Kenya Logistics and Warehousing Market Outlook to 2029

The report titled “Kenya Logistics and Warehousing Market Outlook to 2029 - By Market Structure, By Providers, By Types of Warehousing, By Transportation Mode, By Age of Consumers and By Region” provides a comprehensive analysis of the logistics and warehousing market in Kenya. The report covers an overview and genesis of the industry, overall market size in terms of revenue, market segmentation; trends and developments, regulatory landscape, customer level profiling, issues and challenges, and comparative landscape including competition scenario, cross comparison, opportunities and bottlenecks, and company profiling of major players in the Logistics and Warehousing Market. The report concludes with future market projections based on revenue, by market, service types, region, cause and effect relationship, and success case studies highlighting the major opportunities and cautions.

Kenya Logistics and Warehousing Market Overview and Size

The Kenya logistics and warehousing market reached a valuation of KES 180 Billion in 2023, driven by the increasing demand for efficient supply chain solutions, growing e-commerce activities, and the expansion of regional trade. The market is characterized by major players such as Bolloré Africa Logistics, DHL Kenya, Freight in Time, and Siginon Group. These companies are recognized for their extensive logistics networks, diverse service offerings, and customer-focused solutions.

In 2023, Bolloré Africa Logistics expanded its warehousing capacity in Nairobi, responding to the growing need for modern storage facilities in the region. Nairobi and Mombasa are key markets due to their strategic locations and robust infrastructure.

Market Size for Kenya Logistics and Warehousing Industry on the Basis of Revenue in USD Billion, 2018-2023

Source: TraceData Research Analysis

What Factors are Leading to the Growth of the Kenya Logistics and Warehousing Market:

• Economic Growth and Infrastructure Development: The sustained economic growth in Kenya has led to significant investments in infrastructure, which has boosted the logistics and warehousing sector. In 2023, logistics services accounted for approximately 12% of Kenya's GDP, driven by enhanced transportation networks and modern warehousing facilities. This growth is particularly noticeable in urban and industrial areas where improved infrastructure has facilitated smoother logistics operations.

• Expansion of E-commerce: The rapid growth of e-commerce in Kenya has been a major driver for the logistics and warehousing market. With the e-commerce sector growing by 20% in 2023, there has been an increased demand for efficient logistics solutions to handle the surge in online orders. Warehousing facilities have expanded to accommodate the storage and quick distribution of goods, particularly in major urban centers.

• Strategic Regional Position: Kenya's strategic location as a gateway to East and Central Africa has solidified its role as a key logistics hub in the region. The increasing trade activities within the East African Community (EAC) and the expansion of regional trade agreements have driven the demand for sophisticated logistics and warehousing services. In 2023, regional trade accounted for nearly 30% of the logistics market in Kenya, highlighting the importance of Kenya's position in regional supply chains.

Which Industry Challenges Have Impacted the Growth of the Kenya Logistics and Warehousing Market:

• Infrastructure Deficiencies: Despite ongoing improvements, infrastructure gaps, particularly in rural areas, remain a significant challenge for the logistics and warehousing sector. According to a recent industry survey, approximately 35% of logistics providers report difficulties due to poor road conditions and limited rail connectivity. These deficiencies can lead to higher transportation costs and delays, which negatively impact the efficiency of logistics operations and hinder market growth.

• Regulatory Complexities: Stringent regulations concerning customs clearance and import/export procedures create bottlenecks in the logistics chain. In 2023, it was reported that around 20% of shipments experienced delays due to compliance issues with regulatory requirements. These regulations, while necessary for maintaining standards, can impose significant operational burdens, particularly on smaller logistics companies, increasing their costs and complicating their ability to compete.

• Security and Safety Concerns: Security challenges, including cargo theft, hijacking, and vandalism, pose risks to logistics operations. Data indicates that approximately 25% of logistics providers have faced security-related incidents in the past year, leading to substantial financial losses. These safety concerns not only increase operational costs due to the need for enhanced security measures but also deter potential investments in the sector.

What are the Regulations and Initiatives which have Governed the Market:

• Trade Facilitation Regulations: The Kenyan government has implemented various trade facilitation measures to streamline logistics operations and reduce delays in customs clearance. These regulations include the Kenya TradeNet System, which integrates various government agencies involved in trade, providing a single window for processing import and export documentation. In 2023, approximately 85% of shipments processed through this system experienced reduced clearance times, indicating improved efficiency in logistics operations.

• Infrastructure Development Initiatives: To enhance the logistics and warehousing sector, the Kenyan government has prioritized infrastructure development, including the expansion of the Standard Gauge Railway (SGR) and the modernization of the Port of Mombasa. These initiatives aim to improve the transportation network and reduce logistical bottlenecks. In 2023, the completion of key infrastructure projects contributed to a 15% increase in the efficiency of goods movement across the country.

• Environmental Regulations: The government enforces environmental regulations to promote sustainable practices within the logistics and warehousing sector. These regulations include requirements for energy-efficient warehousing and the adoption of eco-friendly transportation methods. In 2023, about 20% of logistics companies adopted green logistics practices in compliance with these regulations, contributing to a reduction in the sector's carbon footprint.

Kenya Logistics and Warehousing Market Segmentation

Freight Forwarding: The country's F&B, FMCG, and industrial sectors contributed significantly to the expansion of Kenya's freight forwarding market, particularly for the foreign market. Due to the expansion of the road infrastructure, it was found that freight by road was the most desired mode of transportation, followed by freight by air and sea. There are numerous tough places and isolated areas in Kenya that are inaccessible by any other kind of transportation. In terms of revenue, the Asia flow corridor was shown to be the biggest source in the Kenyan freight forwarding industry. 

Warehousing: Kenya's warehousing business has expanded slowly since there is an extreme shortage of high-caliber, contemporary warehouse space. One of the major areas of logistics development that needs more funding and technological innovation is warehousing. The development of automation technology and increasingly sophisticated inventory management systems is anticipated to contribute to the expansion of the warehousing market. 

CEP Market: The market for CEP logistics expanded at a positive CAGR from 2018 to 2023. Online shoppers are increasingly expecting faster ways to receive their packages and easier ways to return items. Since most customers consider express delivery to be a premium service, they generally prefer conventional delivery. Despite the difficulties, several foreign companies, including DHL, Aramex, and FedEx-TNT, have entered the sector. Future growth in the express delivery market will be driven by the rise of e-commerce and the need for speedier delivery options. 

Competitive Landscape in Kenya Logistics and Warehousing Market

The Kenya logistics and warehousing market is moderately concentrated, with several key players dominating the space. However, the entrance of new firms and the expansion of regional and global logistics providers have diversified the market, offering consumers more choices and services.

Some of the recent competitor trends and key information about competitors include:

• Bolloré Africa Logistics: As one of the leading logistics providers in Kenya, Bolloré recorded a 20% increase in warehouse utilization in 2023, driven by the expansion of e-commerce and the growth of regional trade. The company’s extensive network and investment in technology have made it a preferred choice for many businesses.

• DHL Kenya: DHL Kenya continues to be a market leader, particularly in express logistics services. In 2023, DHL expanded its cold chain logistics services to cater to the growing demand from the pharmaceutical and food sectors.

• Freight in Time: Known for its strong presence in East Africa, Freight in Time reported a 15% growth in revenue in 2023. The company has focused on expanding its warehousing capacity and enhancing its last-mile delivery services.

• Siginon Group: Siginon Group, with its strong presence in Mombasa, saw a 12% increase in its logistics operations in 2023. The company’s strategic location near the Port of Mombasa and its investment in modern warehousing facilities have contributed to its growth.

What Lies Ahead for Kenya Logistics and Warehousing Market?

The Kenya logistics and warehousing market is projected to grow steadily by 2029, exhibiting a respectable CAGR during the forecast period. This growth is expected to be fueled by economic factors, the expansion of e-commerce, and increasing regional trade.

• Shift Towards Green Logistics: As environmental sustainability becomes a priority, there is an anticipated shift towards green logistics practices. Companies are expected to invest in energy-efficient warehousing, electric vehicles, and other eco-friendly solutions.

• Integration of Technology: The integration of advanced technologies such as AI, IoT, and big data analytics in logistics operations is expected to provide companies with more accurate and real-time data, improving efficiency and reducing costs.

• Growth of Cold Chain Logistics: The market is seeing a growing demand for cold chain logistics, driven by the expanding food and pharmaceutical sectors. Companies that can offer reliable and efficient cold storage solutions are expected to capture significant market share.

• Focus on Infrastructure Development: Continued investment in infrastructure, particularly in road and rail networks, is expected to improve logistics efficiency and reduce transportation costs, benefiting the overall market.

Future Outlook and Projections for Kenya Logistics and Warehousing Market on the Basis of Revenues in USD Billion, 2024-2029

Source: TraceData Research Analysis

Kenya Logistics and Warehousing Market Segmentation

Freight Forwarding Market

• By Mode of Transportation  

• Road Freight (Fleets, Volume, FTK, Price/ton/km and Revenue)
• Sea Freight (Fleets, Volume, Average Distance, Price/ton/km and Revenue)
• Air Freight (Volume, Average Distance, Price/ton/km and Revenue)
• By Road transportation
• Less than Truck load (Revenue and Volume)
• Full truck load (Revenue and Volume)
• By End Users (Revenues)
• Food & Beverages
• Textiles and Footwear 
• Chemicals
• Pharmaceuticals and Medical consumables
• Electronics
• Others include agricultural products, frozen meat and more

Warehousing Market

• By Business Model (Revenue, Price/sqm, warehousing space, Occupancy rate)

• Industrial/Retail

• CFS/ICD

• Cold Storage 

• Agriculture

• By Industrial warehouses (Revenues)

• Grade A 

• Grade B

• Grade C and others 

• By End Users (Revenues)

• Food & Beverages

• Textiles and Footwear 

• Chemicals

• Pharmaceuticals and Medical consumables

• Electronics

• Others include agricultural products, frozen meat and more

CEP Market

• By Channel

• 3PL Players

• E-Commerce Merchants

• By Type of Shipments

• Domestic Shipments

• International Shipments

• By Area of Delivery

• Intercity

• Intracity

• By Mode

• Air Shipments

• Ground Shipments

• By Delivery Period

• Same Day Delivery

• 1-2 Day Delivery

• 3-4 Day Delivery

• More than 4 Day Delivery

• By Type of Products

• Consumer Electronics & Media

• Fashion & Accessories

• Foods & Personal Care

• Home Care & Furniture

• Toys & Baby Products

• Others (Video Games, Digital Music, Pet Care, Home Gardening, etc.)

Players Mentioned in the Report:

• DHL Kenya

• Siginon Group

• Kenya Airways Cargo

• Bolloré Logistics

• Freight Forwarders Kenya

• G4S Kenya

• Maersk Kenya

• Kuehne + Nagel Kenya

• UPS Kenya

• Roy Transmotors Ltd.

Key Target Audience:

• Logistics Providers

• Warehousing Companies

• E-commerce Companies

• Regulatory Bodies (e.g., Kenya Revenue Authority)

• Research and Development Institutions

Time Period:

• Historical Period: 2018-2023

• Base Year: 2024

• Forecast Period: 2024-2029