FREIGHT & LOGISTICS SUPPLEMENT
By Owen Wagabaza
Uganda's freight and logistics industry started with the building of the Uganda Railway. At the time, the major purpose of the railway was to transport copper at Kilembe mines. Coming all the way from Mombasa, the railway made things possible, especially for those along the railway line.
The first railway into Uganda was extended in the mid- 1920s from Nakuru to Soroti through Tororo in 1929, before coming down to Jinja through Namasagali. The railway finally reached Kampala in 1931, before being extended to Kasese in western Uganda, where it reached in 1956 and the northern line reaching Pakwach en route to Arua in 1964.
In the 1960s, the three East African countries of Uganda, Kenya and Tanzania decided to form the East African Community (EAC). The EAC was more of a country with no borders between the three countries.
"There was one airline under the name East African Airlines, all the ports belonged to the community under the East African railways and harbours and most importantly, there was one currency, the East African shilling. One would move from one country to another without any identification. Passenger trains would travel all the way from Kasese to Mombasa without any hindrance," Charles Kareeba, the chairperson of Uganda Shippers Council, says.
In 1977, however, the EAC collapsed, and this led to a change in many things. The three partner states, including Zambia, had bought ships under the East African National Shipping Line. "With our own ships, we carried our own imports and exports, and we competed favourably with other super ferries.
But all these collapsed with the community," Kareeba explains. With the breakup of the community, the East African Railways and Harbour Authority was no more and it gave birth to the Uganda Railways Corporation in 1977.
The Uganda Railways covered 190km from Kampala to the Kenyan border and 8km between Kampala and Port Bell. From Kampala, it went to Kasese in western Uganda, and its northern route went through Tororo, Mbale, Soroti, Pakwach, Lira and Gulu town, covering 1,266km in Uganda alone. CLICK HERE FOR MORE ON THIS SUPPLEMENT
Changing face of freight industry
Established in 2001 with a core aim of enhancing public confidence in the industry, The Uganda Freight Forwarders Association (UFFA) brings together 114 freight and forwarding companies in the country. The association's chairman, Hussein K. Kiddedde told Prisca Baike about their activities.
For how long have you been at the helm of the association?
It is now one year. I became UFFA chairman in 2017 after serving as the general secretary since 2015 and board member since 2008. I serve with an energetic and committed executive committee comprising a vice-chairman, general secretary, treasurer and three board members. Steering committees that focus on specific aspects of the sector are also in place and very supportive.
How much experience do you have in the freight and forwarding industry?
Quite a lot I must say. I made 22 years in the industry this year. I started in 1996 while in school vacation, starting on the "shop floor" as a trainee. I have gradually risen through the ranks due to experiential learning, training, mentoring and continuous professional development with different logistics organisations that accorded me the opportunity in different parts of the world, thus attaining the status of Chartered Member of the Institute of Transport and Logistics (CMILT). I am also a board member of the National Logistics Platform (NLP) and the Federation of the East African Freight and Forwarding Association (FEAFFA).
Why was UFFA started yet there were already other associations?
UFFA was born out of a desire by members to belong to an association that is driven to enhance public confidence in the freight and forwarding industry. Although there were other associations, the approach UFFA took was not to look at the sector as only clearing and forwarding. We instead focused on the actors within the entire logistics chain, thanks to our visionary founders. Existing associations at the time were only bringing together a limited scope of players, essentially excluding those other actors in the supply chain who were playing an important role. Today it is an umbrella association for logistics companies in Uganda whose total membership handles 90% of the country's freight logistics and import, export and transit, a member of both the regional federation (FEAFFA) and the global body FIATA. CLICK HERE FOR MORE ON THIS INTERVIEW
Ugandans pay double to transport goods
By Prisca Baike
It is no secret that freight charges between Mombasa port and Uganda are the highest in the world. But that is not all. Despite the progress registered by the freight and forwarding industry, the sector is still grappling with a host of challenges. Rajesh Kumar, a businessman in Kampala attests to this.
"The money I pay to transport my goods from Mombasa to Uganda is almost three times what I pay to get them from Europe to Mombasa," Kumar says.
He says the effect of these high charges eventually trickles down to the consumers in form of high prices. Hussein Kiddedde, the chairman of Uganda Freight Forwarders Association (UFFA) says although consumers are affected by the high freight costs, the freight and forwarding companies, too, bear the brunt of the exorbitant charges.
"The biggest challenge is that we don't have a port of our own so we are taxed by Kenya," Kiddedde says. He further notes that unlike other regions with wellestablished rail transport systems, Uganda uses road transport, which is very costly in terms of transporting cargo. "This complicates the logistics and transport system," Kiddedde adds.
He explains that only logistics companies registered in Uganda can provide services in Uganda, yet services provided by a Ugandan logistics company will almost invariably be higher than those provided by, for example, a Kenyan company.
He says this is due to the high road transport operating costs as a result of high taxes on new vehicles and spare parts, high taxes on fuel and lubricants, poor air links with the rest of the region and indirect air links with Europe, Asia and America.
Joseph Mutebi, a freight forwarder, points out the lack of access to affordable finance as a major curtailing factor to business growth in the industry. "The cost of borrowing from banks in Uganda is high. It is therefore hard for us to buy new equipment such as delivery trucks," Mutebi says.
Mutebi also notes that there is an acute shortage of skills in the logistics sector. He mentions that heavy goods vehicle drivers, heavy equipment operators, warehouse managers, health and safety officers, cold storage managers, and many other skills are lacking in the sector. At policy level, Kiddedde notes that the fragmentation of government and administration policy has negatively impacted the sector. CLICK HERE FOR MORE ON THIS STORY