The new E-cargo tracking system to save costs on Northern Corridor

Trucks on the Northern Corridor

Business owners in Uganda, Kenya and Rwanda are expected to save on the cost and time of transporting cargo on the Northern Corridor following the launch of a joint electronic cargo tracking system.

The $4.4 million Regional Electronic Cargo Tracking System (RECTs) will enable the three countries to track movement of goods along the Northern Corridor from the port of Mombasa to Kampala and Kigali.

The system is expected to reduce transit time, cargo theft and diversion of goods in transit, which will then reduce the cost of doing business along the corridor.

RECTs will also eliminate the need for physical escorts and monitoring of sensitive cargo, such as batteries, fuel and cigarettes.

The system was officially launched by revenue authorities of Kenya, Uganda and Rwanda in Kampala and will be free as the tax bodies will meet all operational costs.

“The system will help us monitor goods from end to end; it will ease cargo handling, improve revenue collection and reduce diversion of untaxed goods into the market. It will lead to improved fair trade as goods that have not been taxed will not be diverted to distort the market. This will benefit our traders and assure potential investors of a level playing field in our region,” said Uganda Revenue Authority Commissioner-General Doris Akol.

The system comprises tracker satellites, central command centres in each of the revenue authorities in Nairobi, Kampala and Kigali, smart gates and rapid response units.

An electronic seal is attached to transit cargo vehicles and gives real-time updates such as vehicle location and speed, and if the container is tampered with or not.

Importers, transporters, and the revenue authorities will be able to access this information. Rapid response units are stationed along sections of the Northern Corridor identified as notorious for diversion of goods.

They will respond to alerts received from the command centres about suspicious behaviour like diversion from the designated route, unusually long stopovers, or attempts to open a container. The rapid response units will investigate and resolve such issues immediately.

The United Kingdom’s Department for International Development (DfID) financed the joint project through TradeMark East Africa.

“The launch of RECTs marks an important milestone towards our shared goal of reducing by a third the time it takes to import and export goods from Uganda,” said DfID in a statement

Frank Matsaert, TMEA CEO, said the efficiency of RECTs will ingrain fair terms of trade by creating a level playing field for both importers and local industries as it helps in eliminating diversion of cargo.

The system will also help seal loopholes that cause losses in revenue through suspected under-declaration of the value of exports or theft of cargo.

Uganda was the first country to launch the electronic cargo tracking system in 2014. It has since helped traders in the country reduce the time of transporting cargo from Mombasa from six days to a one- and-a-half days.

It costs transporters from $200-$250 per day when trucks are delayed along the transit routes. Part or all of this cost is passed on to the owner of the goods. As a result, the cost of transport tends to increase the farther inland the destination of the cargo, not only because of distance but also the number of stops along the way.

 

Source: The East African