CAK Launches Investigation into Multinational Companies in Kenya’s Shipping Sector

The Competition Authority of Kenya (CAK) has initiated a probe into several multinational companies operating in Kenya’s shipping and logistics sector. The investigation stems from allegations of market abuse, collusion, and discriminatory practices that have disadvantaged local players in the industry.

Following complaints from the Kenya Transporters Association and the Kenya International Freight and Warehousing Association, CAK decided to look into the matter. The associations have raised concerns that multinational corporations hold a significant market share in logistics contracts, despite local companies owning the majority of trucking assets.

In a bid to address these disparities, the Kenya Transporters Association petitioned the National Assembly’s Departmental Committee on Trade last year. The association accused companies like Maersk, CMA CGM, MSC, and PIL of dominating the logistics value chain and marginalizing local firms. They proposed a quota system that would reserve 60% of logistics contracts for local businesses, but this was rejected by CAK due to existing laws.

However, under pressure from the National Assembly, CAK conducted a market screening and subsequently launched a full investigation into ocean freight shipping, clearing and forwarding, and trucking services in Kenya. The scope of the probe extends beyond shipping companies to include non-shipping firms like Bamburi Cement, East African Breweries Limited, and British American Tobacco.

The allegations being investigated by CAK include claims of multinational companies entering closed agreements to block local competitors, setting uniform charges for various services, and controlling multiple segments of the supply chain. There are also accusations of preferential treatment towards affiliates, delays in documentation, and unfair practices in lading arrangements.

According to data from the Kenya Ports Authority, Maersk and CMA CGM held significant market shares in 2023, with a dominance in containerized cargo at Mombasa Port. While no single company holds a majority share, CAK believes that Maersk and CMA CGM possess enough market power to potentially abuse their dominance.

The Kenya International Freight and Warehousing Association has also alleged that multinational companies engage in unethical practices such as poaching customers through unfair discounts and leveraging sensitive information. Previous attempts to address these issues through legislation have faced constitutional challenges.

CAK’s investigation is ongoing and is scheduled to conclude on September 30, 2025. The outcome of the probe will have significant implications for the shipping and logistics sector in Kenya, with potential changes in market dynamics and regulations to promote fair competition and protect the interests of local businesses.