Kenyan manufacturers are exploring a shared logistics model in Lusaka, Zambia, aimed at lowering the high cost of accessing Southern African markets, as new research shows how fragmented supply chains continue to undermine small exporters.
- •A study by the Kenya Association of Manufacturers (KAM) proposes a centralised SME distribution warehouse in the Zambian capital, where exporters could pool cargo, share storage infrastructure and coordinate last-mile distribution.
- •The model is designed to improve container utilisation, compress freight costs and stabilise delivery timelines, factors increasingly critical to competitiveness under the African Continental Free Trade Area (AfCFTA).
- •According to the report, logistics inefficiencies, rather than tariff barriers, are the binding constraint on SME participation in continental trade.
“Competitiveness will ultimately be determined by delivered cost and delivery reliability, not by preferential tariff access alone,” said Tobias Alando, CEO at KAM, noting that logistics and trade facilitation costs often outweigh tariff advantages across African corridors.
The study shows that logistics costs across key trade routes are layered and cumulative, with inland transport, border delays and compliance charges eroding competitiveness. Along the Nairobi–Lusaka corridor, road freight alone ranges between US$ 3,500 and US$ 7,000 per 20-foot container, making it the single largest cost component for exporters.
Transit times vary widely, from eight to 30 days, due congestion, border inefficiencies and operational disruptions. For SMEs operating on limited working capital, this variability translates into delayed cash cycles and heightened risk exposure.
Documentation costs, though smaller in absolute terms, add further pressure. Exporters incur between KSh15,000 and KSh30,000 per consignment in regulatory and shipping documentation fees, costs that remain largely fixed regardless of shipment size.
A central constraint identified in the report is shipment fragmentation. SMEs typically move small consignments but face the same compliance requirements as large exporters, limiting their ability to spread fixed costs.
This is compounded by weak cargo aggregation mechanisms. Firms often delay shipments to build volume, sometimes holding cargo for up to 10 days before dispatch. At destination, the absence of shared warehousing forces exporters to rely on ad hoc distribution arrangements, further increasing costs and uncertainty.
Backhaul inefficiencies also inflate freight rates, with trucks delivering goods to Zambia frequently returning empty, prompting transporters to price round-trip costs into outbound shipments.
Lusaka hub seen as cost lever
The proposed Lusaka warehouse is designed to address these structural gaps by enabling cargo consolidation and shared storage infrastructure. Exporters would be able to pool shipments, access full-container freight rates and distribute goods more efficiently within Zambia.
The model also introduces a shift in logistics strategy, positioning inventory closer to the end market rather than relying solely on origin-based consolidation. This could reduce delivery times and improve reliability, a key determinant of competitiveness under AfCFTA.
However, the study cautions that cost gains from aggregation could be undermined by persistent corridor inefficiencies. Border delays at Nakonde, ICT system disruptions and inconsistent coordination between agencies continue to affect transit predictability.
Average clearance times at the Nakonde crossing remain around 2.5 days, with delays linked to scanner downtime and documentation discrepancies.
