Importers, exporters and logistic firm have
welcomed Kenya Revenue Authority’s decision to open the Regional Electronic
Cargo Monitoring System (RECTS) to private vendors.
The move, they say, will help ease delays and improve
cargo movement along the Northern Corridor.
RECTS is a digital platform that allows East African
tax authorities to track transit goods in real time using GPS and smart
electronic seals.
The Shippers Council of Eastern Africa (SCEA), which
represents importers, exporters and other stakeholders in the logistics and
shipping industry, said increased competition among electronic seal providers
should address longstanding shortages that have contributed to delays at the
Port of Mombasa.
SCEA chief executive Agayo Ogambi said the transition
was long overdue, particularly as transit cargo continues to account for more
than 30 per cent of port throughput.
“We applaud KRA for this, it was long overdue. We hope
all the interoperability and systems interface have been attended to,” Ogambi
said, “No more shortage of seals and delays.”
The new framework comes as traffic along the Northern
Corridor continues to rise, with between 2,000 and 3,000 heavy-duty trucks
moving on the route each day.
The number can exceed 3,500 during peak periods,
putting pressure on cargo monitoring systems and border infrastructure.
The Northern Corridor links the Port of Mombasa with
Uganda, Rwanda, Burundi, South Sudan and the Democratic Republic of Congo,
making efficient cargo clearance and tracking critical to regional trade.
SCEA said allowing multiple private providers could
improve reliability and service delivery by reducing dependence on a single
source of electronic seals.
The authority, however, faces a delicate balance
between improving efficiency and ensuring that the transition does not increase
the cost of moving goods.
Under the new model, KRA is shifting from
government-owned electronic seals to a Multi-Vendor User-Owned Framework
covering both dry cargo e-seals and wet cargo e-fuel seals.
Transporters, clearing agents and other users will
enter commercial agreements directly with approved vendors and purchase, own
and maintain the electronic seals.
“This model is intended to support the port
decongestion initiatives as well as democratise access to the seals,” Commissioner
for Customs and Border Control, Lilian Nyawanda, said in a notice.
KRA has since approved 15 companies to provide
electronic monitoring and tracking services under the new framework.
The approved vendors are Autotronix Telematics,
Bandika IoT, I-Spy Africa, Keshi Holdings/Leaviit Holdings joint venture,
K-Trac Telematics, Leztalk Technologies, Nebsam Digital Solutions and Oak and
Gold.
Others are Quartix Telematics, Radar Telematics,
Rivercross Tracking, Safetrac, Savannah Springs Technology, Smart Watch
Solutions/PIS joint venture and Track and Trace.
KRA-owned RECTS seals are being gradually phased out,
with the transition scheduled for completion on October 26.
Thereafter, cargo under customs control will be
monitored exclusively through devices supplied by the approved private vendors.
But businesses are howeve concerned about the financial
implications.
While the RECTS system application is free, the
licensing fee has historically been equivalent to about $200 (Sh25,906) per
licence, while the physical electronic seals will now be purchased from private
vendors at prices that may vary.
Industry players are therefore calling for
transparency in pricing and service charges to ensure the new system delivers
efficiency without creating another a cost burden.
Electronic monitoring provides real-time alerts when
cargo seals are tampered with, allowing response teams to act faster in cases
involving theft, diversion, accidents or other incidents.
Northern Corridor inflict significant financial losses
through tax revenue leakage, stolen high-value commodities, and a critical loss
of regional market share to alternative routes.
“Cargo robbery along the Northern Corridor is on the rise, with some incidents tragically resulting in the loss of truck drivers’ lives,” the Long Distance Drivers and Conductors Association of Kenya notes.
Inefficiencies, security lapses, and cargo handling
bottlenecks along the vital trade artery drive substantial
economic fallout for both governments and private logistics operators.
Previous industry data indicates that while electronic
tracking successfully reduced cargo theft by 82 per cent and dumping by 10 per cent, attempts at
electronic seal tampering surged by 49 per cent in recent years.
When seals are tampered with or tracking data
transmissions drop, trucks are grounded for security audits.
Delays cost transport operators $200 to $250 (Sh32,382)
per day per truck, a penalty that is ultimately passed down to consumers
through more expensive goods.
While rapid response units salvage most tampered
shipments, successful diversions still lead to millions in losses per incident
for individual businesses.
System lapses and tracking network downtimes
(occurring two to eight times per month) create blind spots that facilitate
these crimes.
The entry of private vendors is consequently being
viewed as an opportunity to inject competition into the cargo monitoring market
while strengthening security and reducing operational disruptions.
If implemented smoothly, importers and exporters say
the new framework could mark an important shift from a supply-constrained
system towards a more competitive and responsive cargo monitoring market.
This will help reduce truck turnaround times, ease
port congestion and strengthen Kenya’s position as the region’s main logistics
gateway.