Customs agents fight to stay afloat in choppy logistics sector waters

“A rope to climb or a noose if we fail” is how Kenya International Freight and Warehousing Association (KIFWA) described its new five-year strategic plan for customs agents, whose numbers have shrunk in recent years due to operational difficulties.

It is against this backdrop that the lobby launched its strategy last week, with the hope that it would bolster its members’ relevance in the logistics value chain.

“This is not just another plan. It’s our contract with Kenya’s logistics future. We’re done with firefighting. This is about leading from the front,” said KIFWA National Chairman Fredrick Aloo.

The 2025-2030 strategic plan focuses on digitising processes, shaping policy, promoting sustainability, and securing value for the agents, also referred to as custom agents.

Mr Aloo stressed the critical role of Information and Communication Technology (ICT) in enhancing logistics competitiveness, particularly in supporting just-in-time production and delivery.

“Traders need fast, predictable, and timely release of goods,” he said, adding that improved transport infrastructure is essential to reduce high transaction costs.

The logistics sector also grapples with frequent changes in customs procedures, complex documentary requirements, and high information-processing costs, which create an unpredictable business environment.

In recent years, the number of agents has shrunk from 2,000 in 2004 to 1,200 due to the digitisation of cargo clearance at the port of Mombasa and ethical questions among some agents.

KIFWA hopes the plan will also enhance efficiency and cut costs across the entire value chain to enable its members to compete with multinationals that have established one-stop shops at the Mombasa port.

Following the successful court battles against Section 16(1) of the Merchant Shipping Act, 2009 (Cap 389), shipping lines are offering clearing and forwarding and other logistical services.

These provisions, which barred the shipping lines from providing land-based services, were, however, challenged and declared unconstitutional by the High Court following cases filed by the liners.

The agents’ services were also affected by the Kenya Ports Authority (KPA) and the Kenya Revenue Authority (KRA) online cargo processing and clearance at the Mombasa port.

The strategy, unveiled by the Cabinet Secretary for ICT and the Digital Economy William Kabogo, marks a turning point for KIFWA, signalling its shift from a reactive role to a sector leader with a clear agenda.

At the heart of the plan are professional self-regulation and compliance, introducing strict ethical and operational standards for industry players and transparent and member-centred governance.

Others are fostering inclusive and accountable leadership, institutional and financial sustainability, and ensuring that the organisation is well-resourced to grow membership.

The lobby will also encourage the use of evidence-based advocacy and policy engagement, positioning it as an influential voice in national and regional logistics policymaking.

In keeping with the industry trends, KIFWA will also promote environmentally sustainable practices to reduce the sector’s carbon footprint and digitisation of operations by embracing new technology to streamline workflows, boost transparency, and enhance competitiveness.

Each pillar comes with clear deliverables, timelines, and performance indicators—laying a foundation for what Aloo called “a bold and measurable revolution” in freight and warehousing.

KIFWA’s confidence is rooted in a solid track record. The association has over 1,200 freight firms handling more than 35 million tonnes of cargo annually, contributing an estimated nine per cent to Kenya’s GDP, valued at $11.3 billion (Sh1.4 trillion) as of 2024.

“I applauded KIFWA for aligning its strategy with the government’s Digital Economy Blueprint. ICT is no longer optional in trade facilitation. KIFWA’s plan is timely and smart,” said CS Kabogo.

KRA Deputy Commissioner of Customs and Border Control Chege Macharia said KIFWA’s plan promotes predictability, transparency, and efficiency in cargo clearance.

The customs and clearing agents collected Sh879 billion in revenue last year, nearly a third of the taxman’s national collections.

Shippers Council of East Africa (SCEA) Chief Executive Agayo Ogambi said: “The plan is a rope to climb—or a noose if we fail. It offers a scorecard not just for KIFWA but for the entire East African logistics ecosystem.”

Federation of East Africa Freight Forwarders Association (FEAFFA)’s technical advisor and KIFWA’s founding CEO John Mathenge urged other regional associations to emulate the initiative.

“This is what leadership looks like. Let’s build stronger internal systems and pursue transformative agendas.”

FEAFFA includes freight associations from all EAC Partner States, except Somalia and DR Congo, and represents over 2,500 licensed firms in the region. 

KRA Commissioner General Humphrey Wattanga said they are encouraged by the plan’s emphasis on professionalism, policy advocacy, digital transformation and stakeholder collaboration.

“The future of customs lies in smart systems, data-driven risk management and fully automated processes. As part of our modernisation agenda, we plan a major upgrade of the iCMS in the Financial Year 2025-2026,” said Mr Wattanga.

In response to the association’s challenge with the business environment, KRA has said KIFWA and its members are equally instrumental in creating a more predictable, transparent and efficient trading environment.

In the financial year ended June, KRA collected over Sh2.57 trillion in revenue. Customs revenue accounted for more than Sh879 billion of this amount.

“This achievement is partly attributable to the diligence and accuracy of freight forwarders in customs declarations,” said the KRA boss.

As global trade and logistics continue to evolve, KRA has urged the logistics agents to position themselves as a responsive and forward-looking institution.

As of 2024, the industry’s estimated value stood at $11.3 billion (Sh1.4 trillion), compared to the country’s GDP of $124.5 billion (Sh16 trillion).

The sector has over 1,200 registered clearing and forwarding firms, the majority being SMEs.

It also handles more than 35 million tonnes of goods annually, underscoring its critical role in trade facilitation and national development.