Government signs deal with Netherlands on fresh produce transportation

The government on Tuesday signed a Memorandum of Understanding with the Netherlands to develop a Cool Logistics Corridor in a move that is set to boost the export of fresh produce in the country.

The agreement, signed by Roads and Transport Cabinet Secretary Kipchumba Murkomen and the Dutch Ambassador in Kenya Maarten Brouwer, will facilitate private investment in cool logistics infrastructure to support the transportation of fresh produce by sea.

During the signing, CS Murkomen lauded the strong relations between Kenya and the Netherlands which straddle trade and transport sectors, as well as development cooperation.

"The codeshare relationship between KQ and KLM has boosted Nairobi as an air transport hub in the region while enhancing Kenya Airways' reach in Europe and the rest of the world," said Murkomen.

He added that the MoU will enable the Port of Mombasa to benchmark from the Port of Rotterdam and improve its competitive edge in the region.

Experts project that a well-functioning sea freight logistics system for perishables will double or even triple horticultural exports which could create up to 3 million jobs in the horticultural and agro-logistics industries.

The MoU is anchored by the Netherlands' horticulture trade relationship with Kenya. Nearly half of the flower exports from Kenya are destined for the Netherlands, with Kenya's avocado exports also increasing substantially.

The logistics corridor to run from Mombasa to Malaba will entrench Kenya's leadership in climate change. Sea freight is far more efficient in terms of transport cost and carbon footprint (95 per cent lower emissions than airfreight). Developing a sea freight logistics system for perishables will, therefore, enhance Kenya's competitiveness.

According to the CS, the ongoing developments around the Port of Mombasa, such as the Dongo Kundu Special Economic Zone, will provide a good environment for private sector investment.

"This is a private sector-led initiative. This MoU, therefore opens up an opportunity for the private sector to calibrate their infrastructure to suit the cool logistics regime," said Murkomen.

Brouwer said the MoU is significant, as both Kenya and the Netherlands are gateways to East Africa and Europe, respectively. He said direct sailing between the Port of Mombasa and the Port of Rotterdam takes only 22 days and challenged shipping lines to see an opportunity.

The scope of the project involves various aspects of logistics, including port facilities, transportation networks and regulatory frameworks. Through a collaborative effort, the Cool Logistics Corridor aims to set new standards for the transportation of fresh produce, not only benefiting bilateral trade but also contributing to the overall development of Kenya's agricultural sector.

Regarding the governance structure, both governments have committed to establishing a joint steering committee responsible for overseeing the implementation and monitoring of the Cool Logistics Corridor. This committee will comprise representatives from relevant ministries, private sector stakeholders, and international organizations, ensuring transparency and accountability throughout the project's lifespan.

With the Cool Logistics Corridor set to transform the transportation of fresh produce, Kenya and the Netherlands are set to unlock new opportunities for economic growth and development.

A well-functioning sea freight logistics system for perishables could double or even triple Kenya's horticultural exports, and that could create up to 3 million jobs in the horticultural and agro-logistics industries.

Glad to have today signed, on behalf of Kenya, an MoU with… pic.twitter.com/mmEeAqmNti

— KIPCHUMBA MURKOMEN, E.G.H (@kipmurkomen) March 26, 2024