Transport and Logistics Agreement (Kenya)

A Transport and Logistics Agreement in Kenya governs the relationship between the parties by fixing what each must do.

The Traffic Act Cap. 403 and the Traffic (Amendment) Act No. 42 of 2012 regulate the operation of motor vehicles on public roads in Kenya, including goods vehicles. Every logistics provider transporting goods by road in Kenya must hold a valid operating licence under the Traffic Act Cap. 403 issued by the National Transport and Safety Authority (NTSA), established under the National Transport and Safety Authority Act No. 33 of 2012. The NTSA also enforces axle load limits under the Traffic (Maximum Loads) Regulations to protect road infrastructure.

The Kenya Transport Association (KTA) and the Kenya Transporters Association serve as industry bodies, and many logistics contracts in the Kenyan market reference their standard terms as baseline conditions. Large-scale logistics operations involving cross-border trade with Uganda, Tanzania, Rwanda, Burundi, and South Sudan within the East African Community (EAC) are also subject to the EAC Customs Management Act 2004 and the EAC Common Market Protocol.

The Kenya Ports Authority Act Cap. 391 and the Kenya Maritime Authority Act No. 21 of 2006 govern maritime transport and port operations at the Port of Mombasa — East Africa's largest port — and Lamu Port. Logistics agreements that include an international sea freight component must address port handling, Customs clearance under the East African Community Customs Management Act 2004 administered by the Kenya Revenue Authority (KRA), and the Standard Group or INCOTERMS delivery conditions applicable to the shipment.

The Competition Act No. 12 of 2010, administered by the Competition Authority of Kenya (CAK), prohibits anti-competitive practices in the transport sector, including price-fixing among logistics providers. The Consumer Protection Act No. 46 of 2012 applies where logistics services are supplied to individual consumers.

Liability for loss, damage, or delay to goods in transit is a central issue in any Transport and Logistics Agreement Kenya. The common law position — recognised under the Law of Contract Act Cap. 23 — is that a carrier is a bailee of the goods and owes the shipper a duty to take reasonable care. An exclusion or limitation of liability clause in a logistics agreement must be clearly and unambiguously worded to be effective, and unreasonably onerous exclusion clauses may be challenged under general contractual principles before the High Court of Kenya. Cargo insurance — typically obtained through an insurer licensed by the Insurance Regulatory Authority (IRA) under the Insurance Act Cap. 487 — is the standard commercial mechanism for managing cargo loss risk in Kenyan logistics agreements.

A Transport and Logistics Agreement Kenya is required whenever a business or individual engages a transport or logistics provider on a recurring or substantial basis for the movement of goods within or through Kenya.

A Transport and Logistics Agreement is needed when a Kenyan manufacturer contracts with a road freight company to distribute finished goods from a factory to retail outlets or regional distribution centres across Kenya's 47 counties. The agreement governs collection schedules, vehicle requirements, temperature controls (for perishable goods), delivery confirmation procedures, and liability for cargo damage or short delivery.

A Transport and Logistics Agreement is required when an importer clearing goods through the Port of Mombasa engages a clearing and forwarding agent under the East African Community Customs Management Act 2004 to handle Customs clearance, port handling, and onward inland transportation to Nairobi or up-country destinations via the Standard Gauge Railway (SGR) or road. The agreement should address responsibility for Customs duties, demurrage charges, and KRA excise compliance.

A Transport and Logistics Agreement is needed when an agricultural cooperative or a flower farm in the Rift Valley engages a cold-chain logistics provider to transport fresh produce or flowers to Nairobi's Jomo Kenyatta International Airport (JKIA) for export. Kenya is Africa's largest fresh flower exporter, and cold-chain logistics agreements must specify temperature bands, transit time guarantees, and compensation for temperature excursions that render cargo unsaleable.

A Transport and Logistics Agreement is required when an e-commerce retailer operating on Jumia, Kilimall, or a proprietary platform contracts with a last-mile delivery operator to fulfil consumer orders across Kenya's urban and peri-urban areas. The agreement must address proof of delivery documentation, cash-on-delivery handling, return logistics, and service level agreements for delivery turnaround times.

A Transport and Logistics Agreement is needed when a construction company contracts with a heavy haulage provider to transport construction equipment, prefabricated materials, or steel to a project site under a Government of Kenya infrastructure contract. Such agreements must address NTSA oversize load permits under the Traffic Act Cap. 403, route surveys, and police escorts where required for exceptionally large loads. Under Kenya law, Section 3 of the Companies Act 2015 (No. 17 of 2015) and Section 2 of the Law of Contract Act (Cap 23) govern the core requirements for this type of document.

A Kenya Transport and Logistics Agreement under the Law of Contract Act Cap. 23 and the Traffic Act Cap. 403 must contain the following essential elements to protect both the shipper and the logistics provider.

Parties and Authorisations: Full names, addresses, and registration details of the shipper and the logistics provider; confirmation that the logistics provider holds a valid operating licence from the National Transport and Safety Authority (NTSA) under the National Transport and Safety Authority Act No. 33 of 2012; and, where the provider handles customs clearance, confirmation of licencing as a Customs agent by the Kenya Revenue Authority (KRA) under the East African Community Customs Management Act 2004.

Scope of Services: A precise description of the logistics services to be provided — road freight, warehousing, Customs clearance, last-mile delivery, cold-chain management, hazardous materials handling, or a combination. The scope should specify the origin and destination points, the types of cargo covered, estimated volumes or tonnages per period, and any special handling requirements such as refrigeration temperature ranges, fragile cargo protocols, or dangerous goods classification under the Explosives Act Cap. 115.

Vehicles and Equipment: The category and specification of vehicles to be used (rigid trucks, articulated vehicles, refrigerated vans, tankers), compliance with NTSA roadworthiness and licensing requirements under the Traffic Act Cap. 403, and the NTSA Goods Vehicle Licence number. For cold-chain transport, the required temperature monitoring equipment and calibration records should be specified.

Freight Rates, Surcharges, and Payment: The freight rate structure — per trip, per kilometre, per tonne, or a combination; fuel surcharge mechanisms linked to the Energy and Petroleum Regulatory Authority (EPRA) published pump prices; demurrage and waiting time charges; and payment terms. Rates should be stated in Kenya Shillings (KES), with a mechanism for periodic review linked to fuel price fluctuations or the Consumer Price Index published by the Kenya National Bureau of Statistics (KNBS).

Cargo Liability: The basis of the logistics provider's liability for loss, damage, or delay to cargo — whether common law bailee liability, limited liability per kilogramme, or declared value liability. The limitation of liability clause must be clearly expressed. The shipper should confirm that cargo is covered by marine cargo or goods-in-transit insurance issued by an insurer licensed by the Insurance Regulatory Authority (IRA) under the Insurance Act Cap. 487, stating the policy number and insured value.

Delivery Procedures and Proof of Delivery: Collection procedures, transit time standards, delivery notification requirements, and the form of proof of delivery (POD) — whether a signed delivery note, an electronic signature via a mobile app, or a delivery receipt stamped by the consignee. Disputed deliveries should trigger a defined escalation and claims procedure.

Subcontracting and Owner-Operators: Whether the logistics provider may subcontract services to owner-operators or third-party carriers, and if so, the flow-down of obligations — particularly insurance and NTSA licensing — to subcontractors. The shipper should retain the right to approve subcontractors for high-value or sensitive cargo.

Force Majeure and Road Conditions: A force majeure clause addressing events beyond the logistics provider's control — including road closures, floods, government curfews, or security incidents — and the notification and mitigation obligations of each party. Kenya's road infrastructure conditions, particularly during rainy seasons in certain corridors, may justify specific provisions for route variations and extended transit times.

Dispute Resolution and Governing Law: The agreement is governed by the laws of Kenya. Disputes may be referred to mediation under the Mediation Act No. 21 of 2012, arbitration at the Nairobi Centre for International Arbitration (NCIA) under the Arbitration Act No. 4 of 1995, or litigation before the Commercial Division of the High Court of Kenya. The forms-legal.com Kenya Transport and Logistics Agreement template covers all mandatory elements under the Law of Contract Act Cap. 23 and the Traffic Act Cap. 403. Under Kenya law, Section 3 of the Companies Act 2015 (No. 17 of 2015) and Section 15 of the Employment Act 2007 (No. 11 of 2007) govern the core requirements for this type of document.