Carriers diversify to survive competition SGR, Covid

Shipping & Logistics

Carriers diversify to survive competition SGR, Covid


Mr. Saeed Abdirahman working in his office. He is the founder and CEO of a logistics company based in Mombasa, Sidoman Limited. PHOTO | BOWL

Summary

  • When the outlook for the freight industry started to look bleak, Sidoman Investment Limited quickly looked elsewhere and began offering logistics solutions to businesses of all sizes.
  • Mr Abdirahman said his company has continuously broadened its reach to offer a wider range of logistics choices.

When the government ordered that all cargo destined for Nairobi and the hinterland of Mombasa port be transported via Standard Gauge Railway (SGR) trains, it plunged logistics companies into financial distress which resulted in financial distress. the closure of a number of them.

For the few who were still operational, things got complicated when Covid-19 hit early last year.

However, a few have managed to remain a float in the industry after diversifying their businesses.

When the outlook for the freight industry started to look bleak, Sidoman Investment Limited quickly looked elsewhere and began offering logistics solutions to all sizes of businesses, from small traders to large corporations in a changing global market. .

“We offered different logistics support, from air, sea to road. That is why we are surviving these economic difficulties. We work closely with established carriers to ensure that we deliver shipments by air on various global routes, ”said Sidoman CEO Saeed Sheikh Abdirahman.

Mr Abdirahman said his company has continuously broadened its reach to offer a wider range of logistics choices.

“We are moving towards membership in the World Cargo Alliance (WCA) to improve our service delivery through partnerships with major overseas ports,” said Mr. Abdirahman.

Others decided to specialize when the competition got tough and the Covid-19 health regulations became stifling for their business.

Mr Julius Karanja, one of the truck owners in Mombasa, said SGR and Covid-19 affected business, forcing most of those who did not diversify to close their stores.

“I could not venture into air transport which remains lucrative after the introduction of the SGR freight train due to lack of funds. But I have converted my eight trucks to low bed trucks to transport specialized goods that cannot be handled by train, ”Karanja said.

At that time, the Kenya Railways Corporation benefited from government order to transport Nairobi and other areas of the hinterland from the port of Mombasa via the Standard Gauge Railway (SGR).

According to the Kenya National Bureau of Statistics (KNBS) Economic Survey 2021 report, the volume of freight transported via the SGR increased by 4.8% from 4.2 million tonnes in 2019 to 4.4 million tonnes in 2020.

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