Kenya must urgently address logistics inefficiencies, regulatory hurdles and SME access constraints if it is to expand its share of time-sensitive, high-value global supply chains and fully unlock its manufacturing export potential.
This is according to manufacturing and logistics experts who spoke during a high-level industry engagement in Nairobi that brought together policymakers, manufacturers and global logistics players.
Federal Express Corporation (FedEx), in collaboration with the Kenya Association of Manufacturers (KAM), convened a CEOs meeting where stakeholders examined how logistics systems can be better aligned to support Kenya’s industrial expansion and export competitiveness.
The discussions come as Kenya targets raising manufacturing’s contribution to GDP from 7.3 per cent to 20 per cent by 2030.
Opening the forum, KAM Chief Executive Tobias Alando said global and structural pressures continue to weigh on manufacturers, raising costs and disrupting supply chains.
“Global dynamics continue to affect the manufacturing sector in Kenya. Beyond global developments, structural factors within the logistics ecosystem, such as regulatory requirements and infrastructure capacity, play a role in shaping the competitiveness of locally manufactured goods in regional and international markets,” Alando said.
FedEx said Kenya remains a key strategic market in its Africa growth plan, citing its position as one of only nine direct-serve markets on the continent.
“Kenya is a strategic player in our growth story in Africa. Our continued investment in capacity to and from Nairobi, combined with our global air network, enables businesses to access international markets with greater speed, reliability and predictability,” said Leon Bruwer, Managing Director of Sales for Sub-Saharan Africa at FedEx.
Stakeholders noted that while Kenya already performs strongly in perishable exports such as tea and flowers, expanding into higher-value manufacturing will require more efficient and integrated logistics systems.
They highlighted precision logistics as increasingly critical for sectors such as pharmaceuticals, electronics, automotive and agribusiness, where delivery speed and product integrity are essential.
However, they warned that access to efficient freight systems remains uneven, particularly for SMEs, which face high costs and complex trade procedures.
A recent logistics study report commissioned by KAM with support from TradeMark Africa revealed that structural inefficiencies across key transport corridors are eroding competitiveness in regional markets.
The report points to major challenges along routes such as the Lusaka corridor, where transporting a 20-foot container costs between $3,500 (Sh452,445) and $7,000 (Sh904,890), driven by fuel costs, tolls and inefficiencies such as poor backhaul utilisation and informal charges.
At border points like Nakonde–Tunduma, despite handling about 1,000 trucks daily, clearance can still take an average of 2.5 days due to congestion, system downtimes and documentation delays.
These disruptions, experts note, undermine the promise of the African Continental Free Trade Area (AfCFTA), which envisions a single market of over 1.3 billion people but continues to face setbacks from high logistics costs and border inefficiencies.
The forum concluded with a joint commitment by FedEx and KAM to strengthen collaboration aimed at improving logistics efficiency and expanding global connectivity.
