Effect of Rail Freight Transportation on Operational Performance of Logistics Firms in Kenya

Abstract

The study’s general objective was to establish the relationship between rail freight transportation and operational performance. There is an increasing demand for delivery of smaller units in higher frequency across the supply chain and logistics firms are always looking for innovative ways to provide better services at a lower cost. Rail freight transportation can result in operational performance improvement through improved customer satisfaction, increased productivity, timely delivery and so on. The study’s population was 1,884 logistics firms based in Nairobi and Mombasa. Proportionate stratified random sampling was employed to arrive at a suitable sample size. A structured questionnaire was employed to gather data. Descriptive statistics and regression were applied to analyze data. The findings implied a significant relationship among the dependent and independent variables applied. Network and infrastructure, travel time, equipment availability, safety/damage and pricing had a statistically positive influence on operational performance. A coefficient of determination R2 of .694 was obtained, which implied that 69.4% of the total variance of operational performance is justified by the model while 30.6% is justified by exogenous factors. The study proposes the utilization of rail freight transportation by logistics firms and policy formulation which will shift more freight to rail.