Competition Authority rejects call to reserve 60% of transport services for local firms

The Competition Authority of Kenya (CAK) has declined a request to reserve 60 per cent of transport services for local firms, saying that such a move would violate competition laws.

The request, brought forward by the Kenya Transporters Association (KTA), was aimed at addressing concerns over alleged discrimination by multinational logistics companies.

KTA had petitioned the National Assembly’s Departmental Committee on Trade, Industry and Cooperatives, raising alarm over what it termed systemic discrimination by multinational companies in the logistics space.

In its March 2024 submission, KTA claimed that although local firms own 90 per cent of trucks in Kenya, they receive less than 30 per cent of transport contracts.

The association also decried the alleged repatriation of profits by the foreign companies, adding that some shipping lines control almost every part of the logistics chain, from shipping to clearing and transporting goods. This then makes it hard for Kenyan businesses to compete.

Acting on the petition, the committee requested the Competition Authority of Kenya to review the complaints, and after screening the submissions made by the transporters' association, the authority has concluded that while the concerns warrant a deeper investigation, the proposal to reserve 60 per cent of contracts for local firms would violate competition laws.

The authority has now launched a full probe into the conduct of major logistics players, including Maersk, the Mediterranean Shipping Company, and even the Pacific International Line. A detailed report is expected to be submitted to Parliament by the end of September.