How to Start a Transport and Logistics Company in Kenya

Kenya's strategic position as East Africa's economic hub makes transport and logistics one of the most vital and profitable business sectors. The country serves as the primary gateway for goods entering landlocked neighbours including Uganda, Rwanda, Burundi, South Sudan, and eastern DRC through the Port of Mombasa and the Northern Corridor highway. With e-commerce growth, expanding manufacturing, and regional trade increasing under the African Continental Free Trade Area (AfCFTA), demand for transport and logistics services continues to surge. This guide covers how to start and grow a transport and logistics company from fleet acquisition to regulatory compliance.

Types of Transport and Logistics Businesses

The sector offers several business models suited to different investment levels:

Freight and haulage: Long-distance transportation of goods using trucks and trailers. Serving routes like Mombasa-Nairobi, Nairobi-Kampala, and Nairobi-Kigali. Investment starts from KES 3-15 million per truck depending on whether you buy new or used vehicles.

Last-mile delivery: Urban and suburban delivery of parcels, e-commerce orders, and retail goods using vans, pickups, and motorcycles. This is the fastest-growing segment driven by online shopping. Startup costs from KES 500,000-5 million.

Courier services: Express document and parcel delivery within and between cities. Can start with as little as KES 200,000-1 million using motorcycles and light vehicles.

Warehousing and distribution: Storing goods and managing distribution to retail points. Requires warehouse facilities costing KES 2-20 million depending on size and location.

Clearing and forwarding: Handling customs clearance for imports and exports at ports and border points. Requires specialised knowledge of customs procedures and a licence from the Kenya Revenue Authority.

Fleet management and brokerage: Connecting cargo owners with truck owners without owning vehicles yourself. A capital-light model requiring technology and relationships rather than heavy equipment.

Business Registration and Licensing

Register your company through the Business Registration Service on eCitizen. A limited company is strongly recommended for liability protection given the high-risk nature of transport operations. Obtain your KRA PIN and register for VAT. The specific licences you need depend on your business model:

Commercial Service Vehicle Operator Licence: Required from the National Transport and Safety Authority (NTSA) for operating commercial vehicles. You must demonstrate that you employ qualified drivers with the appropriate licence categories, maintain vehicles in proper mechanical condition, keep maintenance records for each vehicle for at least two years, conduct regular road safety awareness training for drivers, and have mechanisms to ensure drivers do not exceed eight hours of driving in any 24-hour period.

Vehicle inspection and compliance: All commercial vehicles must pass NTSA inspection and display valid inspection certificates. Vehicles must be fitted with speed governors limiting trucks to 80 km/h. Fleet management systems with GPS tracking are increasingly required for commercial operators.

Customs clearing licence: For clearing and forwarding operations, apply for a customs agent licence from KRA. This requires passing the East African Customs Freight Forwarding Practicing Certificate examination and paying annual licence fees.

County business permits: Single business permit from your county of operation plus any additional transport-specific permits required by the county.

Fleet Acquisition

Your fleet is your primary asset and biggest capital expenditure. Options include:

Buying new trucks: New trucks from manufacturers like Isuzu East Africa, Tata, Mitsubishi, Scania, and Mercedes-Benz range from KES 4-20 million depending on capacity and specifications. New vehicles come with manufacturer warranties and lower maintenance costs initially but require significant upfront capital.

Buying used trucks: Quality used trucks cost 40-60 percent less than new vehicles. Imported used trucks from Japan and the UAE are popular. Ensure thorough mechanical inspection before purchase and verify the vehicle's history. Used trucks typically have higher maintenance costs and shorter remaining useful life.

Asset financing: Banks and equipment financiers offer truck loans with down payments of 20-30 percent and repayment periods of 3-5 years. Interest rates range from 13-18 percent per annum. The truck serves as collateral for the loan. Major financiers include KCB, Equity Bank, NCBA, and specialised vehicle financiers.

Leasing: Operating leases allow you to use trucks without ownership, paying monthly lease fees. This preserves capital and shifts maintenance responsibility to the lessor. Lease rates vary but typically run KES 200,000-500,000 per month for heavy trucks.

Driver Recruitment and Management

Drivers are the backbone of your operation. For freight trucking, drivers need NTSA Category C1 licences for vehicles between 3,500-7,500 kg or Category C for heavy commercial vehicles over 7,500 kg. Category CE is required for articulated trucks and trailers. Verify all driver licences through the NTSA TIMS portal before hiring.

Implement strict driver management policies including regular drug and alcohol testing, mandatory rest periods of at least 8 hours between shifts, speed monitoring through GPS tracking, regular defensive driving refresher courses, and clear disciplinary procedures for safety violations. Driver salaries in Kenya range from KES 25,000-40,000 monthly for light vehicle drivers to KES 40,000-80,000 for long-haul truck drivers, plus allowances for overnight trips.

Insurance Requirements

Comprehensive insurance is essential for transport businesses. Required coverages include motor vehicle insurance (third-party minimum is legally required, but comprehensive is strongly recommended for commercial vehicles), goods-in-transit insurance covering the value of cargo being transported, public liability insurance for third-party injury or property damage, and workmen's compensation insurance for employees. Annual insurance premiums for a heavy commercial vehicle range from KES 150,000-400,000 depending on the vehicle value, coverage level, and claims history.

Technology and Operations

Modern logistics companies depend on technology for efficiency. Invest in GPS fleet tracking systems for real-time vehicle monitoring and route optimisation. Transport management software (TMS) handles order management, dispatch, invoicing, and reporting. Electronic proof of delivery systems using mobile apps improve accountability and customer service. Fuel management systems monitor consumption and prevent theft. Integration with clients' systems through APIs enables automated order processing and shipment tracking.

Financial Projections

A single long-haul truck on the Mombasa-Nairobi route earning KES 120,000-180,000 per trip (one way) and completing 4-6 round trips monthly generates KES 960,000-2.16 million monthly in revenue. After fuel (40-45 percent of revenue), driver costs, maintenance, insurance, and loan repayments, net margins typically range from 10-20 percent. A last-mile delivery operation with 5-10 vehicles can generate KES 1-5 million monthly with net margins of 15-25 percent. Scale your fleet gradually, reinvesting profits into additional vehicles as you secure consistent cargo contracts and build operational efficiency.