Kenya and Rwanda will replicate Uganda’s Electronic Cargo Tracking System (ECTS) this year, to reduce the cost of transporting cargo on the Northern Corridor.

This follows a directive by the Northern Corridor Heads of State Summit in Kigali that the procurement process of the ECTS be finalised to address the issue of cash deposits and overstayed cargo in Mombasa.

The new system is expected to lower the cost and time of doing business and curb theft and diversion of goods destined for its market through the port of Mombasa.

According to Uganda Revenue Authority commissioner for Customs Richard Kamajugo, the system will improve the efficiency of Customs processes resulting in higher revenue collections.

“There will be a pre-arrival clearance of goods way before the ship arrives at the port of Mombasa and the containers, which will save time,” said Mr Kamajugo, adding that the system will also provide realtime information on the location and status of the cargo in transit.

READ: Automation of customs clearance ranks Uganda with the best in trade

Before the introduction of the technology, one could only know the location of transiting cargo by calling the driver.

“ECTS triggers an alarm whenever there is diversion from the designated route, an unusually long stopover or when someone attempts to open a container,” said Mr Kamajugo.  

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

He said that the electronic tracking system had helped traders in Uganda cut the cost  and time of doing business from six days to one- and-a- half days.

It costs transporters $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 goods. As a result, the cost of transport tends to increase the further inland the destination of cargo, not only because of distance but also the number of stoppages along the routes.

In Uganda for example, the major delays arise from physical escorts, which are considered a major non-tariff barrier in the region. The physical escorts in Uganda have the effect of increasing the transit period from one day to 3 - 4 days, effectively resulting into an estimated increase in transport costs of about $400 -$500.

Kenya, Rwanda and Uganda’s decision to implement the ECTS is a response to the governments’ interest in improving tax collection, enhancing enforcement of cargo handling regulations and employ advanced technologies to facilitate better reporting and data mining capabilities for operational decision making.

READ: Uganda extends e-cargo tracking system to Kenya

“ECTS will ensure that we get precise information on imports and exports from authorities at the port of departure,” said Gilbert Langat, the chief executive Kenya Shippers Council.

He added: “With ECTS, transparency and accountability will also be enhanced especially at the country’s prime port,” noted Mr Langat.

In November last year, a status report compiled by transporters and customs agents on the Port of Mombasa, said that it risks losing its competitive edge following a wave of cargo theft that has hit the supply chain along the Mombasa-Malaba highway.

The Kenya Revenue Authority (KRA) describes the theft of the cargo as “a grave concern” but says it cannot quantify the loss.

Mr Langat said high-value goods such as coffee, sugar and electronics were the most targeted. “Pilferage can only be done when the contents of a container are well known.

“Unscrupulous traders import goods as destined for Uganda for example, pay duty to the Uganda government and exploit the weak monitoring system to divert the goods into the Kenyan market,” he noted.

“This is denying the revenue authority a huge amount of money since various products such as sugar attracts significantly varying levels of taxation in Kenya and Uganda.”