Determinants of dry port performance in Kenya: A case of the internal container depot, Nairobi

Abstract

In view of the global outlook, the rising number of container throughput and traffic globally has affected the functionality of seaports necessitating the emergence of dry ports. Dry ports have become an essential medium for seaports to solve the problem of rapid changes in globalization with the need to fulfill economies of scale and scope in the international market. Since the introduction of dry ports, there has been a lot of considerations with concern to Inland Container Depots targeted at improving port operations with an aim of making global trade more efficient and effective to all stakeholders. This study looked at the factors used by Embakasi dry port in optimizing its purpose as a way of providing solution to trade facilitation and ensuring there is free flow of containers at the Seaport in Mombasa. In particular, the study interrogated the determinants of dry port performance with a view of improving revenue collection. The explanatory variables used in this research project were Information Communication Technology, infrastructure, capacity of personnel and stakeholder cooperation. Hypothesis were formulated so as to describe an unknown but a tentative answer to what the research considered ought to be the possible outcome of an existing problem. Theories covered in this research project were the stakeholder theory, institutional theory and the theory of agency. The research used explanatory research design. Data collected was primary data through an ordinal scale involving close-ended structured questionnaires. The target population of the study consisted of 838 participants in international trade comprising of senior managers of Kenya Revenue Authority (KRA) customs and border control department, clearing and forwarding agents, and senior managers of Kenya Ports Authority (KPA). Sample size of 271 participants was selected using stratified random sampling technique. Data was collected at the Internal Container Depot (ICD) Nairobi and KRA headquarters, Nairobi for the financial year 2018/2019. The study employed descriptive and inferential statistical analysis to determine the relationship between variables using Statistical Package for Social Scientists (SPSS). In particular, correlation analysis and multiple regression analysis were used. The results are presented in the form of tables, and figures. The results of the multiple regression analysis revealed that Information Communication Technology (β1=0.141, p<0.05), infrastructure (β2=0.565, p<0.05), capacity of personnel (β3=0.094, p<0.05) and stakeholder cooperation (β4= 0.22, p<0.05) had a significant and positive influence on the performance of the dry port as p-values of the respective variables were less than 0.05. The model summary results revealed that there was a 77.2% variation in the performance of the dry port due to changes in Information Communication Technology, infrastructure, capacity of personnel and stakeholder cooperation. The study therefore concluded that that Information Communication Technology, infrastructure, capacity of personnel and stakeholder cooperation had a positive and significant effect on the performance of dry port. Therefore, KRA should develop a policy that enhances infrastructural development within the dry port through the construction of better facilities and foster useful collaborations and linkages with other border agencies involved in the process of customs clearance. The research suggested that future studies can evaluate the political, economic, social, technological, environmental and legal factors determining the performance of a dry port.