportunities in the evolving global trade landscape, especially as integration efforts favour intra-African trade,” said Wang’oo. 

SourceThe Star
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