The Standard Gauge Railway and Performance of Logistics Firms in Kenya

Abstract

This research aims at determining the effects that the Standard Gauge Railway (SGR) has on the performance of logistics firms in Kenya. This research paper aims at exploring the efficiency and cost optimization of the logistics sector in relation to SGR; the problems and possibilities of the new system. An analysis with a quantitative research design approach involving closed-ended questions was used and data collected from logistics firms in Kenya. The data collected was statistically tested for internal consistency using Cronbach’s alpha tests for SGR-related variables and logistic performance indicators leveraging on correlation analysis, Multiple regression models, and ANOVA respectively. This paper presents empirical evidence that shows the SGR has had a positive impact on logistics performance with regard to transit time and cost. Such enhancements highlight the relative advantage whereby SGR has benefited aspect of the firm by enhancing operations’ efficiency and competitiveness of logistics sub-sector. However, the study also reveals some weaknesses like data source bias and low generalization owing to limited coverage of samples. The study finds that the SGR is an essential asset for the improvement of the logistics industry in Kenya, including the potential for increased productivity improvements. Suggested measures can include such practises as frequent use of more broadly inclusive data collection methods, identifying and including in the study additional representative logistics firms, and the development of policies purposely designed to optimise the deliverables of the SGR. These findings enhance the SGR logistics value for strategic management decision making within the logistics sector, thus leading to optimal utilization of the SGR.