How we made it in Africa

How we made it in Africa

by David on September 9, 2010

Transporting goods across Africa can be challenging, and without the necessary experience, logistics companies could face some serious delays. How we made it in Africa spoke to Greg Tighe, Concargo’s Director: Global Projects – Worldwide Operations, about dealing with these difficulties and the rising demand for goods to be transported from South Africa into the rest of the continent.

Greg Tighe

Cargo volumes can be used as a measurement of economic activity. Has Concargo seen a rise in the demand for its over-border services into the rest of Africa?

Africa is certainly growing in terms of cargo movements. Our over-border traffic into the SADC region is showing significant growth month-on-month, both consolidation as well as full truckloads.

The rise in the copper price has really boosted the Zambian trade resulting in increased demand for transport and logistics services into and out of the country. China is a major investor in the infrastructural development of Zambia as well as one of the largest buyers of the country’s minerals resources. We are currently transporting a wide range of commodities and equipment to Lusaka and the Copper Belt.

Demand is emanating from all the countries where we see major infrastructural developments taking place. Angola is another route where we’ve seen a dramatic increase in volume. Activities into the DRC are also on the up again; there is a lot of equipment moving to the mines in the southern DRC.

Most of these countries are solely dependent on the importation of raw materials, equipment and technical support to facilitate their developmental needs. Most of these goods are from South Africa or are routed through South African and Namibian ports.

What are the major challenges associated with transporting goods into the rest of Africa?

The poor condition of the roads that one has to travel on as well as the distances between the South African ports and suppliers in some of the northerly destinations is quite challenging to both transport equipment and drivers.

Clearing the border posts can be a logistical nightmare for inexperienced service providers embarking on these routes for the first time. Many of the border posts have poor facilities and officials often lack the necessary skills required to offer an efficient service. Corruption often presents its own set of challenges to the truck drivers who ply these routes.

We have been providing transport services into the SADC region for the past twenty years now and have fortunately paid our school fees. Anyone new at the game is going to face some serious challenges and delays. Things are never always plain sailing, but we have learnt over the years where to be proactive and what to look out for as well as what is ultimately required in order to expedite cargo through the borders with as little delay and as efficiently as possible.

Concargo's head office in Cape Town, South AfricaConcargo’s head office in Cape Town, South Africa

There is currently a lot of talk about Africa’s improving business environment. Have you seen an improvement in the quality of roads, customs clearance times, etc?

We have seen a lot of the previous negative perceptions of doing business in Africa disappear.

Political reforms in a lot of the African countries have led to an improving environment that has become conducive to doing business, and is beginning to attract foreign investment into the upgrading of roads and infrastructure. Customs clearance into the BLNS countries is conducted efficiently, however, we are still waiting to see improvements from our more northerly neighbours.

The DRC remains a very challenging destination to deliver to with poor facilities at the Kasumbulesa border and lots of corruption. If you don’t have your ducks in a row, you can have your truck detained at the border post for weeks. The border crossing from Namibia into Angola is probably on par with that of the DRC.

Why are transport costs in Africa among the highest in the world?

Some of the factors contributing to the high costs of transporting into Southern Africa are the distances, condition of the roads, border fees and the cost and availability of fuel. The maintenance costs on your truck tractors and trailer equipment is generally a lot higher as a result of the hammering that they take due to the bad roads.

One has to always have contingencies in place for the unforeseen. If your truck breaks down you need to have mechanical back up in place, often having to have spares sent up from South Africa. It is not as simple as calling out your local truck dealer’s emergency break down team as we can do here in South Africa. If you breakdown in the middle of Angola, you’re pretty much on your own. So you need to provide the means of retrieving your trucks, or getting workshop mechanics up there.

A lack of return load cargo from some of the countries is also a factor accounting for higher transport costs. The empty return leg must unfortunately be factored into the price of moving the load from A to B. Angola is a prime example of the one way traffic situation.

Source

{ 2 comments }

1 Moises Antunes August 2, 2012 at 1:23 pm

What a great article!

Africa is the “Promised Land” for business opportunities. However, perseverance and determination are the most enduring values for one to succeed in Africa.

Solutions to the major challenges associated with transport and logistics in SADC Region?

Some of the main solutions to these challenges is confined with building efficient infrastructures such as:

1-Roads
2-Bridges
3-Ports
4-Railways
6-Transborder logistics facilities

National Railways must link all the countries in the SADC Region. Decision-makers should pay especial attention to cross borders integration when drawing policies aimed at their national infrastructure objectives.

They should look beyond their national borders, as to allow transports and logistics integration. There must be political will to proactively carrying out these objectives with an eye beyond the borders. A shift of mindset and a proactive approach towards that, will allow good conditions of the roads, minimises distance, and costs.

.

The process of globalisation and regional integration are underpinning the dynamics of Africa Political Economy. The business environment is changing, one needs to adapt and position oneself accordingly.

In Africa, only business leaders with perseverance and determination that succeed, only those who take risks to go where everyone else is afraid to go, only those who make efforts to understand the culture and the dynamics of business in Africa will flourish.

It is clear from the article above, that the lack of infrastructure is the main challenge in Africa. The IPAD – Infrastructure Partnerships for African Development, is the main platform to find solutions for these and many other challenges. As a series of IPAD Conferences in Angola, DRC and now in Mozambique from the 13th to the 15th of November 2012 will be held in Maputo

Make you presence there and be part of the solution
This is finding African solutions for African problems.
To register your delegation contact-me:

Moises Antunes
International Business Consultant
Angola, Mozambique and South Africa

Mobile: 00 27 78 36 24 946
E-mail: antunes.moisesmonteiro@gmail.com

2 Andreas Wieland December 9, 2012 at 8:07 am

After decades of instability, African countries deserve to finally enjoy prosperity. However, foreign investments are not sufficient if they are just made to ship resources out of the country, as in colonial times. Rather, sustainable development is needed. “Help to self-help” can be an important building block. This year, for example, I spent some weeks teaching logistics and supply chain management in Tanzania.

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