February 6, 2022

Rwandan Firms Operating Old Cargo Trailers Which Are Expensive to Run

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Tanzania and Kenya trucks dominate the cargo transportation for good destined for Rwanda

As Rwanda attempts to position itself as a regional logistics hub, the country’s cargo transportation faces a challenge as it’s dominated by foreign trucks.

The country has built multimillion dollar Inland Container Depot, which among it’s target market, is eastern DR Congo. In the years to come, as par the government’s planning, the 1.2m tons of cargo that eastern Congo needs every year should largely be from Rwanda.

A World Bank analysis released last months shows that Rwanda is currently acting as a significant land-bridge to Eastern DRC.

However, to satisfy the market for the logistics platform in Kigali, different pieces of the puzzle have to fall in place. Among them is how the imports will travel from different parts of the world to the Inland Container Depot in Kigali.

Since there is no railway line yet, for now the imports will continue coming by road. But there is one problem, according to the World Bank’s assessment; trucking services are dominated by foreign firms.

Rwanda’s trucking services face difficulties in competing with other firms operating on the regional corridors, which limits the potential to provide diversified services.

Rwanda’s reliance on trucking services of neighboring countries in part reflects lower efficiency of trucking firms.

“Almost four fifths of trucking enterprises in Rwanda operate only one truck and most of the rest less than ten trucks,” says the World Bank’s assessment.

In addition, many of the trucks are purchased as used vehicles, meaning that they have higher operating costs and lower economic lives. The average truck that is registered in Rwanda is 12.6 years old.

The situation is very different in Kenya, where cross border operations are dominated by firms that own fleets of hundreds of trucks. Also, the average age of trucks registered in Kenya is 7.5 years, or 40 percent lower than the average for Rwanda.

However, recent investments in newer vehicles by Rwanda operators, through collective investments companies, is narrowing the gap.

Another aspect tackled in the World Bank review of Rwanda’s logistics hub project, is the standard gauge railway lines that are planned to come in from Kenya via Uganda to Kigali, and Tanzania on to Kigali.

Both lines have been in the works since the early 2000s. But the troubled relationship between Rwanda and Uganda, has resulted into the death of the Kenya-Uganda-Rwanda.

Kigali actually accuses Ugandan President Yoweri Museveni of blocking the extension of the railway from Kampala to Rwanda’s border. Instead, argues Kigali, Museveni decide to extend the line northwards to South Sudan.

Rwanda says Uganda has been engaged in economic sabotage to try to squeeze the government as part of a regime change scheme.

Now, the World Bank Says the Kenya-Uganda-Kigali route is not economically viable.

“The railway line along the Central Corridor in Tanzania holds the most promise for Rwanda,” reads the World Bank assessment, adding: “This is due to the faster speed and therefore shorter transport time that has been promised once the line is operational.”

Tanzania is implementing a railway development program through the rehabilitation of the existing meter gauge system and construction of a new standard gauge line that runs from Dar es Salaam to Mwanza via Isaka, for a total of 1,219km.

For Rwanda, the Standard Gauge Railway (SGR) system in particular could have important operational impacts. The effects are tied to the design parameters of the system, which is expected to have axle loads of 35 tons and a design speed of 120km/h for freight trains.

At such a speed, the combined rail and road transport option through Isaka would more than halve the transit time between Kigali and Dar compared to the all-road option.

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