Articles

Kenya Electronic Cargo Monitoring System

Track Team

The Kenya Revenue Authority's (KRA) decision to implement an electronic cargo tracking and security system (ECTS) was a response to the government's interest in improving tax collection, enhancing enforcement of cargo handing regulations, and maintaining Kenya as the preferred trade route for cargo in East Africa. These improvements were critical to support national initiatives aimed at promoting trade within the region. Among these initiatives were the reduction of import taxation, which accounts for roughly 35% of total tax revenues in Kenya, and the creation of an East Africa Free Trade Zone.

With the ensuing economic pressure from the reduction in cargo taxes, ensuring the proper collection of Customs duties became a top government priority.

Through the ECTS, the KRA will improve its revenue collection processes, increase the efficiency of its cargo handling procedures, and employ advanced technologies to facilitate better reporting and data mining capabilities for operational decision making.

The ECTS covers trade routes that extend from the port at Mombasa to the Free Zones within Kenya, and from the port via the country's main transportation routes to neighboring landlocked countries, including Uganda, Rwanda, Burundi, and southern Sudan. As the primary port for East and Central Africa, Mombasa handles approximately 13 million metric tonnes (mt) of cargo annually, including 3 million mt of transit cargo. With this amount of Customs activity, the KRA faced a number of formidable challenges, including finding ways to:

• cope with the loss of tax revenue due to illegal cargo dumping
• better secure all transit goods crossing Kenya
• increase cargo throughput by eliminating physical escorts for transit goods
• optimise KRA processes and to reduce human intervention by automating the collection of essential data
• develop more advanced reporting to facilitate operational decision making
• maintain Kenya's competitiveness as the preferred port for East and Central Africa.

The KRA's plans called for one of the most unique and sophisticated realtime cargo tracking and security systems in the world. The business requirements included real- time monitoring of all goods in transit, securing transit cargo with tamper-proof electronic seals, integration of sensors to detect cargo security, and alarming of unauthorized access. To accomplish this, Hi-GTek Inc. engineered a system that fully integrated the KRA's legacy systems and procedures with Hi-G-Tek's sophisticated cargo security and monitoring technology.

A Public/Private Partnership

The KRA chose to develop the ECTS via a public/ private partnership, rather than solely as a public initiative. Within this partnership, the KRA sets policies and operates the ECTS infrastructure, while the private partner supplies and installs the tracking and sensing devices for the transporters, manages the software application and provides ongoing maintenance.

The KRA awarded the tender to Hi-G-Tek in 2 07 because of its broad portfolio of electronic seals and security devices, significant wireless expertise, and patented cargo tracking, sensing and security technologies. Hi-G-Tek partnered with a local Kenya logistics company, Navisat Telematics Ltd, to manage the supply of Hi-G-Tek's electronic seal and tracking device, perform installations for the transporters and for the KRA, and to provide ongoing in-country maintenance.

The ECTS system

The ECTS is based on active radio frequency identification (RFID), global positioning system (GPS), and general packet radio service (GPRS) technologies and uses Hi-G-Tek's electronic seals with locking capabilities, called Hi-G-Locks which are well suited for the KRA's objective of securing and tracking individual containers, rail shipments tanker trucks, and other methods of cargo transport. The KRA operates the ECTS infrastructure, maintaining a standard set of operational procedures to manage the handling of the flow of cargo, while Hi-G-Tek provides the following system components and support:

• cargo tracking and monitoring solution (CTMS): the software platform that accepts and manages data from the tracking devices and sensors. The software filters event data by applying KRA’s business rules, generates actionable alarms, stores history data for analysis, and creates management reports.
• Hi-G-Locks, tracking device (data readers) with GPS and GPRS for the transporters; handheld and micro-readers for inspectors
• personnel who install Hi-G-Locks and tracking devices, manage the software application and provide round-me-clock operational support.

How It Works

The ECTS implementation occurs at the Port of Mombasa as container goods are unloaded from ships and prepared for transport to internal FreeZones or across Kenya to neighboring countries.

Cargo transporters equip their trucks with the required tracking system. KRA officials seal the cargo at the port and use a special short range terminal to write the necessary data into the Hi-G-Lock, including the manifest, delivery details, and route information. By affixing the programmed Hi-G-Locks to specific containers, they create electronically bonded secured cargo. The specific geo-fenced route is embedded within the ECTS database. As a truck leaves the area, the fixed tracking reader at the gate records the container departure information and reports the details to the KRA's operations centre. In turn, the ECTS notifies all relevant checkpoints and the destination station of the expected arrival times for the cargo. If there are any deviations from the route, expected arrival times, or unauthorized tampering activities, the KRA’s operations centre will receive real time alerts.

The Benefits

The implementation of the ECTS was completed in the spring of 2010 and transit cargo vehicles are now mandated to use the system.

In addition to the KRA, a variety of stakeholder, including the Kenya Port Authority, transporters, cargo insurers, the Kenya Bureau of Standards, and importers/ exporters, are beneficing from the system. The benefits to Kenya span multiple categories that are economic, security, and operational.

Economic Benefits

Given the percentage of total tax revenues accounted for by Customs collections, the KRA's ability to assure revenue collection and enforce regulations will have a significant impact on the country's economic development. This has become increasingly important with the advent of the five-nation East Africa Free Trade Zone on July 1, 2010.

With the elimination of the requirement for physical escort of transit goods to/from Mombasa, cargo throughput is faster and more efficient. This eliminates the constraints in the number of trips per month per truck, which impacts the transportation sector positively. Costs are expected to fall significantly, perhaps as much as 30%-40%. In turn, consumer prices should also fall over time. As the efficiency of its cargo transport process increases, Kenya has the opportunity to maintain its position as the preferred port for East and Central Africa.

Security Benefits

The KRA now more thoroughly controls the ' chain of custody of in-transit cargo from origin to destination. This increases the KRA's ability to prevent theft and contamination, thus providing quality assurance of the cargo itself.
Operational Benefits

The' KRA receives secure shipment data from origin to destination without having to rely on unnecessary human intervention or third parties, improving reliability and performance.

Furthermore, automated data collection and data mining capabilities give the KRA enhanced repotting and tools for better operational decision making.

 

Looking to the Future

The KRA is already beginning to consider opportunities to expand the ECTS. It is particularly interested in extending the system's reach to include goods produced domestically for export.

Additional areas of interest include integration with regional revenue authorities and additional stakeholders, such as the insurance industry; the ability to verify that duties have been paid on local cargo leaving the port; and the monitoring of goods that move by rail. Equally important, from a security perspective, the KRA believes the ECTS will mitigate the country's vulnerability to terrorism, as well as the global threat increases.

Micha Auerbach is the CEO of Hi-G-Tek, Inc., a leading company in electronically tracking and securing high-value cargo. 

Contact:
Keith Nalepka
Hi-G-Tek Inc.
Tel: 1 (888)9HIGTEK or 1(888)944-4835 
Email: info@higtek.com
Web: www.higtek.com