Effect of Customs Administration Strategies on cross border logistics efficiency in East Africa Member Countries ( A Case of Kenyan borders with Uganda and Tanzania)

Abstract

The customs administration is one of the fundamental elements of the international business cycle. Developing an efficient cross border logistics has been a major challenge by East African countries. There has been frequent cases of delays, lack of leadership, low capacity and theft of cargo. The main purpose of the research study was to establish the effect of customs administration on cross border logistics efficiency among East African member states. The study was guided by four objectives: To determine the effect of custom harmonization on cross border logistics efficiency at the Kenyan borders. To evaluate the effect of customs automation on cross border logistics efficiency at the Kenyan borders. To assess the effect of customs cross-border management on cross border logistics efficiency at the Kenyan borders. To evaluate the effect of capacity improvement on cross border logistics efficiency at the Kenyan borders. The study was guided by three theories namely; Theory of Customs Union, Theory of Economic Integration and Trade Theory. The study used an explanatory research design and the total population for the study was Uganda and Tanzania borders, These are; Holili, Isebania, Loitokitok, Lunga Lunga, Namanga, Taveta, Busia, Lokitanyala, Lwakhakh, Malaba and Suam. The study targeted 51 senior staff, 94 middle management staff and 141 junior staff. The sample size was 47 senior staff, 92 middle management staff and139 junior staff. Questionnaires were the major data collection instruments. The data was analyzed using descriptive and further inferential statistics including correlation and regression analysis. The findings show a strong and positive relationship between custom harmonization and cross border logistics efficiency. The relationship is significant (r = 0.330, p<0.01). There was a strong and positive relationship between custom automation and cross border logistics efficiency. The relationship was significant at (r = 0.296, p<0.01). There was a strong and positive relationship between cross-border management and cross border logistics efficiency. The relationship is significant at (r = 0.468, p<0.01). There was a very strong and positive relationship between capacity improvement and cross border logistics efficiency. The relationship is significant at (r = 0.329, p<0.01). The results of multiple regression analysis shows that the value of R 2 is 0.574, revealing 57.4% variability in factors relating to custom harmonization, custom automation, cross border management and capacity improvement accounted to cross border efficiency. This model implies that every per unit increase in custom harmonization leads to 0.193 increase in cross border logistics efficiency. An increase in custom automation leads to 0.096 increase in cross border efficiency. A unit increase in cross border management leads to 0.310 increases in cross border efficiency. A unit increase in capacity improvement leads to 0.225 increase in cross border logistics efficiency. The study concluded that there has been little improvement in cross border logistics efficiency. Automated coding system has greatly improved cross border logistics efficiency. Centralized customs among the member countries has made movement of goods more efficient.. The study recommended that member states should come up with a policy that reduces time of clearing goods by harmonizing the custom procedures. East Africa member states should improve on automated system to ensure that it identifies all goods passing through the border posts. EAC member states should come up with policies that eliminate gaps in sharing of information. East African member states should regularly train their staff on emerging trend in cross border logistics management.