AFRICA OUTLOOK SPECIAL FEATURE

NOVEMBER 2009FREIGHT & TRADING WEEKLY

Tackling sky-high logistics costs

Freight industry Accused!Guilty of aiding and abetting a climate of corruption?

Why Africa beats Asia

Edeh on business reforms and poverty reductionEdeh on business reforms and poverty reductionAfrica booming

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The Leading Logistics Network into Africa

A partner with a strong and integrated network

SDV South Africa Pty Ltd, 24 Covora Street, Jet Park, 1469, P.O. Box 1018, Isando, 1600Commercial Manager – Jacques Baudelot, Tel no: +27 11 398 5000, Email: sdv.south-africa@sdv.co.za

1st: We are the 1st logistics network integrated in Africa.

41: The number of African countries where we are present.

50: We have been operating in most African countries for over 50 years (80 years in Senegal).

200: In M€, represents our average annual investments in Africa.

200: The number of our agencies in Africa.

6 000: The number of handling and transport vehicles used in Africa.

20 000: The number of people employed in Africa.

6,500,000: square meters, the surface of offices, warehouses, container yards and workshops.

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NOVEMBER 2009 | 1

Editor Joy OrlekConsulting Editor Alan PeatContributor Liesl Venter Advertising Carmel Levinrad (Manager)

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Divisional Head Anton MarshManaging Editor David Marsh

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Tel: (021) 434 1636 Carrie Curzon Tel: (021) 674 6935Port Elizabeth Ed Richardson

Tel: (041) 582 3750Swaziland James Hall

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Logistics and transportPage 6 SDV secures major contract with Chinese companyPage 8 Perseverance pays off for Botswanan entrepreneurPage 12 Public private partnerships are key to Moz successPage 14 Using blackberry mobiles to ring the changes in MozambiquePage 16 ‘Private enterprise must work with rail on coal transport’

Page 24 Timber and textiles still big Swazi movers

Page 26 Transhipments are big business for Swazi RailPage 32 SACD expands warehouse ahead of expected upturnPage 36 Specialised team targets minerals market in Zambia and the DRC

Page 38 Door-to-door express service keeps Angola-bound cargo movingPage 40 Moving goods on a grand scalePage 41 ‘Becoming the link between importer and exporter’Page 42 Finding a lucrative niche in Angolan roadfreightPage 48 Working with governments to address infrastructure challengesPage 49 Freight collect service a big benefit for Africa consolidationsPage 54 Self-regulation vital to avoid cost increases

SeaPage 11 ‘Phenomenal’ development offers huge opportunities in MozPage 18 Asia-Maputo service gets positive feedbackPage 20 Shrinking volumes reduce berthing delays in AngolaPage 21 Wilhelmsen makes its mark in MaputoPage 28 ‘Industry guilty of aiding and abetting a climate of corruption’

AirPage 45SAA gears up to play its part in regional growthPage 55Intermodal option combines air, sea and road

GeneralPage 2 The argument for choosing Africa over Asia

Page 5 Focus shifts to poverty reduction – and adding value is the buzz phrasePage 10 Oil-producing countries will be hardest hit by financial crisisPage 44 ‘Safety and security training sadly neglected’Page 46 Africa gets more quality-conscious A range of electronic options speed documents for cross-border traffic

With Africa’s economic growth likely to overtake the global average in 2010, there are good reasons to maintain focus on this sizeable and underdeveloped market.

All agree that it’s not without its challenges, but the rewards justify the effort.FTW takes a closer look.

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Chris Edeh ... see story on page 5. Cover photo: Tijana Huysamen.

2 | NOVEMBER 2009

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By Alan Peat

Although much of the beleaguered export industry in the southern hemisphere

is taking a “Look East, young man” stance as the destination option with the main potential, is this really the answer for South Africa, asked trade specialist Duncan Bonnett of consultants Liz Whitehouse & Associates.

Examples, he told FTW, were Australia – “Once again being seen as a leader to follow” – and Brazil, which have both hitched themselves to the Chinese train.

“They are cited as countries that have weathered the global economic crisis relatively well,” Bonnett added, “by focusing their exports on Asian countries less affected by the global crisis.”

With its guaranteed export markets in the European Union (EU) and the US having dried up – as have local markets, to a degree – SA is in a similar quandary about which export market options to chase.

According to Bonnett, financial analysts and government officials are actively pursuing Asia and Latin America. “This,” he added, is joined by talk of South-South trade, emerging market solidarity, and much else, as they gaze across the oceans in search of the panacea for a battered manufacturing sector in this country.”

The fact that China has recently been declared SA’s largest trading partner would seem to reinforce the “Look East” policy, and vindicate its proponents.

“However, is this really the

The argument for choosing

Africa over Asia It’s all about value-add

Duncan Bonnett ... ‘Too many companies and policy makers have badly underestimated the rest of Africa as a strategic destination.’ Photo: Tijana Huysamen.

NOVEMBER 2009 | 3

answer for SA?” he again asked.“After all, a cursory glance at our

trade with China shows that while exports are indeed growing rapidly, SA’s export profile to China is very similar to that of just about any other African country – dominated by raw materials, with little value-add in the mix.”

Supporting this are figures that 61% of our exports to China are in the form of mineral products (basically coal, iron ore and other metallic ores), with a further 20% being base metals – and, therefore, 81% of our exports to China have very little value-added.

“Since China needs these commodities in any case,” Bonnett queried, “is there any real value to be gained from spending time and effort nurturing this relationship to the degree that we do?”

Contrast that, he added, with our exports to Africa – remembering that this excludes trade with our Southern African Customs Union (Sacu) partners (Botswana, Namibia, Lesotho and Swaziland), which would add another 15% to 20% to the figures.

Exports to the rest of Africa, with a population only about 75% of China’s, were almost three times the size, according to Bonnett’s statistics.

“If the Sacu trade is added,” he

said, “SA would have exported more machinery and mechanical appliances and electrical goods into Africa than mineral products to China.

“Base metals and mineral products do constitute a strong percentage as well, but many of these exports are in support of project activity being undertaken by SA companies cross-border, thus adding to the national value.”

Producing African trade figures (see Table overleaf), Bonnett

stressed that it showed a far more-balanced and broad export basket – with a high percentage of value-added products in the mix.

“This suggests,” he added, “that at a policy and strategic company level SA should be far more aggressive in cementing her position in the rest of the continent.

“This is not to say many companies are not doing this already, but too many companies and policy makers have badly underestimated the rest of Africa as a strategic destination. And, whilst

we look to ‘easy’ developed markets for exports, the BRIC countries (the Brazil, India, China trade grouping) we so prize are moving into our natural space with ever-increasing speed and sophistication.”

It is Bonnett’s opinion that SA companies have, for years, treated the rest of the continent as something of a sponge – to absorb excess capacity when local or traditional export markets have declined.

This is changing, he added, as more of our blue-chip companies expand into the continent. “But it’s not happening fast enough, nor with the degree of co-operation and vision that it should.”

Citing other figures, Bonnett noted that exports had shown robust growth to the rest of the continent in recent years, with exports for the first half of 2009 almost reaching the level of the whole of 2005.

“In addition to this,” he said, “whilst analysts and commentators have navel-gazed at the meltdown of the US and EU, a forgotten story is the relatively robust nature of Africa’s economy during this time.

“Whilst growth forecasts for Africa have been downgraded by the International Monetary Fund (IMF) and others, many countries are still showing robust growth levels. Mozambique has forecast

growth in 2009 of 6.1%, down from 6.9% in 2008, but impressive nonetheless. Others are in a similar position.”

Bonnett suggests that the focus of analysts has been on the fact that many African countries are primarily producers and exporters of a limited range of primary products – energy minerals, metals and agricultural commodities – and thus the global downturn should have resulted in sharply contracting growth in these countries.

“However,” he told FTW, “most countries were insulated from the crisis in the west by continued exports to Asia and a lack of exposure to the financial crisis.

“Growth continues apace and the meltdown in areas such as mining has just not materialised. Many projects were delayed and expansions scrapped, but a cursory glance at the papers in the region shows that many have since come back on line.”

The result? After several years of relative

decline in terms of our exports, other African countries (excluding Sacu) now account for 20% of our exports by value.

“This is up from barely 15% during the middle of the decade,”

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‘Growth continues apace and the meltdown in areas such as mining has just not materialised.’

To page 4

4 | NOVEMBER 2009

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said Bonnett. “Add in Sacu, and the figure is probably closer to 25% of the total – and most of these are value-added products.”

Summarising his pro-Africa argument, Bonnett said that other African markets continued to offer a great opportunity for SA manufacturers and exporters –

although he suggested that this seemed to be taken for granted, rather than nurtured and developed.

“The resilience of the continent, and the fact that economies in

Africa have diversified far more than analysts give them credit for, provides fertile ground for those companies willing to develop these markets.”

From page 3

ComPArATive Exports to ChIna & afrICa: 2008, Zar BIllIonsProducts China (ZAr bn) % of exports Products Africa (ZAr bn) % of exports

Mineral products 21.35 60.6 Machinery & mechanical appliances, electrical equipment 19.18 18.5Base metals & articles thereof 7.07 20.1 Base metals & articles thereof 17.04 16.4precious & semi-precious stones & metals 2.06 5.8 Mineral products 13.86 13.4Chemicals 1.06 3.0 Vehicles, aircraft, vessels & transport equipment 13.53 13.0textiles & textile articles 0.72 2.1 Chemicals 10.63 10.2plastics & rubber & articles thereof 0.69 1.9 Vegetable products 7.25 7.0pulp, paper & paper products 0.68 1.9 prepared foodstuffs, beverages & tobacco 5.87 5.7Machinery & mechanical appliances, electrical equipment 0.43 1.2 plastics & rubber & articles thereof 5.84 5.6Works of art 0.38 1.1 pulp, paper & paper products 3.32 3.2prepared foodstuffs, beverages & tobacco 0.23 0.7 high precision instruments & apparatus 1.71 1.7hides, skins & leather products 0.18 0.5 Miscellaneous manufactures 1.44 1.4Vehicles, aircraft, vessels & transport equipment 0.16 0.5 textiles & textile articles 1.14 1.1live animals, animal products 0.08 0.2 live animals, animal products 0.85 0.8high precision instruments & apparatus 0.06 0.2 articles of stone, cement, asbestos, mica, ceramics & glass 0.79 0.8Vegetable products 0.03 0.1 Wood & articles thereof 0.47 0.5articles of stone, cement, asbestos, mica, ceramics & glass 0.02 0.1 Edible fats & oils 0.42 0.4Edible fats & oils 0.01 0.0 footwear, headgear, umbrellas etc 0.20 0.2Miscellaneous manufactures 0.01 0.0 hides, skins & leather products 0.06 0.1Wood & articles thereof 0.00 0.0 special classification: oEMs 0.05 0.0footwear, headgear, umbrellas etc 0.00 0.0 Unclassified 0.04 0.0Unclassified 0.00 0.0 precious & semi-precious stones & metals 0.04 0.0special classification: oEMs - - Works of art 0.02 0.0Total 35.24 100.0 Total 103.77 100.0

NOVEMBER 2009 | 5

By Liesl venter

It wasn’t only volumes that were affected by the global economic downturn – the rules of doing

business in Africa also changed.This is according to Chris Edeh,

CEO of Pax South Africa, an investment holding company with focus on information technology, real estate, mining and the agricultural sectors.

An exporter of ICT infrastructure, machinery as well as health and safety equipment into sub Saharan Africa, Edeh says as African countries were hit by the crisis, leaders stood up to the challenge.

“Governments are addressing the continent’s challenges and opportunities by promoting growth, job creation and poverty reduction as well as the dependency on commodities.”

It has become clear that the private sector can add value. “Inclusive growth that generates decent work and income is the best way to reduce poverty in Africa. Focus is on increasing competitiveness of private enterprise.”

Edeh says they see a lot of progress

in Africa with reforms hitting a record level this year. “Reforms were recorded in 131 countries, 20% more

than the year before. For the first time a sub-Saharan country, Rwanda, was the world’s top reformer of business

regulation, making it easier to start businesses, register property, protect investors, trade across borders and access credit.”

This is all despite the projected decline in growth. “The potential consequences of the global downturn for Africa’s development should not be underestimated,” says Edeh. “However, the future also presents real opportunities for Africa.”

It is predicted over 80% of future global economic growth will depend on emerging markets.

“African countries can become major beneficiaries of this trend if the continent pursues the right policies for private sector-led growth and value added exports,” says Edeh. “By 2025 one in every four young people worldwide will be from sub-Saharan Africa. This gives the region a significant opportunity. If capital is available and if the skills needed to compete in the global economy are nurtured, the continent’s youth will constitute a major comparative advantage and be a force for positive change in Africa.”

Focus shifts to poverty reduction – and adding value is the buzz phraseMove away from commodities

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Chris Edeh ... the rules of doing business have changed.

6 | NOVEMBER 2009

By Liesl Venter

While it has not emerged totally unscathed, Botswana managed to escape the worst

of the global economic meltdown, says Gareth Lendrum, SDV general manager: Botswana.

“We have slowly been ticking away with no huge decline in cargo in recent months, and while some industries were affected, we were definitely not as badly affected as other regions.”

And they can prove it too as SDV Botswana is expected to close better this year than 2008.

“We have had to work hard to achieve this because even though we did not see a big dent in our volumes, clients definitely used the recessionary times to shop around.”

According to Lendrum, opportunities for freight forwarders servicing Botswana are plentiful at present, especially when it comes to the construction industry. With the

influx of Chinese companies setting up shop in the landlocked country, there is much potential as the Chinese market continues to offer the biggest opportunity for growth.

“The only problem we face is that the Chinese are entirely based on costing and very few can compete with their pricings. And if you are out with your price, you are out.”

But, says Lendrum, whose company has secured a contract with the Chinese company Huawei

Technologies, which will be upgrading the entire Botswana telecommunications network, logistics companies have much opportunity to benefit. “The Chinese import everything and that means business for freight forwarders.”

Another challenge, he says, is the language barrier. “We have overcome this by employing a Chinese representative. Having someone who can speak the language has helped a great deal.”

By Liesl Venter

Road transport works well for Botswana because of the availability of return load capacity, says Anthony Lee, managing director of Transport Holdings Limited.

“Using the road network makes sense as it is fast and efficient. Our road infrastructure is also fairly good and because we are able to exploit return load capacity it also makes business sense to use road.”

While the road and rail debate has often reared its head, not just in South Africa but also Africa, most role-players agree that it is not about one or the other, but rather the two modes of transport working together.

“In principle it is true that some commodities are better suited to rail than road especially in terms of bulk commodities,” says Lee.

“But practically it does not always work, especially when the time value of money is considered. Add the return on investment requirement to the mix and it becomes a

very grey area.”In the meantime countries like

Botswana remain dependent on the road network. “With no manufacturing industry in Botswana everything is imported and most of it is brought in by road.”

According to Lee the past year has not been easy for business with the global recession affecting volumes and price. “We were not as badly affected as what we thought, but we saw a drop of at least 40% in the volumes in the mining industry. Other business remained stable. I do believe we have hit the bottom and that we are now moving forward.”

For Transport Holdings this means implementing a brand new IT system. “This system will allow for fully integrated labelling, track and trace as well as warehouse management – all crucial aspects of our business.”

He says it will also allow the company to be more aggressive in its pursuit of new customers and markets in the coming months as the world moves out of recessionary times.

SDV secures major contractwith Chinese companyBotswana has escaped the worst of the the global meltdown

Return loads make road a viable option

Anthony Lee … ‘The past year saw a drop of at least 40% in the volumes in the mining industry.’

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By Liesl Venter

Extramile Express has gone international with the opening of its new branch

in the UK and Namibia.The Botswana-based freight

forwarder’s office in the UK will extend the company’s reach even further, says CEO Joy Simakane.

“Botswana is reliant on imports as we hardly manufacture here. It is therefore necessary to have an international foothold as well as a strong presence in the region.”

With established offices in Namibia and South Africa, the company is set to extend its reach to include all the Southern African countries. “We have just been granted a company reg certificate for Zambia and we intend opening an office there very soon. We are also looking into the possibility of expanding to several other countries in Africa.”

That the expansion is proving to be a success is evident from

the first month’s turnover, which surpassed £20 000 in the UK.

Simakane says that much of this expansion is due to client demand. “It is not just about being client-orientated, but also about saying to our clients here is an African company and we are just as good as our international colleagues – use us.”

A big part of its success is its hands-on approach, which starts long before the contract is signed. “We are a team of people who sit down and discuss the pros and cons of signing a particular client – does it make financial sense and is it something we can do successfully.”

It is an approach that has paid off as the company continues to expand. “We build relationships with our clients and we keep them satisfied.”

Taking into account that only five years ago the company was a one-woman band, this team is definitely doing something right!

By Liesl Venter

Technology is only as good as the people who use it. And in Botswana, where industry training is often not up to scratch, finding and retaining staff proficient in logistics and IT can be problematic.

This is one of the very real challenges of working in the country, says Gareth Lendrum, general manager of SDV in Botswana. “Training in our industry is definitely lacking in the country and along with that IT knowledge. Even something as simple as drawing up a spread sheet is sometimes a challenge.”

For that reason manual systems are often still used. “They do work as long as they are managed well,” says Lendrum. “Most of our global service providers carry internal tracking systems to which we as freight forwarders are given access. Therefore the tracking of shipments has become the responsibility of the carrier and not the facilitator. We are however

huge carriers in many parts of the world with most equipment owned in Africa.”

Lendrum says overcoming challenges is part and parcel of working in a country like Botswana. “One learns to deal with the challenges and to build up your own support network.”

Botswana forwarder sets up UK officeExtramile plans further global and regional expansion

Skills shortage a big challenge in Botswana

Gareth Lendrum … ‘Most of our global service providers carry internal tracking systems to which we as freight forwarders are given access.’

8 | NOVEMBER 2009

By Liesl Venter

Joy Simakane makes her dreams come true no matter what. Describing herself

as not very “schooled”, but dedicated and hardworking, she creates opportunity out of almost everything.

Five years ago this young Botswanan entrepreneur took the decision to walk out of a secure job and start her own company.

With dreams of having a catering business, she quickly realised that her ever-declining bank balance would not allow for this. So instead she started Extramile Express with only one employee – herself.

“I had worked in the clearing and forwarding industry for years. And when I left my job I was intending to leave the industry. But I soon realised I did not have enough money to start something I knew nothing about. So I set off

for the border and started doing what I knew best – clearing.”

With no office and only herself as employee, she took up her own challenge.

“I had a vision of this small little company becoming an international freight forwarding business. I did not have much, but I had knowledge and I had experience, and I was willing to work hard.”

And it all paid off. Today her vision has come true – Simakane does exactly that. She owns and runs an international freight forwarding company employing more than 100 people with offices in London, South Africa and Namibia. Plans to expand to Zambia, Zimbabwe, Kenya and China are also on the cards.

“It has not been easy – I am not an educated person, at least in the scholarly way, but that did not stop me. I have faced challenges and overcome them. I believe it

is about perseverance, dedication and hard work. And ultimately, I guess I am educated in freight forwarding and clearing!”

Surrounding herself with a team of extremely capable workers is just as important, says Simakane. “I build relationships not just with my clients but also with my employees. I develop and train my staff. I take the time to remember birthdays, to buy small gifts for Valentine’s Day and to create a workplace they enjoy coming to.”

As a mother of two and wife, she admits it is not common to find women from her country achieving success in the business world – even less so in a male-dominated industry such as freight. “I believe women in Botswana are slowly but surely changing the tide and taking their destiny into their own hands. It is also important that more women step up and become entrepreneurs, regardless of their educational background.”

Perseverance pays offfor Botswanan entrepreneur… as Extramile Express expands global footprint

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SHIPPERS TO REPUBLIC OF CONGOIMPORTANT NOTICE

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The FRABEMAR Srl, via COLOMBO 12/4 – 16121 – GENOVA, mandatory of OGEFREM) wishes to inform all Shippers (Importers), Owners (Shipping Lines), Shipping Agents and Forwarders that, FRABEMAR, has been appointed Mandataire of OGEFREM to issue the F.E.R.I. in all Countries outside the Democratic Republic of Congo (RDC).

F.E.R.I. (Fiche Eléctronique de Renseignements à l’Importation) is the compulsory loading certificate which must be issued for each Bill of Lading, with goods destined for the RDC, which can be obtained on application from MITCHELL COTTS MARITIME, who represent the Congolese Shippers Council in South Africa, Namibia, Swaziland, Mocambique and Zimbabwe.

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Africa overviewPopulation: 748 millionCountries: 56Area: About 30.33 million square km. It makes up about 22% of the world's total land area.Languages: More than 1 000 different languages are spoken in Africa. Somalia is the only country in the world where all the citizens speak one language, Somali.Fastest animals: Four of the five fastest land animals live in Africa. Longest river: The Nile drains northeastern Africa, and, at 6 650km, is the longest river in the world.Lowest point: Lake Asal (153m below sea level) in Djibouti.Highest point: Mount Kilimanjaro (5 895m) in Tanzania.Malaria: Over 3 000 children under the age of five die each day from malaria in Africa.Employment: Africa has one of the world's highest youth unemployment rates (25.6% in the Middle East and North Africa, and 21% in sub-Saharan Africa). Africa loses an estimated 20 000 skilled personnel a year to developed countries.Source: China-Africa Development Fund

NOVEMBER 2009 | 9

By Liesl Venter

Botswana has plenty of opportunities, especially with the boom in projects

currently under way in the country.“Volumes were down last year,

but we are seeing a definite increase especially with the new projects in the country,” Zebra Shipping managing director Tsimane Brixton Mogami told FTW.

And ultimately the entire Botswanan freight forwarding industry will benefit.

“This is a stable country with a stable government which has resulted in a stable economy. Our currency is also strong. These are all good attributes for investment.”

Oduetse Makgane, director of strategic projects for Zebra Shipping agrees, saying that the freight forwarding industry is benefiting immensely from the projects and the tide of investment in the country.

“There is one project for example where 2 000 Chinese will be brought into the country – that is extremely good for local business as these people will be living in

our town, buying here. That means more imports.”

Makgane says freight forwarders who are keeping their ears to ground and are committed to their clients will reap the benefits of the project boom.

“It is all about knowing your client, understanding their needs and meeting these timeously. This is a small country and a bad reputation is not so easy to lose. Good marketing is also essential in these times.”

Forwarders benefit from tide of investment in Botswana

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Cellphones connecting business in AfricaBy Ed Richardson

Companies doing business in Africa may find that cellphones provide the best and most efficient means of handling information and transactions, according to the United Nations Conference on Trade and Development (Unctad) Information Economy Report 2009.

“In the agriculture and fisheries sectors in Asia and Africa, mobile phones are used to conduct sales and purchases and to negotiate prices,” it says.

Small and micro businesses are leading the way towards business-by-cellphone due to the challenges and costs of fixed line infrastructure in Africa.

This has implications for the way that South African exporters, importers and logistics companies communicate with customers, branches and suppliers in the rest of the continent.

Brixton Mogami ... boom in projects.

10 | NOVEMBER 2009

After maintaining a near 6% growth for the past five years, sub-Saharan Africa

will likely suffer to a far greater extent from the effects of the global financial crisis than first expected.

This is according to credit solutions provider Coface, which believes the oil producing countries will probably be the hardest hit by the crisis.

Forecasts for 2009 have been accordingly reduced below 2% compared to the 5% forecast last October, and while growth is expected to rebound to 4% in 2010, it will remain below its pre-crisis level.

According to Coface, the oil producing countries are likely to suffer a precipitous 5.5-point drop in growth, down from 6.9% in 2008 to a still-positive 1.4 % this year.

“Most oil countries will be unable to offset the decline in prices by increasing production.

Angola is likely to experience an economic contraction of about 3.5%, after maintaining near 20% annual growth over the past five years,” according to Coface.

While a large majority of continental countries have benefited from the fall of oil and foodstuff prices, all have suffered from the decline in their exports in both volume and value terms and from the decline in financing flows, particularly foreign direct investment and private transfers. Lacking diversification, African economies suffer directly from the decline in prices and demand for their main export production like diamonds in Botswana and Namibia.

But, says Coface, a few exceptions are noteworthy like the rise of cocoa prices in Ghana and cotton in Mali and Burkina Faso.

Also proving positive for the continent is the steady price for gold with its safe haven appeal.

Oil-producing countrieswill be hardest hit by financial crisisGood cocoa prices a positive in the gloomy pictureThe

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NOVEMBER 2009 | 11

By Liesl Venter

Since establishing a presence in Mozambique in 2005, Sturrock Shipping has

transformed from an exclusive ship’s agency representation based only in Maputo to a service provider that now comfortably offers the entire logistics package in the ports of Maputo, Beira and Nacala.

Recently the company opened an additional office in Goba on the Mozambican, South African and Swaziland border, in order to increase its footprint and broaden its horizons. “This expansion is in line with the Group’s vision to be globally recognised as the leading ship’s agency, clearing and forwarding and logistics company in the sub-Saharan African region,” says Alan Bremner, director of Sturrock Shipping Mozambique.

“The company’s success is a

function of being well positioned, expertly staffed and technically equipped to handle projects as and when they come along,” he told FTW.

He notes that Sturrock Shipping Mozambique is taking on more

project cargo agency work and also gearing up its clearing and forwarding division in order to provide its customers with full-service logistics solutions.

“Mozambique is just waiting to explode and the development taking place in the country is phenomenal. The achievements are all the more impressive, taking into account that the country came out of a protracted civil war just over a decade ago.

It is not without its challenges, however. One of these is storage limitations which have resulted from the significant increase in the volume of petroleum movements,” says Bremner.

A further challenge, according to Bremner, concerns the Mozambican customs and excise law. Despite these challenges, he says that Sturrock Shipping is confident that the country will continue to provide opportunities.

“It is important to have in place people who understand the laws and pitfalls and who are able to communicate these accurately and concisely to clients who may not always be familiar with the lie of the land. We understand Mozambique, its systems and its laws and can therefore provide customers with a one-stop shop that allows them to concentrate on doing what they do without having to be concerned about these details,” he concludes.

The Mozambican First World War memorial honouring the country’s men who gave their lives during the vicious battles has become a legend to locals. It depicts a woman with a snake – and locals tell the story of a large snake that terrorised Mozambicans for years. The woman standing proud in Labour Square in the capital, Maputo, is said to have outwitted the snake by cooking a large pot of porridge into which the snake fell and subsequently died.

‘Phenomenal’ development offers huge opportunities in MozambiqueSturrock opens additional office in Goba

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‘Gearing up clearing and forwarding division to provide full-service logistics solutions.’

12 | NOVEMBER 2009

By Liesl Venter

Mozambique is gradually heading towards a better and brighter future with

big business willing to invest in its infrastructure.

As the Port of Maputo continues to be developed, logistics and transport companies have realised the potential and have shown commitment with their own investments.

According to St John Baxter, CEO of Trans Africa Logistics, a division of Super Group Trading, logistics infrastructure outside the port is just as important as the development of the port itself.

“We believe in partnerships and creating an environment where business can function effectively and efficiently. There is a lot of potential for us as a company in Mozambique.”

It is for this reason that Trans Africa Logistics has financed

the refurbishment of 22 flat bed carriages for the Mozambican railways, CFM. “Not only does it allow us to attract and hold business, but it also addresses the aged infrastructure issues that the country is facing.”

With the refurbishment taking place during October this year, the new flat bed carriages will enable the company to load heavier plate-rated containers for the export of chrome for one of its major clients to the Far East.

“The density of chrome requires a container that is plate-rated to allow for the extra weight and we will now be able to load these heavier loads on to the flatbeds,” says Baxter.

With chrome production down by 50% in some cases during the global economic downturn, volumes are slowly picking up again, says Baxter.

“On our current premises we can handle 12 000 tons of chrome

per month. We are expanding this facility to be able to handle 25 000 tons. We have also invested in new equipment and once our facility

upgrade is completed within the next six months, we will be able to handle several other commodities other than chrome.”

Private public partnershipsare key to Moz successTrans Africa Logistics finances refurbishment of rail carriages

St John Baxter and Des Morum … ‘We believe in partnerships and creating an environment where business can function effectively.’

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NOVEMBER 2009 | 13

By Liesl Venter

With a brand new management team in place, the Maputo Port Development Company (MPDC) recently completed a 20-year master plan heralding a new era for the Maputo Port.

According to Rui Sant’ana Afonso,

planning and development manager for the MPDC, the plan will be launched next year.

“We have a new management team and remain as dedicated as ever to developing the services and capacities of the port,” said Afonso. “We are working very closely with the rest of the port community to ensure

that Maputo becomes the preferred complementary port for SADC importers and exporters.”

The MPDC in April 2003 obtained a 15-year concession to restore, manage and operate the Port of Maputo, which is the only privately owned port in Africa.

Vested with the powers of a

port authority the MPDC finances, rehabilitates, operates, manages, maintains, develops and optimises the port under the concession agreement.

According to Afonso, the master plan will see even more development taking place at the port which in the past year saw volumes increase by 8% despite a global economic meltdown.

‘Base port decisions on what is good for the region’By Liesl Venter

The Port of Maputo is not an overflow for Durban, but rather a port in its own right with its own

market, says Filipe Franco, managing director of the Maputo Cargo Terminal (MCT).

“This port is not about taking anything away from Durban. We are rather saying let the cargo that is natural and easier to move via Maputo come to Maputo.”

With trust in the port growing every day, Franco says Maputo is more than capable of handling its share of cargo.

“We should drop our country flags

for a while and look at what is good for the region. Cargo should be moved through the ports that make the most sense – not just cost wise, but also environmentally.”

Franco says as governments in the southern African region continue to implement a duty free system between the two countries, it just makes sense to let Maputo handle cargo that is closer to it than to Durban. “Citrus grown in the northern parts of South Africa should be moved through Maputo instead of Durban. It does not make sense to develop Durban more and more while Maputo has the capacity but stands empty. Why have a port

only being used to about 50% of its capacity, while another port which is further away is being used to 200% of its capacity.”

Franco says Europe stands as an example to South Africa and Mozambique. “You sometimes cross a land border and don’t even know it. We must bring down the barriers for the good of the region.”

According to Franco MCT, situated some nine kilometres from the port quay side, is able to meet any clients’ demands. “We not only speak the language, but we also know the conditions of trade and can adapt to the clients’ specific needs.”

New management team ready to move Port of Maputo forward

Northern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern MozambiqueNorthern Mozambique

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Filipe Franco ... ‘Citrus grown in the northern parts of South Africa should be moved through Maputo.’

14 | NOVEMBER 2009

By Liesl Venter

Africa’s potential lies in the hands of its people and it starts with changing the

perception people have of the continent, says Faruque Assubuje of Manica Freight Services (Mozambique.)

“There are great ideas for this continent, but the time has come that we turn these ideas into actions and show not only our capability but also that we are professional.”

Proof of this is Manica’s decision to give all vessel operators a blackberry mobile phone that allows them to communicate with the office at all times, and be out in the field – working.

Implemented two months ago, the move sees Manica taking the lead in the country when it comes to using technology to

improve efficiency.“Now our operators can get to

the vessels and clients, while they can also access their email without having to waste time coming to the office,” says Assubuje. “This makes the world of difference and it signals that Africa is serious about business.”

Genaro Moura, Manica Freight Services (Mozambique) branch manager, agrees saying the emphasis is being placed on efficiency, timeliness and client service.

“Being 100% Mozambican owned there is no doubt that we believe in the country and the continent as such. We are always looking at ways to expand and to use opportunities that come our way.”

Moura says that maintaining standards at all times is of extreme importance. “That is why we have the SABS certificate to show that

standards are high on our priority list.”

He says quality of imports and exports to and from African

countries such as Mozambique is being supported by governments, showing the world that Africa has come of age.

Using blackberry mobilesto ring the changes in Mozambique‘Africa has come of age’

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NOVEMBER 2009 | 15

By Liesl Venter

Major improvements to the rail network as well as the development of an

institutional framework have led to more confidence in the Maputo Corridor.

According to Brenda Horne, CEO of the Maputo Corridor Logistics Initiative (MCLI), recent years have seen the development of a platform to bring stake-holders together in an effort to increase the use of the corridor and ultimately the Port of Maputo.

“We are not competing with the South African ports, but complementing them. On the east side Maputo has capacity and is ideally situated for cargo on this corridor.”

With much private investment the corridor has seen much development since the start of the process in 2003, said Horne. “Obviously one cannot do everything at once, but so far we have addressed the lack of rail and made some major inroads with both Transnet from South Africa and CFM from Mozambique involved. We have also addressed the lack of an institutional framework and today both

governments support the corridor.”Horne said with the introduction of

more direct shipping lines this year the port has become an even more viable option and the obvious choice for importers and exporters in the Maputo Corridor region.

“We have done a lot of work in changing the perceptions and attitudes of people and we are very pleased with the positive attitudes. Work still needs to be done and that includes focusing on a one-stop border post to improve efficiency while we also want to see procedures and infrastructure of the border post upgraded.”

More direct services add muscle to Maputo value proposition

Brenda Horne … ‘Work still needs to be done and that includes focusing on a one-stop border post.’

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LBH Group expands national footprintBy Liesl Venter

LBH Group is continuing to expand operations in Mozambique.

Having just opened an office in Nacala, the shipping agents now have offices at all the Mozambican ports, giving them a national footprint.

“Africa has her challenges but

nothing insurmountable. We are confident in Mozambique and therefore continue to expand,” says Karel Meyer of LBH Mozambique in Maputo. “It is important to have a face and a presence at all the ports as we believe that more and more ships will be calling at the country in the future.”

With Nacala having the biggest deep-water berth in Africa it is an important port for the country, says Meyer. “We are seeing the potential not just for us as a company, but also for the country. Following the global economic meltdown it is getting busy again and exports and imports are expected to increase dramatically.”

Karel Meyer … ‘Exports and imports are expected to increase dramatically.’

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16 | NOVEMBER 2009

By Liesl Venter

If the coal terminals in Maputo are ever to reach full capacity it is important that private

enterprise engage and work with the Mozambican railways, says Pieter Venter, general manager of Grindrod Mozambique.

Having just opened a brand new coal terminal at the Port of Maputo, while upgrading its first coal terminal to a capacity of about 6 million tons of coal per annum, Grindrod has been engaging with both CFM and Transnet Freight Rail (TFR).

“Our entire coal facility is dependent on rail connectivity, not just along the corridor from the coalfields in South Africa, but also up to the time wagons are tippled and the coal stockpiled. As we are currently in phase 3 of our expansion plan for the Matola coal terminal – that will see it grow from a facility handling about two million tons of coal currently to one that handles six million tonnes – it is important that we know we have sufficient rolling stock capacity and commitment from all the role-players.”

Venter says both CFM and TFR have embraced the coal terminal expansion projects. “It makes commercial sense for the mines from the Witbank and Phalaborwa areas in South Africa to use the Port of Maputo. It is a simple calculation to make – Phalaborwa

to Richards Bay or Phalaborwa to Maputo.”

And with the Port of Maputo developing at its current rate, it will be able to handle any cargo thrown its way.

“This is also one of the ports where there still is scope for expansion and where congestion is not holding up cargo,” says Venter. “We have dedicated berths and can therefore provide flexible solutions to our clients. We are working hard to improve terminal

efficiency and loadout productivity is improving all the time.” He says that once Grindrod took the decision to invest in Mozambique, it committed to the port and was aware that it was not a short-term plan. “We are here for the long haul and we believe that as we are still relatively new participants, we can offer our clients flexibility. We are able to tailor our service to the customers’ needs. There is no doubt we are serious about what we are doing in Mozambique.”

‘Private enterprisemust work with rail on coal transport’Grindrod offers flexible solutions

Pieter Venter ... We are working hard to improve terminal efficiency.

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Action plan addresses Beitbridge border issuesBy Liesl Venter

An action plan to address the numerous issues and problems at the Beitbridge border post between South Africa and Zimbabwe has finally been drawn up and is to be circulated to stakeholders.

Beitbridge has been under severe pressure for years. According to Barney Curtis, executive director of the Federation of East and Southern African Road Transport Associations, after much investigation a six-page document on the problems and the potential solutions for Beit Bridge was drawn up and circulated among all the stakeholders to ensure it covered all issues.

“We asked the Regional Trade Facilitation Programme to facilitate and fund a workshop earlier this year where we brought on board as many of the high-level stakeholders from both countries as possible,” says Curtis. “SADC was also asked to participate and it then endorsed and adopted this process.”

A contractor was appointed to do a situational analysis of the border post (infrastructure, procedures, bridges etc) and a task team was set up.

“We now have an action plan which describes the way of taking the border post forward, and includes plans for a one-stop border post. It is in the process of being circulated to the stakeholders before it is finalised and implemented.”

NOVEMBER 2009 | 17

By Liesl Venter

Mozambique’s grand old dame, the Polana Serena Hotel, is not only getting a much needed

facelift, but is also stepping into the 21st century.

According to Karim Merali, general manager of the hotel, the refurbishment process, which started in January this year, will be completed by no later than mid 2010 before the second phase of renovations kicks off. These will be finished by the end of next year and when the dust finally settles Mozambique will offer a truly five star hotel.

“The building was in much need of renovation and it was also time to upgrade facilities and contribute towards raising the standards of quality on offer in Mozambique,” says Merali. “On completion we will have a new health club and spa as well as conference centre of international standard.”

He said it was important that the outside structure of the hotel remained. “We do not want to change the beauty of the Polana Serena and the outside façade will be as distinctive as ever.”

Costing an estimated $30-million, the hotel will be modernised and will be able to cater to its international business travellers at all levels.

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Africa investing billions in infrastructureBy Ed Richardson

African countries are investing billions more on infrastructure development than commonly believed, according to a new World Bank study “Africa's Infrastructure: A Time for Transformation”.

According to the study of 24 African countries (including South Africa), they are spending a total of around US$45-billion a year on infrastructure projects. Most of this is domestically financed by African tax payers and consumers – making African utility costs among the highest in the world.

18 | NOVEMBER 2009

By Liesl Venter

While the introduction of a direct service connecting Asia to Madagascar and

Maputo has not been smooth sailing at all times, it has been received well and feedback so far has been very positive, says Christopher Crookall, managing director of Maersk Mozambique.

He says volumes are slowly picking up on the new service which since the end of July has seen a vessel a week docking at the Port of Maputo.

“We did not expect the new service to be full from the get go and we have had our share of landside teething problems, but overall the service has been welcomed by clients and role-players alike.”

According to Crookall, Maersk is actively involved in negotiations with role-players to improve the quality

of the entire supply chain. “For the first time cargo is being containerised inland and then exported via the Port of Maputo and it is important that the inland supply chain runs smoothly.”

One of the problems has been that while large numbers of bookings are received weekly for the vessel, often they don’t turn into a shipment due to delays in the supply chain.

“We are all working together to improve the service,” says Crookall. “And volumes are picking up. It makes economic sense to use the Port of Maputo, and once people realise they can save significantly by shipping through this port, we expect to see growth.”

He says while there are no immediate plans to extend services to the Port of Maputo, as demand increases more direct connections to the rest of the world will become a reality for the port.

“We are not going to over-extend at present, but as the Maputo corridor becomes more efficient, the demand for direct services will increase and we will aim to service that demand.”

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Christopher Crookall ... ‘Maersk is actively involved in negotiations with role-players to improve the quality of the entire supply chain.’

NOVEMBER 2009 | 19

With Africa’s economic growth in 2010 likely to overtake the global average,

companies should be developing the opportunities presented by this sizeable under-developed market, says Safmarine’s Africa region executive, Jonathan Horn.

“Doing business in Africa presents a different set of challenges, but the

rewards are there if you take the time to understand the market, have a long-term commitment and a very clear idea of what you want to achieve.”

Horn believes that the continent should be pulling out all the stops to encourage investment, with a particular emphasis on job creation, by improving tax and labour regimes and quality levels.

“The reality is that there are emerging economies across other continents competing for the same investment, and as Africans, we need to instil confidence and ensure the investment package we present is the most attractive.”

On the shipping front, Horn forecasts increased demand for vessel space on all services to Africa as cargo volumes, both in and out of Africa, start to pick up. “But there is still a degree of uncertainty as to when the recovery signs emerging will gain substantial momentum,” he says.

He believes it is likely to take some time for cargo volume growth levels to return to the highs experienced in

the years up to mid 2008.“The current global economic crisis

has been significant and its impact widely felt. This has led to a dramatic change in consumer behaviour and consumer confidence. The purchasing and consumption patterns – which drive commodity demand, a key component of current Africa trade – of the future are likely to be very different from those of the past.”

Although demand for space has improved, Horn foresees no significant change in the available capacity picture in the near term. “An increase in capacity will only be justified by sustainable demand at freight rates which justify additional deployment.”

In line with the Safmarine approach of growing its business in tandem with that of its customers, the line recently introduced a new fully containerised service (225 service) which provides a quick, direct link between South Africa and the West African markets of the Ivory Coast, Nigeria and Ghana and the Safari 3 service which links the Far East, Indian Ocean Islands and

Mozambique (Maputo). Horn says that while Safmarine

has experienced modest growth in the intra-Africa, West and East Africa trades, the general picture for the South African trades has not been as rosy.

“2009 to date has been a very tough year for South African importers and exporters. Volumes have been down by 20% on 2008 levels and we’re hoping to see an improved picture in 2010. We’ve already seen demand for space firming and an increase in cargo volumes in and out of South Africa in what has traditionally been our peak period, which is an encouraging sign.”

Another area starting to show signs of improvement is that of freight rates.

“Freight rates, across all of our African trades are very – in fact unsustainably – low and have been for most of 2009. We are confident however that the situation will improve in the balance of 2009 and into 2010 as demand strengthens and GRIs (general rate increases) are accepted by the market.”

‘Africa must present an attractive investment value proposition’

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Jonathan Horn … ‘It will take some time for cargo volume growth levels to return to the highs of the years up to mid 2008.’

20 | NOVEMBER 2008

By Alan Peat

Port congestion in Angola has diminished as recession bites into traffic volumes on the

trade, according to Andrew Thomas, CEO of Ocean Africa Container Line (OACL).

“Berthing delays in Angola have reduced significantly over the past few months,” he said, “as a result of this decrease in throughput.”

He attributed this declining throughput to a lack of foreign currency available in the market. This being a consequence of the lower oil price in the global economic downturn

– with the bulk of the country’s export income coming from its crude oil production.

“Shippers should take full advantage of this improved fluidity,” Thomas told FTW, “as this opportunity to move their cargo into Luanda with minimal delays is temporary.”

However, he is also confident that inherent demand in Angola remains strong.

“In conjunction with the increasing oil price, continued capital investment and commercial events like the 2010 African Cup of Nations will result in a correction of the forex shortage dilemma. As a consequence it is expected that in 2010 throughput and congestion will increase in line with growth in the demand for imports.”

With global volumes declining at the end of 2008, Thomas suggested that many shipping lines looked to enter and service the SA-Angola market by offering what he termed “unsustainable rates”. This, according to his calculations, had the unwelcome effect

of eroding the market rate substantially. “We have seen the exit of some of

these lines,” said Thomas, “and expect to see further departures before the end of 2009, mostly as a result of a market miscalculation.

“These lines have come and gone through the years,” he added, “with their failure as a result of the lack of understanding of this complex market. Unlike Ocean Africa, which has serviced this market consistently for decades and is still operating a regular service into this region by forging long-term relationships with its clients and authorities. This has stood all concerned in good stead.”

Thomas also has an optimistic outlook on the African east coast.

He told FTW that he expected the developing Mozambican economy to see increased demand, not just as a transit port for inland countries, but for local consumption.

“The significant investment into the Moatize project by Vale and the construction of a coal-fired power

station are just two of the contributing factors to this expansion,” he said. “As a result of significant infrastructure investment, improved fluidity of the ports will permit the market to develop without the historic restraint of inadequate port facilities which limited throughput and, in turn, market growth.”

Ocean Africa has readied itself to meet this developing market.

It recently deployed an additional vessel to complement its existing east coast service, which Thomas is confident will cater for the expected increase in demand.

“The additional capacity,” he said, “will improve an already efficient weekly container service to the ports of Maputo, Beira and Nacala – with the added benefit of being able to carry breakbulk such as project cargo, machinery, large vehicles or similar.”

Ocean Africa also has the advantage of offering a cabotage service as a result of its major shareholding in Mozambican subsidiary, Mozline.

Shrinking volumesreduce berthing delays in AngolaOACL ready for developing Mozambique market

Andrew Thomas … ‘Expect demise of ‘opportunists’ on SA-Angola route.’

FTW4575

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Emille Kamffer Assistant warehousing

solutions manager

Moshe Zulberg Marketing representative

NOVEMBER 2009 | 21

By Alan Peat

In a sign of growing confidence in the region, Wilhelmsen Ships Service (WSS) has just established

a presence in Mozambique’s capital port city of Maputo.

This is part of a longer-term plan to set up branches at the other main port cities along the country’s eastern seaboard, including Beira, according to Durban-based MD, Prean Pather.

“The company already has a strong presence on the east coast of Africa, from Egypt to South Africa,” he told FTW, “and this latest move is designed to keep up with the growth in Mozambique’s economy.”

Although the country is currently sharing the weakening effects of the global recession, it has been earmarked as an area of considerable future potential.

Said Pather: “In recent times, increased volumes of traffic from SA, Swaziland, Zimbabwe and other landlocked countries in Southern Africa have been directed through Mozambique.

“If the fragile political agreement in Zimbabwe holds, and the Zimbabwe economy returns to its former productivity, imports and exports through Mozambique will soar.”

He also pointed out that the shorter distance to the main mining areas of SA makes this a cost-effective route for both imports and exports inland. Furthermore, the increased pressure on SA ports has encouraged more operators to send cargo through Maputo to inland destinations.

“Initially, the office will specialise in ship’s agency work and maritime logistics,” he said. “Later in the year, we will supply technical services and products from our Unitor range – and we will be the only ships’ service company in Mozambique with such a broad spread of products and services.”

The establishment of the Maputo office followed an in-depth evaluation of the market.

Said Pather: “We listened to our customers and determined what their needs were in this area, particularly

in the field of maritime logistics.”The opening of the Maputo

office is the culmination of all the company’s efforts and commitment to expanding its global network to partner with its customers in this region, according to Bert Stadler, commercial and projects manager in SA.

“Strategically,” he said, “Maputo is the right place for us to have a presence in order to grow our

business by servicing cross-border movements and customers.”

This was supported by Jaun Bezuidenhout, the operations manager in Maputo.

“One of the newest Wilhelmsen Ships Service projects,” he told FTW, “this office opened in a very adverse period.

“The potential is there and we can only expect that the office will grow in the very near future.”

Wilhelmsen makes its mark in MaputoPart of longer-term plan to expand its network

Local and long distance rail and road transport

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Vessels leaving and entering the Port of Maputo are a welcome sight in Mozambique.

22 | NOVEMBER 2008

By James Hall

Until Swaziland is incorporated into South Africa (or the other way

around if the Swaziland Border Adjustment Committee that is eyeing sections of KwaZulu/Natal and Mpumalanga have their way), the landlocked kingdom is like a mountain to SA shippers – either you go around or burrow through.

The country itself has recognised its geographical position as either a hindrance or facilitator of SA cargo headed from Gauteng to Durban and Maputo, and chooses to be the latter. For more than a decade major investments have been made to expand the national highway network. A key section was opened earlier this year, a bypass road around downtown Mbabane that was intended to save time for traffic from Oshoek Border Post, the most heavily utilised entry point for road freight coming from Gauteng to the Matsapha Industrial Estate outside the commercial town Manzini. The section of highway from Oshoek to Ezulwini, an upscale suburb immediately east of Mbabane, is slated to become a toll road early next year.

The Oshoek Border Post may become a 24/7 operation at year’s end, which would greatly aid SA/Swaziland road traffic and mirror the 24/7 operations that went into effect on the opposite side

of the country earlier this year at the Mhlumene Border Post with Mozambique. Travelling through Swaziland, Gauteng to Maputo road traffic will move more quickly than via any other route, and do so around the clock.

Swaziland Railway earns significant income from the transhipment of SA goods through the country, and one day when a rail line is extended west from Oshoek to Gauteng, the rail network will be even more advantageous to SA shippers.

Travellers by air into and out of the country are already bemoaning the inconvenience they will face when Swaziland’s airport is relocated next year to the dusty lowveld hamlet of Sikhupe, an hour or so east of the current airport at Matsapha. But government planners say the new facility will allow for the landing of large cargo-bearing aircraft, making larger scale air cargo transport a possibility in the country for the first time.

With the proliferation of traffic that the new highways have brought have come calls for increased safety standards, including vehicle roadworthiness inspections to address the spate of fatal accidents caused by malfunctioning trucks.

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The National M3 highway snakes around sacred Mt Mdzimba whose caves are used to bury Swazi monarchs.

NOVEMBER 2009 | 23

By James Hall

Surveying the road transport business into and out of Swaziland from the perspective

of a principal player on the route for 20 years, Mark Svenningsen, managing director of Express Cargo, said the most promising advance had been the electronic clearance of goods at the landlocked country’s border posts.

“We at Express Cargo are using ASYCUDA-PLUS. It’s EDI (Electronic Data Interchange) and allows electronic clearing and forwarding via the Asycuda system. The system was put into place this year by the customs service. It’s got the normal teething problems, but it will bear fruit by shortening transit times at the border,” said Svenningsen.

Handwritten documents have always slowed the transport of goods through border posts, but have become a real problem as road freight volumes from SA have increased. Swaziland’s EDI system has been in operation for enough months for customs agents to perform reasonably well with it as the annual upswing in shipping hits.

“We are coming up to the busy season, from September onward to mid-

December,” said Svenningsen.For the road freight consolidator

that keeps a fleet of local collection and delivery vehicles and 20 long-haul Super Link trucks busy on its daily route to and from Gauteng from Swaziland (the trucks are also used to service Express Cargo’s routes from its Johannesburg facility to and from Botswana and Lesotho), volume is

down from last year.“It’s the recession. We see it in our

overall service. White goods, clothing, and the other items we mainly transport are down,” said Svenningsen.

But long-time shippers have remained with the long-established Swaziland road transporter.

“Customers have come to depend on our reliability,” said Svenningsen.

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Marc Svenningsen ... electronic clearance shortening transit times at the border.

‘A good freight forwarder is a crucial part of the mix’By Liesl Venter

Forging strong partnerships with freight forwarders is a sure recipe for successful exporting into Africa.

John Ferreira, head of exporting at Fresenius Kabi, a company that sells and markets pharmaceuticals in the intensive care and hospital environment, says that a freight forwarder that is trustworthy and reliable as well as top of its game goes a long way to ensuring success.

“It is about the invisible supply chain – the one where everyone is doing what they do well. A good freight forwarder will keep you informed of any changes in the system, of expected arrivals and departures, possible delays or any other issue that arises.”

Ferreira says hand in hand with this is the need for a smooth manufacturing plant.

24 | NOVEMBER 2009

By James Hall

Swaziland transport firms have had to adjust to the fortunes of the country’s

textile industries, which have

suffered from global competition and the current recession, lowering volumes of inputs transported to the factories and finished goods going out.

For ten years, textiles have

been the driver of the country’s manufacturing sector. But Swaziland has other items to transport that have withstood the economic decline.

“Sugar, some textiles still, timber, fertiliser, coal, and food-stuffs – these are the big movers,” said Sikelela Vilakati, managing director of Chrisilda Transport in Matsapha.

Chrisilda’s record of moving textiles brought in business from Swaziland’s sister textile firms in Lesotho, now a regular route for the company from Johannesburg and Botswana. The only Swazi-owned breakbulk carrier makes the five-hour trip from Matsapha to Durban and back every day.

A fleet of 42 vehicles, comprising flat decks and side tipper trailers, are maintained in a fully fledged workshop within the company yard adjacent to its offices.

“Other than clothing, Swaziland has relatively few things to ferry out, though the potential is there. We move a lot of timber to Johannesburg, beverages from

Johannesburg to Maputo, and do odd loads of sugar. But there is potential. Illovo (sugar plantation) is expanding and will be exporting more,” said Vilakati.

“The investments these companies are making in their operations show they are here to stay and there will be more business for transporters in future,” said Vilakati. “We have the capacity to service the whole of Swaziland and more. As such, we are exploring new avenues by going into Africa.”

While other road transport firms tend to import cargo into the country, Chrisilda services Swaziland in both directions, finding products to export.

“We prefer full loads, although we do partial loads – but as you know that means quite a number of stops and paperwork, yet turn-around time is of the essence in our industry. We are in a very competitive industry and to survive you have to cut down on dead kilometres at all costs,” said Vilakati.

Timber and textilesstill big Swazi movers

Sikelela Vilakati … ‘Exploring new avenues by going into Africa.’

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NOVEMBER 2009 | 25

By James Hall

One of the largest transporters in the region, Cargo Carriers has marked 48 years of

operating in Swaziland by expanding its support of local owner-operated driving initiatives. The company launched its cane transport operations in Swaziland when the country’s sugar industry began in 1961, and later launched similar operations in KwaZulu Natal and Mpumalanga (Malelane) regions.

The division operates from five registered depots strategically placed throughout Swaziland and

Mpumalanga, (Big Bend, Simunye, Mhlume, Malelane & Komatipoort) and currently transports in excess of 3 million tons annually into the respective mills, with a fleet in excess of 160 units. 350 Swazis benefit from employment and training opportunities.

Cargo Carriers’ Swaziland empowerment scheme includes five Cargo Carriers Swaziland truck drivers operating as owner-drivers, while a further 11 existing Swaziland tractor drivers have been appointed as tractor owner drivers. The aim of the programme is to empower drivers who would otherwise never have an

opportunity to become successful entrepreneurs, says owner driver manager John Sprenger. “Candidates are identified and trained as drivers, and acquire experience which they in turn pass on to their families and local communities. The new owner-driver programme commenced at the start of the new 2009 Swaziland cane crop season with 11 candidates.

“The owner-driver programme is all about a continuing partnership – where the drivers are empowered to determine their own success and future, while at the same time leading to increased productivity and enhanced service levels. This is not boardroom

empowerment – instead it is aimed at a grassroots level because that is where the true success lies,” said Sprenger.

Cargo Carriers sugar division provides logistics services across the entire supply chain within the sugar industry, ranging from mechanical harvesting, infield loading and haulage, direct to mill and zone to mill cane haulage and the transportation of the industry’s finished products, namely alcohol, bulk sugar, bagged sugar, molasses and fuel.

In line with its commitment to safety, health, environment and quality issues, the company is ISO 9001:2000 and 14001:2004 accredited.

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Overnight transporter would welcome 24-hour border post By James Hall

Acquiring a reputation for speed and reliability is every overnight delivery service company’s goal. But a single missed delivery is enough to tarnish the credibility on which a firm’s business relies.

“We have to move every day because we offer a service. People know that if they use Speedy they’ll get their deliveries that day. We

go every day even if our truck isn’t full,” said Willie Stuart, owner of Speedy Overborder Services of Swaziland.

“We can’t allow any compromises. A lot of our customers deal with Mozambique. They say to their own customers, ‘Come at twelve and your shipment will be here. We’re using Speedy’,” said Stuart.

Ensuring reliability has led Stuart to focus on transporting into

Swaziland from SA. “We’re not in the export business. Our trucks go out empty, always have. We tried doing exports but found that a truck could be stuck at a customer waiting to load and the rule is we can’t be late at the border,” Stuart said.

A company truck arrives at Speedy Overborder’s Johannesburg office in the evening, loads, and returns immediately to the Swaziland border, where the driver sleeps at the locked

gate until the 7am opening, when he is at the head of the customs queue. By mid-morning the truck arrives at Speedy Overborder’s main office at the Matsapha Industrial Estate. Consignments are moved to delivery vehicles for quick transport to customers.

That routine may end if the Oshoek border’s extended hours planned for the holidays remain as a permanent 24/7 operation.

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26 | NOVEMBER 2009

By James Hall

When Lesotho announced its intentions early this year to develop a rail system

to enable the country to act as a transhipment point for SA goods, transport officials cited the success of Swaziland Railway making Swaziland an important transhipment point for SA cargo moving from west to east and back. SA cargo can also be switched

northeast to Maputo via Swaziland.“We are geared to move bulk cargo,

with our specialised wagons or in containers,” said Stephenson Ngubane, director of operations at Swaziland Railway.

Ngubane noted that moving bulk cargo by rail was still the most economical way to transport such material as coal, sugar and textile inputs from Durban to Swazi factories. Timber and paper pulp are also moved

by a rail system originally designed to transport iron ore to the sea via Maputo.

Swaziland Railways leases five locomotives from Transnet Freight Rail and owns its own oil wagons. The country imports all its petroleum products via SA, thus making this commodity an important cargo for the railway. The company uses its own sugar wagons to move Swaziland’s top agricultural export and general wagons

for other goods, most importantly cement and wheat imports.

The railway’s expanding Matsapha Inland Clearance Depot has seen volumes rise from 2 500 TEUs early this decade to 15 000 TEUs annually.

Transhipment of SA goods remains a profitable business for the railway because Swaziland offers Gauteng shippers a 270km “shortcut,” diminishing by three days transit time compared to other routes to Durban.

Transhipmentsare big business for Swazi Rail

‘Riding the ups and downs is what it’s all about’By James Hall

The changing face of Swaziland’s Matsapha Industrial Estate mirrors the growth of the country’s industrial and transport sectors. From a farmer’s field a generation ago, a sprouting of factory shells and truck yards has expanded each year, with residents like Sharp Freight, the largest Swazi-owned clearing and forwarding firm, moving with

the times.“Business is sometimes seasonal,

it can be up or down, but the general trend is toward growth – in this business, in the economy, at Matsapha,” said Jabu Vilakati, one of Sharp Freight’s founding partners.

“We move general goods. Textiles – inputs coming and exports to take out – are seasonal, and are down this year. But we’ve been busy overall, carrying everything that comes

through the door. A transporter must do that, and have the right equipment and also be prepared to ride the ups and downs of this business,” said Vilakati.

Sharp Freight handles airfreight for clients who need immediate deliveries. The firm’s routes have expanded into Botswana and Lesotho, but SA remains the primary destination and point of origin for Swaziland-bound goods.

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Jabu Vilakati ... general trend is growth.

NOVEMBER 2009 | 27

By Alan Peat

W ith the combined might of the fleets of CMA CGM and Delmas

Shipping in play, the shipping group is focusing on major development of its Southern African market, according to Rhett van Zyl, MD of the CMA-CGM Shipping Agency in SA.

And the Port of Walvis Bay in Namibia is one distinct area of this focus – with the two lines’ ASAF, Midas, WAX and West African feeder services all to call at the port at a frequency of about two-to-three services a week. The shipping group stands to shortly become the port’s biggest operator.

“We have made Walvis a major transhipment hub for the two lines,” said Van Zyl, “and are targeting 80 000-100 000 transhipment boxes a year from next year.”

He is also currently busy opening up the market on the

Walvis Bay corridors linking Zambia and the Democratic Republic of Congo (DRC) to the port and their regional and overseas trading partners.

And the lines offer their own connections to these foreign shores, with links to Europe, the Far East and the Middle East, and all its usual transhipment options in all these regions.

CMA-CGM and Delmas also have development plans for a number of other specific countries in the continent.

“We have two services through Mozambique,” said Van Zyl, “and have just opened an office in Maputo and have sub-agents in both Beira and Nacala – the two other main ports on the country’s eastern seaboard.

“We are also looking at opening offices in Zambia, Botswana and the DRC.”

And Van Zyl is fairly confident about market conditions in the SA shipping industry.

CMA targets massive growth at Walvis

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Satellite tracking reassures into-Africa shippersTracking truck movements and cargo delivery while monitoring border bottlenecks and en route emergencies is becoming a crucial imperative for transport firms and shippers, who need real-time alerts of the movement of their cargo. Moving a fleet out of SA and through SADC countries, Pietermaritzburg-based logistics company Manline relies on satellite tracking to keep tabs on its fleet – with Botswana, Mozambique, Zimbabwe and Zambia its busiest routes.

Manline’s satellite tracking system is manned by shift controllers and fleet trackers from the firm's Control Centre in its Pietermaritzburg head office. Data on the whereabouts of trucks and deliveries in SA’s neighbouring countries is received and disseminated from this cross-border facility. In SA, Manline’s depots are located in Isando, Van der Bjil, Germiston, Durban, Empangeni, Pietermaritzburg, Kokstad, Newcastle and East London

The varied composition of the Manline fleet – flat-deck

superlinks, tautliners bulk (tipper) trailers, tankers and smaller distribution vehicles – reflects the needs of customers whose cargo includes consumer goods, industrial inputs and products and agricultural goods.

Regardless of their type, all vehicles are fitted with real-time satellite tracking and on-board computers.

Fleet Trackers at the Control Centre monitor data movement to adjust routes and guide cargo more efficiently to its destination, while allowing greater vehicle productivity. The Control Centre team, fleet-tracking technology and flexible operational processes can lead to cost savings for its customers, says marketing co-ordinator Lauren Hughes.

Manline developed its own software programme, MAX (for logistics Management and Execution) to provide 24/7 internet-based data to shippers who require real-time information on their cargo.

“Customers receive status reports via SMS messages, fax, e-mail or secure web interface,” said Hughes.

28 | OctOber 2008

By Terry Hutson

Overbearing bureaucracy, bribery and corruption are endemic across the continent.

In Africa, it may be said, greed rules. But the equally sad part is that the guilt doesn’t lie exclusively with one side, as with government-appointed officials and bureaucrats. Instead, many shipping lines and transport companies and their respective agents are equally responsible by aiding and abetting the practice when they willingly go along and pay bribes that are passed off as a cost of doing business.

“It’s either that or our ships wait outside a bit longer,” and “if we don’t play the game then ways are found to further delay clearing the cargo,” are just two of the reasons heard in the course of preparing this article.

If this sounds like a piece of journalistic exaggeration, consider recent reports that described a strike by clearing and forwarding agents in Nigeria’s Tin Can Island that resulted not simply from bribes being taken, but because Nigerian customs officials had become greedy and were unilaterally doubling the amounts they were demanding.

The fact that something above and outside the official tariff book rate had to be paid was never an issue – the Nigerian clearing and forwarding industry and their clients, the shippers, are by now well used to this and play the game as a matter of course – another ‘cost of doing business’ that is simply factored into the landed price. What the C&F agents finally took umbrage over was the barefaced greed of officials.

In another recent case an editorial in a Tanzanian newspaper welcomed the news of the overturning of a monopoly at the port of Dar es Salaam, saying it believed this would bring about improvements in efficiency. The editorial added that it hoped the authorities would now turn to fighting graft and corruption within the country’s transport chain.

‘Infrastructure not the cure-all for regional competitiveness’

A lot of emphasis has rightly been placed on improving Africa’s infrastructure in its ports and railways. But it’s also been said that infrastructure is not the cure all for regional trade and competitiveness, and that governments play a crucial role and can undo any vision of a successful and competitive sub-continent through unsupportive policies and poor governance.

Nevertheless, infrastructure, or its

lack, remains an equally vital cog in ensuring that ports, railways, and road networks along with other transport systems are able to operate with efficiency, especially across the wider integrated regional partnership of African trading nations.

A report entitled ‘Africa and the World Economy – the National, Regional and International Challenges’ presented by the Dutch research centre Fondad, points out that it costs the same to clear a 20-ft container through the port of Dakar as it does to ship the same container from Dakar to a north European port. The same report said that every day spent in customs added 0.8% to the cost of goods and that Africa had the longest delays in the world, with an average of 12.1 days across sub-Saharan Africa. For some ports those delays can amount to 30 days or more.

“Excessive bureaucracy, high insurance costs, cumbersome customs procedures and outright corruption by public servants using bribes, official and unofficial checkpoints escalate transport costs in Africa,” the report stated.

According to Greg Mills, strategic adviser to the Rwandan presidency and head of Johannesburg’s Brenthurst Foundation, in Rwanda about 45% of the country’s export value comprises transport and insurance costs, compared with an average of 14% for other landlocked countries.

Bureaucracy the root cause of high costs and delays

Mills said that throughout Africa the lack of 24 hour border operations added to the costly delays but the root cause of delays and high costs in Africa was not the shortcomings of regional routes but unwieldy bureaucracy, government

‘Industry guiltyof aiding and abetting climate of corruption’Good governance is crucial for Africa’s competitiveness

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With a few exceptions most sub-Saharan African port systems have been slow in keeping up with the surge in international trade and its regulatory and technological aspects.

OctOber 2009 | 29

‘Industry guiltyof aiding and abetting climate of corruption’Good governance is crucial for Africa’s competitiveness

policies and the simple economics of business.

But Africa is of course not all doom and gloom. In recent years the continent has been facing up to its logistical challenges and has taken impressive steps to redress its infrastructural shortcomings. The sheer magnitude of infrastructural spending that is going on throughout the continent and especially in its harbours has begun to transform ports on Atlantic and Indian Ocean seaboards, although it remains a slow process. Probably at no time in Africa’s history has so much investment been made in upgrading port and terminal facilities.

Yet difficulties remain. The World Bank pointed out in a paper that West Africa had 24 significant ports stretching between Mauritania and Angola, many of them placed in areas that are difficult to dredge to the requirements of modern deep-draught ships, while others like the Lagos ports are limited by their proximity to urban areas, rendering them unsuited to the needs of modern shipping. The document stated that a single modern four or six-berth port operating to the efficiency of a Far Eastern port would have the capacity to handle all of the region’s container traffic and suggested that the hub system might provide a logical solution.

The other challenge facing the continent is that most of Africa’s ports are poorly equipped to take advantage of the multi-modal aspect of containers, lacking the integrated rail and road links with their hinterlands and neighbouring landlocked neighbours. This is amplified in the long dwell times experienced at many African ports, which increases the amount of congestion around the ports. Mills reported that it took a minimum

of 72 hours to clear a container in Mombasa, whereas in Singapore it took a little over two minutes.

Port systems have failed to keep pace with trade surge

With a few exceptions most sub-Saharan African port systems have been slow in keeping up with the surge in international trade and its regulatory and technological aspects, leaving the sub-continent to lag behind other world regions. Many of the region’s ports have exceeded their design capacity and most lack the supportive logistical systems of efficient rail and road networks. Even South Africa has begun to lag in this respect. Pressure from international container operators has seen a crash course in upgrading and improving infrastructure, but institutional and regulatory reform remains slow across most regions.

A number of African countries turned to privatisation as a panacea for all their logistical problems, but while there has been some success in the operation of ports, terminals and railways, the challenges of Africa are proving too great for many international operators, leading to a growing dissatisfaction with privatisation and a move by respective governments to take back the terminals and railway networks. Already a number of concessions have been cancelled or reworked.

As with other parts of the world the current economic downturn is to Africa’s advantage, creating breathing space in which port and land transport reforms can be introduced and completed, although there is always the inherent danger that with the pressure relieved some of these projects may be relegated to the back burner.

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With a few exceptions most sub-Saharan African port systems have been slow in keeping up with the surge in international trade and its regulatory and technological aspects.

30 | NOVEMBER 2009

On Africa’s east coast the port of Djibouti has embraced privatisation, with DP World

taking over the operation of the port and establishing a successful regional container hub.

Further south the port of Mombasa in Kenya, which is one of those that turned its back on privatisation, has embarked on a programme of dredging and a Japanese loan of US$200 million has secured the construction of a second container terminal.

Mombasa has endured periods of chronic congestion, worsened by political upheaval that disrupted the movement of cargo from the port to neighbouring Uganda.

Mombasa’s second container terminal is expected to be completed by 2013 and will have capacity for 1.2 million TEUs. The existing terminal handled 615 000 TEUs and the port a total of 16.5mt of cargo during 2008.

Tanzania’s principal port of Dar es Salaam recently cancelled an exclusivity concession clause with container terminal operator Tanzania International Container Services (TICTS). The new agreement enables Tanzania to bring in other terminal operators or revert to running the remainder of the port as a state-owned entity once again and stems from widespread dissatisfaction over the

progress of privatisation at the port.Uganda, Kenya and Tanzania’s

flirtation with rail privatisation quickly hit rocky ground with indications that Kenya and Uganda clearly wanted the rail concession held by Rift Valley Railway cancelled, while in Tanzania the concessionaire Rites of India has been forced to defend its performance despite being less than two years in operation and having inherited a broken, rundown railway operation.

In Mozambique the ports of Maputo and Nacala experienced similar pressure from government and other national bodies amidst an underlying opposition to the principle of state-owned corporations being left in the hands of foreign operators.

The American concession holder for the Nacala railway and port company, itself under stress, sold out to local interests, while in Maputo the British-controlled operator of Maputo Port Development Company, also under pressure from government, sold out

to South Africa’s Grindrod Group. Grindrod subsequently entered into an operating agreement with international terminal operator DP World.

Only at the port of Beira, operated by Dutch-controlled Cornelder, does it seem that there has been an acceptance of private operation although not a great amount of progress is apparent with regard to increasing the capacity and performance of the port. With the refurbishment of the former Sena railway and the advent of large-scale coal exports from the Moatize district through the port of Beira from 2010, efforts are now turning to dredging the port to more acceptable levels.

In Namibia Walvis Bay continues to be a success story with improved efficiencies and a huge step forward in ship repair, although efforts to attract increased shipping and meaningful volumes of trade along the respective transport corridors into Botswana, South Africa, Zimbabwe, Zambia and the DRC have been marginally successful – but it’s still early days.

Angola’s ports remain problematicAngola’s ports remain hugely

problematic in terms of delays and congestion. Of the country’s four main ports – Luanda, Lobito, Namibe and Malongo – Luanda has been described

as one of the world’s most congested ports, despite in excess of US$100 million being spent on upgrades aimed at reducing delays.

Angola’s northern neighbour the DRC is unique in that despite having over 9 000km of common border, it has a mere 40km of coastline. Matadi is the country’s principal port. Although fairly well equipped, the port has a restrictive draught of 6.4m.

The Congo’s (Brazzaville) main port is Pointe Noire, approximately 150km north of the Congo River, and is served by an operating railway into the interior. This is one of the few deepwater ports in West Africa with a draught up to 13.2m and is also one of the better equipped ports with nearly 5km of quayside. About three million tonnes of cargo is worked annually. Construction is due to commence early in 2010 on a new container terminal which will be managed by the French Bolloré Group on a 27-year concession.

Douala in Cameroon is central Africa’s busiest port. The port is connected to the capital Yaoundé by rail and road. Interconnecting highways linking Cameroon, Congo, DRC, Gabon, Equatorial Guinea and Central African Republic are planned in an effort to strengthen regional integration in central Africa.

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OCTOBER 2009 | 31

By Liesl Venter

The world wants what Africa has to offer – and therein lies much opportunity for logistics

companies such as RB Freight Management.

Managing director Richard Barry says with the many natural resources on the continent – along with its increasing consumer base – business opportunities are always evolving.

“The recession has slowed growth and dropped demand almost across the board, but as demand picks up again there are many opportunities to capture the new trade. Many companies shy away from dealing with Africa directly due to the many challenges faced when operating on the continent. In some respects it remains a niche market.”

Barry says while the volume of mineral exports dropped dramatically, trade volumes are once again increasing.

“Our figures compared to 2008 are not as good, but business is rapidly picking up and the usual end of the year rush seems to be materialising.”

Barry says Africa does however need to address poor infrastructure – roads, railways and telecommunications – to continue attracting business. “Poor roads and almost non-existent rail systems in many parts of Africa, coupled with world oil price trends, result in high and constantly rising transport costs.”

This, he says, is further affected by congestion at all the major ports – creating costly delays. “Poor telecommunications can also cause trouble. Many governments have unnecessary red tape which can slow down shipments and incur extra costs. And corruption in Africa remains a cause for concern.”

With expectations of providing a more complete logistics service, RB Freight Management is ready to embrace the opportunities and increase its foothold.

“We specialise in trade to and from the Far East and Africa, and we believe that it remains a fun and exciting place to work. Any person looking to breach new frontiers or establish something new should be working in Africa.”

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By Liesl Venter

Despite a global recession that saw the mining industry severely affected,

SACD is expanding its warehouse to handle more products from the north of South Africa’s borders.

According to Dennis Trotter, SACD regional director, the decision was taken despite the recession as all expectations are that 2010 will be a good year.

“The warehouse will be fully operational from January 2010. It has been a tough year, but by applying good management strategies to deal with cost controls we are able to expand and that means we will be around to take on the challenges of the future and the expected growth in Africa.”

SACD Gauteng has handled Africa export cargo for many years. Initially the company focused on agricultural products, but made a successful switch to predominantly mineral products because this was not a seasonal commodity affected by the weather.

“The recession has been a challenge as the commodity prices collapsed and cargo stopped moving. The only consolation was that the warehouse has been full – waiting for the prices to recover,” says Trotter. “At the moment everything is going out quicker than it is arriving, partly due to some mines that have closed down and also an apparent shortage of vehicles on the routes we serve. But the good news for us is that things are moving again and we expect to be back to normal in the next six months.”

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Dennis Trotter … ‘Everything is going out quicker than it is arriving.’ Photo: Tijana Huysamen

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34 | NOVEMBER 2009

By Liesl Venter

The handling of traffic into Africa has always come with challenges,

but innovative and interesting solutions are part of the package.

This is according to Alwyn Nel of Kingfisher Freight who says ever increasing logistical demands on transporters do take their toll.

“The challenges in Africa are multiple with more obstacles being added to the pot. These include customs delays, certification, legal compliance, duty payments, port congestion and the shortage of space on airfreight.”

But, says Nel, Africa remains a continent with opportunity.

“South Africa is a major contributor and supplier of necessary items to its neighbours and that provides much opportunity,” says Nel. “If one looks at customs for example,

the fact that service delivery at border posts and ports of entry is so slow and cumbersome could be related to the inability of revenue departments to maintain pace with ever-increasing burdens placed upon them as a consequence of increased trade.”

Nel says to ensure that logistical demands on transporters decrease it is important that customs officials receive proper training and facilities are set up to manage freight movement.

According to Nel, excessive operational costs are a threat to cost recovery – let alone profit – resulting in various sectors downgrading or removing routes to save money and to concentrate on more lucrative areas.

With the global recession having affected Africa, improved logistics is crucial. “Proper integrated logistical management is the key to survival in this climate.”

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By Liesl Venter

Importers and exporters are equally keen to find opportunities in Africa following the global economic

crisis that left very few countries unscathed.

According to Jade da Costa, director of Intraspeed, a company that has been operating in Eastern Central Africa for 25 years, initial thoughts that the crisis would not hit Africa were wrong.

“Business has been tough and volumes have been down. With African countries looking at GDP growth being cut to half, it has not been an easy year,” said Da Costa. “However the growth in many African countries is 2-3%, which means that the economy is growing at the same rate.”

He believes the time has come for freight forwarders and logistics companies to think outside the box and to give clients a solution to keep their businesses alive. “Everyone has to

work together through these difficult and testing times, but I believe this has given everyone a good wake up in terms of how to do things and think of things in the correct manner.”

Da Costa says Intraspeed was fortunate to be involved in certain industries that were not affected by the recession – which allowed them to stay afloat.

“We now have some expansion plans which we want to implement in the next few months. We recently opened an Intraspeed Zimbabwe office in Harare with a local partner which we believe will give us some scope.”

He believes with the mining industry expected to go back into the explorations, the times are changing and the recession may just be over.

“We need to remain optimistic,” said Da Costa. “I firmly believe that Africa is the sleeping giant of the world and volumes will increase in Africa in the new year. I don’t think the general peak season that we have

all been expecting will do anything new and nor will it compare well with the past. Volumes may increase going

into December, but it is going to be fairly quiet comparatively, until next year that is.”

Intraspeed opens Zimbabwe office

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Jade da Costa … ‘Recession may just be over.’

Recession forces shippers and forwarders to think outside the box

36 | NOVEMBER 2009

By Alan Peat

Africa is a major business playground for clearing, forwarding and shipping

company, Aquarius Shipping International, according to director, Robert Poverello.

“We conduct business all about the southern region, with a special emphasis on Zambia, the DRC, Malawi and the ports of Mozambique and SA,” he said, speaking from the new head office at Waterford Office Park in Fourways, Johannesburg.

With a major core business in shipping copper oxide mined in the DRC, but transported via Zambia, Aquarius has just marked a new route for some of its cargo movement. It has just moved its first shipment of minerals from Zambia via the northern Mozambique port of Beira to China.

“It was very successful under difficult time constraints,” said Poverello, “and we were pleased to get full tonnage shipped on board the

nominated vessel.”This cargo connection is being

nurtured by his fellow director, Rod Goncalves, who is heading up the ASI team formed to forge into the minerals market in Zambia and the DRC.

“He is currently looking at opening a new office in Zambia as well as negotiating a large contract with one of the major mining houses,” Poverello told FTW.

“We have also begun moving our first tobacco shipments from Zambia, which have run very smoothly so far.”

This is added to by ASI also moving large volumes of tobacco from Tete to Beira for the first time – another project which Poverello felt had “proved very successful so far”.

Another part of the Goncalves portfolio recently has seen him directing attention to the Mozambique ports.

“We have just opened a small office there,” said Poverello, “and Rod (Goncalves) has been entrusted with the formation of another office

in Beira which will open in January.”The Johannesburg arm of the

business has also recently been dealing with major “Into Africa” cargo consignments.

ASI has been handling large volumes of fertiliser through its warehouse facility in Johannesburg for end destination Malawi. And on the same trade route, the company has been moving polymers from SA to the Malawian city of Blantyre.

The Durban operation has also been active, with ASI due to

be moving into its new Durban warehouse this month – a facility situated five kilometres from the current airport.

It has also recently been exploring new business areas, intent on overcoming some of the effects of the economic recession on trade volumes.

“ASI has always been predominantly a tobacco forwarder,” said Poverello, “but we decided to expand our wings and enter into the handling of all commodities to sustain us during the quieter periods.”

Specialised teamtargets minerals marketAquarius opens office in Mozambique

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NOVEMBER 2009 | 11

In recent times the machinery, plant and equipment rigging company, Lovemore Bros

Logistics, has been busy developing the neighbouring African market for its services, according to director, Bruce Lovemore.

“Africa is not an easy place to work,” he said. “It is full of potholes and malaria, and it takes commitment and fortitude to venture north and survive, let alone prosper.”

But the company proudly markets itself as “riggers based in SA, looking to go rigging into Africa”, and has been steadily working its way into the continent over the past couple of years.

“Africa is becoming our backyard,” Lovemore added. “We know how to operate in these challenging conditions, and our teams are able to execute complex rigging work in remote locations.”

It can even work round the fact that power is unavailable

at its worksite, and Lovemore is adamant that an electrical outage doesn’t stop them. “For circumstances like that,” he told FTW, “we can resort to using our 225-ton modular gantry which runs off a gas bottle.

“Our mobility is hard to beat. We can be in neighbouring countries in 24 hours, with our rigging gear, ready to work.”

Twenty-one years since it’s launch, the company offers “a substantial infrastructure, a reliable fleet, modern equipment and skilled personnel that we are able to call on day after day,” says Lovemore.

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38 | NOVEMBER 2009

By Liesl Venter

With its target set firmly on Angola, one of the world’s fastest growing

economies, Chavda Freight is investing its money where its mouth is.

Hannes Rust, managing director of Chavda Freight, says thanks to its oil exports and the construction of housing and infrastructure in the past few years, Angola is a mine of opportunity for the Johannesburg-based company that provides clients with an integrated logistics service which includes imports and exports by air, sea and road.

“A large part of Angola’s infrastructure was destroyed in the wars or collapsed due to the scorched earth policy of the Portuguese when they abandoned the country in the seventies,”

says Rust. “This means that an enormous amount of effort is now necessary to reconstruct and re-establish this infrastructure. That opens up several opportunities.”

According to Rust, who has several Portuguese-speaking staff members, there is big potential in Angola, currently Africa’s top oil producer.

“Language always remains a barrier – and having employees who speak Portuguese is not only good for Angola, but also for Mozambique where we are currently sending a lot of cargo. This country is also a new market opportunity for us.”

Due to the congestion at the Port of Luanda, Chavda Freight is focusing much of its attention on road. With the Angolan government intent on building roads, houses, shops and hotels,

trade with the country continues to grow.

“We recently purchased a smaller vehicle with a payload capacity of eight tons to provide an alternative for the big demand for roadfreight express and consolidation loads into Angola,” says Rust. “This

vehicle, together with a few other contracted vehicles, will be carrying consolidation cargo and one vehicle will be leaving Johannesburg for Luanda every week. This will make us one of the few companies offering a door-to-door express service to Angola.”

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NOVEMBER 2009 | 39

By Joy Orlek

As the developed world battles the impact of the global financial recession,

companies involved in Africa have been more fortunate.

“2009 has been a good year for SDV,” said Johannesburg-based regional managing director Philippe Deneve.

“This year we’ve strengthened our foothold on the continent after winning several tenders for the management of container terminals, the biggest being Pointe Noire in the Congo and Cotonou in Benin,” said Deneve. “And we are working on several other tenders for the management of new container terminals and an inland container depot, both of which we’re confident of being awarded.”

While SDV has been involved in these countries in a stevedoring capacity, it has now extended its field of operation. “This gives us stronger control – and the agreements are based on 20-25 year

contracts which enable us to invest in modern handling equipment.”

The company has also extended its network on the continent with the opening of new offices in Namibia, Mozambique, Somalia, Ethiopia and Mauritania. It now has more than 200 offices in 41 countries in Africa.

And while talk of expansion may be unusual against the backdrop of the world recession – there’s good reason for it, says Deneve.

“Apart from South Africa, other countries in Africa have no manufacturing capacity, so while there may have been a decrease in the movement of some raw materials, Africa is a net importer of mainly basic commodities.

“They have experienced a decrease – but in small degrees – and for the past few months there’s been an upturn in imports and exports.”

For the southern region, Deneve points to the improving copper price which has led to new investment in some mines

in Zambia and the Congo. “This means people are ready to increase the production of copper – and the same is true of Mozambique and Angola where some big projects will start in 2010.

“Africa is a good place to be today and will be a good place to be for the next ten years at least.”

Bolloré Africa Logistics, through its main logistics network SDV, has no global competitors on this continent, says Deneve – “only local competitors based in one country or in certain cases a few countries.

“With an average of 50 years of experience in West and Central Africa, we have built a very strong network in the French-speaking countries, at the ports and inland destinations.

“Based on this solid foundation, we have now developed the same network in the English and Portuguese-speaking countries, with huge investments in the east and the southern region over the past few years.”

SDV gets more involved in container terminal managementNetwork extended with opening of new offices

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Philippe Deneve ... ‘Africa is a good place to be today.’

40 | NOVEMBER 2009

By Alan Peat

When moving things into Africa, TCS Logistics does things on a rather grand

scale, according to director, Rogan Brent.

Early in September TCS Logistics and Access Freight projects division moved four Komatsu 930E dump trucks from Durban to Chingola for a Zambian mining concern.

Four dump trucks don’t, when reading it, sound like a big cargo.

“But,” said Brent, “when you consider just how massive these machines are, then a different picture appears.”

And, when the actual load to be hauled to Zambia is described, the sheer size of such a project comes to light.

Together, the two companies had to execute the movement of a total of 36 abnormal truck loads – with the loads consisting of: four truck chassis at 50-metric tonnes each; the four

rock bodies – cut in half for ease of transport; loads of the massive 4-metre diameter tyres; then the smaller breakbulk cargo and containerised components.

Timing was also critical, according to Brent – with the vessel arriving in port on a Saturday morning at 02:00, and TCS having to have the 36 trucks lined up to receive the cargo on vessel arrival.

The company’s team, headed personally by Brent, worked non-stop from vessel arrival until completion of discharge to clear the holds, he told FTW.

“This,” he added, “included the welding of reinforcing and supports to the rock bodies for loading, as the rock bodies are asymmetrical and very difficult to load.”

But, by 19:00 the next day all direct discharge cargo as well as the breakbulk and containers were loaded and ready for dispatch. And, the following morning, the convoy of rock bodies, loaded 5.2-m high and 4.8-m

wide, departed Durban. It arrived on the outskirts of Pietermaritzburg at 09:00 and proceeded under 22 own and eight police escorts through Pietermaritzburg in convoy – bringing the city to a halt.

“The entire consignment was delivered to site without incident within 20 days, as per the contract agreement with the consignee,” said Brent.

These four Komatsu 930 dump trucks – in the top-five biggest in terms of size and capacity – have since been assembled on site and are working.

“This project was one of the many we carried into Zambia, DRC, Zimbabwe, Malawi and Botswana this year,” said Brent. “However, this particular consignment was of particular significance due to the nature of this cargo. The months of pre-planning paid dividends on the day.

“In line with our TCS motto, ‘Africa Just Got Smaller’, this marked another successful project delivered and another satisfied client.”

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In for the Long Haul

Perishable terminal feels the squeezeBy Liesl Venter

A bad crop combined with a bad market resulted in fruit exports out of the Port of Maputo just not reaching their target.

While an average of 80 000 pallets of citrus per year is generally exported out of Maputo, in 2009 Mozambique Fresh Produce Terminals (FPT) did not even achieve 60 000 pallets.

“It was a combination of factors,” says Paulo Franco, regional general manager of FPT. “If we had had a good crop it would probably have helped a bit as fruit does always find a market. But the global economic downturn combined with the crop was just not an optimal situation.”

Fruit exports across the country took a knock due to the global financial crisis.

“Fruit volumes have been down everywhere, not just here. In fact we have managed to hold our heads up and if next year’s crop is good, we expect to be back at our average or even better and get to 100 000 pallets.”

NOVEMBER 2009 | 41

By Liesl Venter

In Africa there is always something new on the horizon – and the opportunities are

endless.This is according to Hazel

Briggs, managing director of cross border freight brokers HB Services, who believes that listening to people talking is one way of identifying these opportunities.

“It is so important to become the link between the importer and the exporter – offering clients advice and being able to add value is what makes all the difference.”

Briggs says it is important though that Africa deals with her challenges. “It is unlike anywhere else in the world and often principals from countries in Europe don’t understand the continent and the way it operates. Even staffing issues vary here

and more compassion is required when dealing with both one’s own and other companies’ personnel.”

It is frustrating, says Briggs, but it is the African way.

“Much like border clearing delays by certain agents. These delays take place despite documents being forwarded prior to dispatch of the truck. Borders remain a concern and when this issue is addressed the movement of cargo will improve considerably.”

With no immediate expansion plans on the cards, Briggs says the recession has led HB Services to focus on client satisfaction for the next few months.

“We are concentrating on giving our best to the clients that we are servicing and will only consider new markets in the knowledge that our present infrastructure is capable of coping with any new challenges.”

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With Angola’s economy growing in leaps and bounds, exporters are moving in

to take advantage of the significant opportunities.

“The country however has a reputation for badly congested ports and severe berthing delays as a result,” says Globogistics and Services’ Deon Botha.

“Many exporters have become frustrated with shipping delays on the route and as a result growing numbers are opting for roadfreight.

“This translates into shorter transit times which is especially important for FMCG export orders.”

Globogistics and Services currently offers an integrated service for exporters to Angola.

“Each export order is carefully planned to ensure that all required documentation is correct and compliant,” says Botha.

“Communication with both supplier and consignee is maintained throughout the process, with updates given on the status of the cargo as they move through various borders to Angola.”

One of the challenges experienced for roadfreight orders is the preparation of in-transit bonds when cargo moves through Namibia, says

Botha. “Globogistics has set processes in place to ensure that cargo does not suffer any delays on account of this.”

The Angola roadfreight service is part of Globogistics’ comprehensive service portfolio.

After maintaining a near 6% growth for the past five years, sub-Saharan Africa will likely suffer to a far greater extent from the effects of the global financial crisis than first expected.

This is according to credit solutions provider Coface, which believes the oil producing countries will probably

be the hardest hit by the crisis.Forecasts for 2009 have been

accordingly reduced below 2% compared to the 5% forecast last October, and while growth is expected to rebound to 4% in 2010, it will remain below its pre-crisis level.

According to Coface, the oil producing countries are likely to suffer

a precipitous 5.5-point drop in growth, down from 6.9% in 2008 to a still-positive 1.4 % this year.

“Most oil countries will be unable to offset the decline in prices by increasing production. Angola is likely to experience an economic contraction of about 3.5%, after maintaining near 20% annual growth

over the past five years,” says Coface.While a large majority of

continental countries have benefited from the fall of oil and foodstuff prices, all have suffered from the decline in their exports in both volume and value terms and from the decline in financing flows, particularly foreign direct investment and private transfers.

Finding a lucrative niche in Angolan roadfreight

The Globogistics team … back from left: Dalmé Steyl, Deon Botha, Jessie Hurst, Janice Pietersen; middle row: Tania Roos, Lee-Ann Guthrie; front: Mirandi Louw, Steyn Hoffmann and Nadia de Kock.

Oil-producing countries will be hardest hit by financial crisis

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NOVEMBER 2009 | 43

By Liesl Venter

Zambians want to do it for themselves with little or no help from foreigners. That’s

the sentiment of many businessmen in the landlocked country where “Zambianisation” is not just growing in strength but has also seen immigration assistance and tax incentive offers to foreigners all but disappear.

Few are willing to speak on the record for fear of losing the little footprint they have in the country, but there is consensus among businessmen in Zambia that the success of the Zimbabwean regime in taking business and lands without repercussion has emboldened the Zambian government, and to an extent, the country’s public.

“There is little benefit to being based in Zambia at present,” says one businessman. “Companies that have done well in Zambia are foreign based, or companies that need very little footprint in order to trade, but there is a sentiment growing in the Zambian business world that Zambianisation must continue and foreign business shouldn’t be necessary to develop the country.”

While the previous Zambia Development Agency had a mandate to offer tax incentives, immigration assistance, and duty free allowance for capital equipment, this has been all but removed to the extent that the agency is now housed in the same building as the Zambianisation agency that is mandated to do the very opposite of encouraging foreign investment.

With great mineral wealth in the country, its friendly people and relative freedom from violent crime, it offers ideal investment opportunities to foreigners wanting to invest in Africa. While the infrastructure is primitive, it is available as opposed to many other African states.

Challenges are however great. “Rampant theft, from diesel to company

cars, workshop stock, building materials, cargo and even office stationery – nothing is free from theft here,” says another businessman, who also preferred to remain anonymous.

“Corruption in every single aspect of business is part and parcel of doing business here. Without a back-hander nothing can be achieved, and there is no doubt in my mind that businesses owned by white people – be they foreigners or Zambians – are targeted

by the government continuously for inspections, audits, fines and paperwork exercises, either to create a scenario where a pay-off will take place and the perceived problem will go away or with blatant racist intent.”

Another businessman, who not only was born and bred in Zambia but has owned a business there since leaving school, agrees saying this new phenomenon for Zambia is very recent but is gaining momentum.

Worrying trend of ‘Zambianisation’ sees foreigners losing ground

‘Without a back-hander nothing can be achieved, and businesses owned by white people – be they foreigners or Zambians – are targeted by the government continuously for inspections.’

FTW0017SP

Zambia offers ideal investment opportunities, but there are big challenges.

44 | NOVEMBER 2009

By Liesl Venter

Employers and employees often disregard the importance of safety training

when nothing could be more important across the supply chain.

Dries Viljoen, divisional chief executive of the Aviation Academy for Southern Africa (AAFSA), says not enough emphasis is placed on safety and security training in South Africa.

He believes that training around dangerous goods transported by air should also not just be kept to those regulated by the International Civil Aviation Organisation (Icao) and the Civil Aviation Authorities but should include the entire spectrum of the supply chain.

“Regulations by Icao and the South African Civil Aviation Authority as far as South Africa is concerned determines who should be trained and at what level, but it is preferable that more people be aware of safety and security regulations. One should never

underestimate the importance of training,” says Viljoen. “Often an awareness course will suffice as very few in the supply chain need to be trained at the highest level of expertise. Training is necessary for every individual involved in the preparation or transport of dangerous goods intended for air travel.”

This process, says Viljoen, already starts at the packaging stage, an essential component in the safe transport of dangerous goods by air.

“The packer, the shipper, the freight forwarder, the ground handler, the flight crew – everyone in the transportation chain should know what dangerous goods they are transporting, how to properly load and handle them and what to do if an incident or accident occurs.”

Viljoen says it is important that everyone knows where they fit in the process and what training is needed at their level.

“Training staff is possibly one of the best investments a company can

make – people create the wealth. An investment in the training of staff will positively impact on a business and on the bottom line eventually. One can never train too much.”

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Dries Viljoen ... ‘Everyone in the transportation chain should know what dangerous goods they are transporting.’

Trucks in Africa as fast as a horse and cartBy Ed Richardson

Poor infrastructure and red tape have slowed truck transport speeds in Africa down to the speed of horse-drawn carts.

Ineffective linkages between different transport modes (air, road, and rail), declining air connectivity, poorly equipped ports, ageing rail networks, and inadequate access to all-season roads are the key problems facing Africa’s transport system, according to a new World Bank study “Africa's Infrastructure: A Time for Transformation”.

It adds that “limited competition in the trucking industry keeps road freight tariffs unnecessarily high, while red tape along international trade corridors keeps the movement of freight below 12 kilometres an hour – as fast as a horse and a buggy – even though truck speeds can be 60 km/hour”.

NOVEMBER 2009 | 45

By Joy Orlek

Despite the global recession, airfreight volumes on the continent have held up

relatively well – and that’s largely because they’re driven by basic commodities.

“They’re goods that have to move,” says SAA Cargo regional manager: Africa, Dixon Nkomo.

Markets affected most negatively by the recession were Harare and Lusaka, said Nkomo, which are primarily driven by the perishable sector. “With most of their exports bound for Europe, where demand has diminished, production levels were down and this was reflected in our volumes.

“The same is true of Mauritius which traditionally imported raw material from Madagascar for production and re-export to the US. But because of the political instability in Madagascar the raw material wasn’t flowing and that affected our volumes enormously.”

On the positive side there’s been significant growth in Kinshasa, in

and out of Lagos, and into Harare and Maputo, primarily driven by traders buying in the East and feeding those destinations.

Airfreight manifests essentially mirror the activity on the continent, and with a lot of SA mining houses expanding into Africa and specifically West Africa, there’s been a lot of gold bullion moving between Bamako and Lagos coming into Johannesburg to be refined, says Nkomo.

“We’re also seeing big retailers expanding into Africa importing a lot of the fresh produce out of South Africa.”

Much of this is moving into Luanda and key markets where big retailers have opened up, he added.

For SAA Cargo expansion plans are very much on the radar screen.

“In the past we didn’t have widebody aircraft to serve markets like Luanda, where capacity was at a premium.

“We have now secured the right equipment and have been flying a freighter there three times a week since August.”

Hubbing is also very much a part of the airline’s future expansion plans, and the idea is to set up some sort of partnership arrangement in Dakar, Lagos or Accra to feed into West Africa. “Those are the two key focus areas in terms of our expansion strategy into Africa.”

But while the opportunities are there for the taking, it’s not a market without challenges.

And these relate mainly to the lack

of infrastructure in Africa.“We have certain aviation security

standards that we have to meet in terms of ground handling and security facilities – and in most cases these require investment.

“On top of that most African countries are net importers, which creates challenge in terms of profitable rotation in total.

“In addition not all countries on the continent have adopted an open skies policy and that means you may not always be able to operate optimally because you would like to have the ability to have fourth, fifth and sixth freedoms in all states.”

But despite the challenges, SAA Cargo is confident that the market will continue to grow.

“Building new roads is a long-term investment and we believe that development will take some time – until then airfreight will continue to be the only transport option and SAA will be ready to fulfil its Africa commitments which are likely to grow significantly once the world emerges from recession.”

SAA gears up to play its part in regional growthExpansion plans are very much on the radar screen

Dixon Nkomo … ‘The idea is to set up some sort of partnership arrangement in Dakar, Lagos or Accra to feed into West Africa.’

GR

APH

ITE

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FTW1213SD

46 | NOVEMBER 2009

By Liesl Venter

Africa is no longer the dumping ground for the world’s bad quality products.

So says Stefan Sakoschek, executive group chairman of Global Inspections Group (GIG), a South African-based inspection company providing superintendence services traditionally performed by European-based operators.

“There is a definite emphasis on the quality of imports into Africa and we are no longer the world’s dumping ground.”

With quality the order of the day, GIG has seen major expansion into Africa in recent years. Born and bred in South Africa, Sakoschek identified the opportunity of establishing an African-based inspection company.

GIG initially saw growth into Zambia, Zimbabwe and Malawi in the early 2000s. Its footprint has since expanded to include Namibia, Mozambique and more recently East

Africa after signing a major contract with the Kenyan government last year.

“We are monitoring and inspecting consumer goods leaving various countries, including South Africa, en route to Kenya. We are also doing work in Tanzania while a country like Angola has seen big import of commodities by both road and sea. We have been very involved in inspecting building materials headed for the country.”

This, says Sakoschek, is all proof of the opportunities in Africa. “And it is all about quality. Africa wants that certificate before they import and they are not just willing to take anything.”

The quality imperative was demonstrated recently when contaminated milk powder was imported from the Far East, leading to the death of several African children.

“Quality is very important and not just on the food product side. When it comes to minerals we are doing a lot of sample and analysis work, ensuring

that what is leaving the continent is of the highest quality.”

So much so that at the request of its international client base GIG

launched a minerals division on October 1 this year specifically to sample and analyse minerals before issuing certificates of quality.

Africagets more quality-consciousInspection company sets up dedicated minerals division

Stefan Sakoschek … ‘Africa wants that certificate before they import and they are not just willing to take anything.’

FTW1583SD

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NOVEMBER 2009 | 47

By Liesl Venter

Training in Africa is severely hampered by the lack of telecommunications. Megan

Harris, marketing consultant for the Institute of Chartered Shipbrokers, says many enquiries are received from especially West and East Africa and usually from individuals and not companies.

“Telecommunications poses a huge challenge as we find that not all potential students have email or internet access, and this restricts our ability to communicate with them.”

Combined with the bureaucracy and time delays, training on the continent can be extremely challenging.

But, says Harris, the eagerness to learn and secure careers in the industry poses a great opportunity to the ICS.

“Africa is a region of great potential growth for us, and we certainly hope to be able to tap into this through dedicated and targeted

marketing efforts.”One such effort was recently

launched when a new West Africa branch was opened. Headed up by Gary Miller from Lome in Togo, the Institute hopes to attract new students.

“Business has been stable over the past few years despite the global recession,” says Harris. “We have forecast a 10% increase in sales during our financial year which ends in May 2010, and are confident this will come to fruition with the dedicated marketing efforts we are undertaking.”

As the only internationally recognised professional body representing shipbrokers, ship managers and agents in the world, the ICS has 24 branches in key shipping areas.

Harris says while many companies put training budgets on hold due to the financial crisis, they also found that many were using the recession to train and retain staff.

Telecoms challenges hamper training providers… but it’s a region of huge potential

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48 | NOVEMBER 2009

By Liesl Venter

Transport and infrastructure are probably Africa’s biggest challenges, says Dave Rennie,

executive director of Grindrod Limited and CEO of Grindrod Freight Services.

“That is the reason why we have positioned ourselves in the infrastructure and development space with the specific intent to help improve and create infrastructure along the trade corridors throughout Africa.”

With several projects under way, Rennie says it is important that the private sector participates with governments to overcome challenges and rejuvenate transport and harmonise logistics systems across the region.

“In order to maximise trade and market potential in Africa, we need to work towards creating seamless trade. For instance 24-hour integrated customs at border posts and standardised regulations are two aspects that are very important.”

Rennie says issues such as prohibitive legislation and regulations, skills shortages and constraints due to legacy issues in certain countries as well as language barriers are all challenges when doing business on the continent. “These challenges can all be overcome by developing trust, enhancing communication channels with the authorities, understanding and being sensitive to all the local issues, having a presence on the ground and by working with the local businesses and governments.”

He says because Africa is rich in commodities, much interest is being shown by the developed world as well as by developing countries such as China, India and the Gulf States.

“They all want to see an increase in trade and it is an opportunity for companies like Grindrod to be involved in Africa.”

Rennie says while volumes were affected by the recession and the fall in demand for commodities, trade is expected to resume its growth in line with commodity demand.

Working with governmentsto address infrastructure challengesTrade growth will resume in line with commodity demand

Dave Rennie … ‘Positioning ourselves in the infrastructure and development space.’

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North-South Corridor gets $1.2bn upgradeBy Liesl Venter

Africans can look forward to some major improvements to the region’s North-South Corridor following the ending of the Regional Trade Facilitation Programme (RTFP) in October.

Established six years ago as part of an initiative by the World Trade Organisation’s Regional Aid for Trade, the RTFP was directly mandated to improve the efficiency of the North-South Corridor, which runs from Durban to the Zambian copperbelt, DRC, Malawi and the port of Dar es Salaam.

“An excess of $1.2 billion has been pledged by international donors to the RTFP to improve the corridor. Many programmes have been launched and it certainly has established a secure foothold from which to move forward,” says Barney Curtis, executive director of the Federations of East and Southern African Road Transport Associations (Fesarta).

NOVEMBER 2009 | 49

By Joy Orlek

Dealing with the continent offers a plethora of opportunities, but it’s far from plain sailing –

particularly if you’re moving cargo to Luanda.

When FTW interviewed Peter Schmidt-Löffler, director of independent groupage operator CFR Freight, seafreight consolidation services to the port had been suspended indefinitely due to port congestion and difficulties with port operations and customs.

“Shipping lines offer a service into Luanda but there’s no guarantee that the container will be offloaded there – it could end up being discharged in Lobito.”

And this, according to Schmidt-Löffler, had been the state of play for the past two months.

It’s all part and parcel of the challenge facing operators into Africa. CFR Freight has developed a firm foothold on the continent, serving the likes of Mauritius, Madagascar, Mozambique, Tanzania, Kenya, Angola, Ivory Coast, Ghana, Nigeria as

well as regular services to neighbouring countries. Direct services are offered to all main ports in these countries.

Some 20% of the company’s business is transhipment cargo sourced globally and channelled through CFR by its agents in the World Wide Alliance.

“South Africa has achieved growing recognition as the hub for the rest of the continent and our growing transhipment volumes are evidence of this.”

Of particular benefit is the company’s freight collect service into Africa, said Schmidt-Löffler, “where, through our network of agents, we can collect charges on behalf of the client.”

And while a large majority of CFR’s consolidation cargo moves by sea and road, the company’s airfreight division is making significant inroads.

“Through our efficient network and connections with the airlines we’re able to offer a competitive package.” And it’s this agency network that is more crucial than ever in Africa. “We have air and sea agents in all the major ports and hubs so that when problems arise they can be dealt with timeously.”

Freight collect service a big benefit for Africa consolidationsLuanda congestion plagues shippers

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50 | NOVEMBER 2009

By Liesl Venter

Adequate insurance cover should top the agenda when contracts are being negotiated for the

movement of cargo anywhere in Africa, according to South African-based short-term insurance intermediary, Prestmarine International.

Insurance and its cost should be one of the first considerations when drawing up a contract, says Susan Bester, marine marketing manager for Prestmarine International, and the importance of good cover for operations on the African continent should never be underestimated.

“Often the subject of insurance only comes up when a contract has already been signed – it should in fact have been a consideration from the very beginning,” says Bester. “Africa poses very specific risk and that is reflected in the rates that are more expensive than Europe – an accident for example on a remote African road will be costly as the

salvaging of cargo is near impossible, communications are limited and repair facilities are minimal.”

While Africa poses much opportunity for transporters and insurers alike, it is important to consider the continent’s

limitations, says Bester. “Administration does not always run as smoothly and due to communication problems one cannot always get hold of the right people, making it more difficult to sort out problems. All these are aspects that

affect the rates.”But, says Bester, Africa remains

a market that continues to grow. “While the recession did see a drop in volume, we remain optimistic about the opportunities the continent presents. Business is always growing whether it is power installations, communication development, hotels or the movement of pharmaceutical goods. While the mining industry has been very quiet following the global economic meltdown, it will pick up again providing much opportunity of its own.”

Bester says border posts continue to pose a risk due to the delays and the administration problems as well as the lack of facilities to repack cargo properly after inspecting it, but it is a continent where improvements are taking place all the time.

“Africa is definitely not business we are shying away from, but rather growing because despite carrying a possibly higher risk, it is a continent offering never-ending opportunities.”

‘Don’t underestimateimportance of good insurance cover’Risks are high, but opportunities are there for the taking

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Susan Bester ... ‘Insurance and its cost should be one of the first considerations when drawing up a contract.’

NOVEMBER 2009 | 51

By Liesl Venter

Africa needs to address its reputation of being “brown envelope” driven. Bribery is a

reality that needs to be managed and incidents must be reported to relevant authorities.

Encouraging the handing over of “brown envelopes” is not a solution, says Steyn McDowall, strategic account manager for Aon South Africa. “We suggest that everyone takes a zero tolerance approach to corruption wherever it is encountered when travelling in Africa. Companies entering into the African arena need to be practical in the way they deal with the locals.”

Aon Corporation is one of the leading global providers of risk management services, insurance and reinsurance brokerage, and human capital consulting worldwide.

McDowall says doing business in Africa poses both challenges and opportunities.

“Africa is an emerging market and there are many business opportunities, especially in the mining, engineering, power and telecoms sectors. We are seeing many Australian and British companies investing in mining and power projects in Africa. Aon has had the opportunity to meet with these companies, to consult and provide insurance solutions for some of these projects.”

McDowall says Africa will however need to address issues such as communication systems and safety aspects to see more investment.

“Some countries are dangerous and it is difficult to get to places safely. Infrastructure is poor so the number of road accidents, for example, is high. It is also challenging to get people out of these countries should there be an emergency situation.”

With Africa like the rest of the world having seen a downturn, recovery is here and investment in Africa continues.

“From an insurance perspective,

legislation issues also pose challenges when doing business in Africa. East Africa is governed by Anglo-type law and West Africa uses the Napoleonic code. Both come with their own set of legislative challenges. Insurance regulations in less mature markets, as can be found in many African countries, also pose challenges to insurers. However, having said that it needs to be stated that these markets are maturing in terms of their understanding of insurance regulations,” McDowall told FTW.

He says the introduction of Aon’s Crisis Management Operations Centre (AcMoc) has encouraged a trend where Aon looks for synergies with the client and will cover aspects such as personal

accident policies, travel policies, medical policies and so on. A crisis can occur in an instant.

Knowing what to do and having reliable support is key and is the basis on which the AcMoc was founded.

“With more and more South African and international companies operating or investing in African countries with hostile or politically unstable environments, there is a growing need for this type of executive and employee cover. Organisations are realising more and more the responsibility of duty of care regarding the safety of their personnel and assets and are investigating ways in which to protect their employees in the event of an emergency,” he said.

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Encouraging the handing over of “brown envelopes” is not a solution.

52 | NOVEMBER 2009

By Liesl Venter

Don’t underestimate the potential of Zimbabwe. It’s Africa’s sleeping giant and is slowly

starting to awaken, says Warren Jayes, managing director of Leo Shipping Services.

And Jayes believes that as the country opens up, much opportunity comes with it.

“Cargo volumes are steady at the moment, but we expect this will pick up

as Zimbabwe starts to awaken. In the meantime Zambia and the Democratic Republic of the Congo seem to be slightly quieter at present, mostly due to the mining procurement that has slowed down.”

According to Jayes, customs delays remain a constant problem. “At the Beitbridge border post customs clearances are slow on both sides of the border. The increased demand for SADC certificates by Zimbabwe importers seems to have increased the

volume of work for the South African customs officials, and all indications are they are struggling to cope.”

He says this is something that must be addressed. “With the increase in workload, we are seeing lengthy delays on the export of cargo. Furthermore the queues at the ramp for supervision on stopped entries and bonded cargo on the South African side have also increased and customs does not seem to have the manpower on site to cope with the volume.”

As it increases its fleet of eight ton trucks to accommodate smaller consolidation cargo to Zimbabwe, the issues at customs are critical, says Jayes.

“Zimbabwe has shown signs of improvement this year and it is an important market for us,” says Jayes. “Landlocked countries like Zimbabwe will always be reliant on South Africa for logistical reasons, but an effective and efficient service is critical to remain ahead of the competition.”

By Liesl Venter

A recession can create just as much opportunity as it can challenges, says CronTrans group CEO Henu Cronje.

With innovation and effectiveness at play, along with a positive attitude, he says, companies such as CronTrans and others do not have to be wiped off the map just because of a global

downturn.Having been involved in transport

and logistics for the past 19 years, the company offers a diverse range of services from transportation and materials handling to logistics management.

“With the recession northbound volumes dropped dramatically from February until recently,” says Cronje.

“But it does seem to be slowly picking up. One of my biggest concerns has however been the effect on rates. We have continuously had to revise rates just to keep business as competitors were dropping rates as a way of staying busy. The pressure on the mining industry to cut costs also played a role. At this stage I don’t know when, if ever, the rates will be

back to ‘normal’.”Cronje says while volumes and

profit have been low during February to May this year, there has been a stabilisation during June and the figures are slowly climbing.

“During the past few months we have actually acquired various new customers and expanded our current customer base.”

Zimbabweshowing strong signs of recoveryBorder delays continue to irk transporters

‘Rates have been one of the biggest casualties’

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Johannesburg 011 912 8000 Petra Fordyce - petra.fordyce@amua.co.za Port Elizabeth 041 373 2315 Chris Pyke - chris.pyke@amua.co.za www.santam.co.za

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NOVEMBER 2009 | 53

By Alan Peat

Having the correct documentation is a critical factor in cross-

border freight traffic movement, according to Nachi Mendelow, the marketing representative of Compu-Clearing Outsourcing.

And Compu-Clearing, he told FTW, has multiple solutions for cargo travelling through Africa.

“Firstly,” he said, “we have a special system designed specifically for cross border transport to the BLNS countries (Botswana, Lesotho, Namibia, Swaziland). This system allows for quick and easy capturing of data, and produces all the customs documentation necessary – from the bill of entry (BoE) to the road manifest.

“Compu-Clearing is also linked to the SA Revenue Service (Sars) by electronic data interchange (EDI), allowing for documents to

be processed and cleared before the truck even arrives at the border. This obviously increases efficiency dramatically and helps to reduce delays at the border.”

The freight system specialist has also now integrated the system into Asycuda in Botswana – allowing a single capture of data to produce the documentation for both sides of the border.

“We are currently working on integrating with Lesotho, Namibia and Swaziland,” Mendelow added.

Compu-Clearing has just released to the market a new web-based product – the international air waybill (AWB) production system.

“This allows users to produce both master and house air waybills from anywhere in the world on neutral, pre-printed and plain paper,” Mendelow told FTW.

“It also allows them to produce consolidation manifests, reserve air waybills for future use, and to print bar-code labels.”

Added to that, and built into the system, is the ability to save, print, view and e-mail AWBs in PDF format.

“The system lets users easily maintain multiple selling rates based on specific shippers, consignees, airlines and routes,” said Mendelow. “Live status enquiries can be done with a single click. The system also includes dynamic live databases providing accurate information on currency, country, city and airport codes, and including information on all major airlines.”

Compu-Clearing’s third-party warehousing solution, Stash, is also designed to suit the African market – and is already being used in Uganda, Congo, Nigeria, Rwanda, Ghana and Benin.

“This,” said Mendelow, “is a complete PC-based warehousing solution, using the latest in Windows-based technology and software. It allows users to manage

and control all cargo moving through their warehouses and allows for easy production of goods received notes, goods delivered notes, stock control sheets, and multiple operational reports.

“Stash is extremely scalable and can be used in companies ranging from a single user, up to 20 plus users.”

A range of electronic options speed documents for cross-border trafficCurrently working on integrating with Lesotho, Namibia and Swaziland

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Nachi Mendelow ... multiple solutions for cargo moving through Africa.

54 | NOVEMBER 2009

By Liesl Venter

Self-regulation of the transporting industry in east and southern Africa is a

critical imperative if the industry is to move forward and avoid further unnecessary cost increases, Barney Curtis, executive director of the Federations of East and Southern Africa Road Transport Associations (Fesarta), told FTW the impact of non-tariff barriers had led to a stalemate in the regions as authorities continued to introduce restrictive and punitive legislation which in turn led to a dramatic rise in costs.

“The authorities in developing countries cannot effectively enforce the legislation and it is imperative that the industry workes with authorities to benefit the region.

“Self-regulation is vital for this industry and must not be seen as just another form of enforcement. Non-tariff barriers are creating havoc and we believe that self-regulation is one of the solutions

to their removal.”One example Curtis cited was

the 38 weighbridges and check points on the 1000km stretch of road between Dar Es Salaam and Tunduma which carries about 200

trucks per day.“At Beitbridge border post we

are seeing more inspections being carried out than necessary – and all of this is leading to transporters being delayed more and more. As a result trade facilitation suffers and costs continue to increase.”

Curtis says that the Road Transport Management System (RTMS), a private sector initiative for self-regulation is to be piloted along the Trans Kalahari Corridor between Walvis Bay and Gauteng.

“The Trans Kalahari Corridor

Management Committee agreed to pilot the system on their corridor and meetings have been held to agree on a way forward,” said Curtis. “The three Customs authorities involved have expressed their interest in the RTMS and are working out how to incorporate it into the South African accreditation system.”

Curtis said the system would be marketed to role-players across southern Africa to get as much buy-in as possible. “This is not just more enforcement by other authorities. It needs the buy-in of the entire industry.”

It is vital that it is not seen as another “big stick” by authorities. If it is, the industry will not co-operate.

“Individual attempts such as that of the Tanzania Truck Owners’ Association which gives its reputable members stickers are worthwhile, but the system can be abused. We believe that self-regulation through the RTMS is a way of ensuring compliance by the industry across the region.”

vital to avoid cost increasesSelf-regulation

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Cape TownRobert ChildMarine Manager Phone: +27 21 417 4404E-mail robert_child@aon.co.za

JohannesburgCheryl BeurelDivisional Director Phone: +27 11 944 7214E-mail cheryl_beur@aon.co.za

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‘At Beitbridge border post we are seeing more inspections being carried out than necessary – and all of this is leading to transporters being delayed more and more.’

Barney Curtis ... ‘Non-tariff barriers are creating havoc.’

NOVEMBER 2009 | 55

By James Hall

Air freighting necessary inputs into Angola’s airport is only half the task of getting items from supplier to user.

For Air France-KLM Cargo, meeting the needs of oil and gas industry customers has led the two airlines to provide a multi-dimensional solution – a logistics service that includes road or sea feeder

“Besides our direct flights to Luanda – and on top of the cargo service originating from our global hub in Paris – the Air France-KLM Cargo division has developed special services designed for the oil and gas industry,” said Rutger-Jan Pegels, director oil & gas at the airline’s headquarters in Holland.

A truck feeder service brings goods from company planes landing in Pointe-Noire, Congo to Cabinda, Angola, while a seafreight service originating from Pointe-Noire transports cargo to Luanda and Soyo directly into the offshore base.

“We develop services for many industries,” said Pegels, while

noting the air transport giant focuses on such market segments as aerospace, high-tech, automotive, pharmaceutical, fashion and the oil & gas industry.

“Each segment has its own dynamics and logistics challenges. That is why we have developed industry-specific approaches to meet the typical logistical characteristics of the industry, and address special needs and priorities,” he said.

For Angola’s oil and gas industry, that means crafting logistics solutions that begin with airfreight but may conclude with a sea or land delivery.

“And the reverse for the returns,” he told FTW.

Intermodal option combines air, sea and road

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Industry-specific approaches developed.

56 | NOVEMBER 2009

a. hartrodt 41Airline Cargo Resources 36Airlink Cargo International 46Afnet 32AON 54Aquarius Shipping 34Associated Marine 52Aviair Freight Logistics 51Aviator Airfreight 25Bidair Services 25Botswana Consolidators 7BP Freight 27Bridge Group 4Cape Crating 49Cargo 2 Congo 55Cargo Carriers 29Celtic Freight & Logistics 34CFR Freight 17Chalba Freight 36Chavda Freight 13, 30Chrisilda Transport 23CMA-CGM 53CMKCD 21Coface 10Compu-Clearing 20Conop Freight 38Crontrans 53

Cross Africa 27Expolanka Freight 42Express Air Services 8Express Cargo Swaziland 22Extramile Express 7Falcongate Logistics 2First Class Logistics 46Flyways Inter-Forwarders 32Freight IT 32Frits Kroon Transport 35Global Inspections South Africa 55Globogistics and Services 30Grindrod 5Grindrod Intermodal 3HB Services 18Höegh Autoliners 37Intra Speed 24Interlogix 50Imperilog Botswana 6JVC Freight Carriers 48KA GO 2 GO 42Kayhil Freight Services 44Kingfisher Freight 8Kintetsu 38LBH Mozambique 12Leo Shipping 49Logwin Simesonke 25

Lovemore Bros. 39M&B Transport 28Maersk Mozambique 13Manica Freight Services (Mozambique) 14Manline 16Maputo Port Development Company 14Matola Cargo Terminal 15Matvin Zambia Logistics 44MBS Carriers 10Metcon 18Mitchell Cotts 8Mitchell Cotts 26MSC Shipping 43MSC Logistics 45NAC 2000 Zambia 49Namibian Ports Authority OBCNomad Freight 48Panthera Azul Couriers 15Prestmarine International 36Qatar Airways Cargo 33RB Freight 31Reddy Cargo Services 50RFB Logistics 47Robertson Freight 30Sael 27

Safmarine 17SACD Freight 19Sharp Freight Swaziland 23SDV South Africa IFCShipshape Software 41Silic Logistics 40South African Airways – Cargo 9South African Inland Logistics 46Spedag 31Speedy Overborder Services 48Sturrock Shipping 11Swaziland Railway 23TCS Logistics 18The Institute of Chartered Shipbrokers 51Trans Africa Logistics 12Transit Freight Co-ordinators 47Transworld Roadfreight 51Trucktek 1Unlimited Logistics 38Unlimited Logistics 49Vikela Aluvin 52Walvis Bay Corridor Group IBCWilhelmsen Ships Service (Mozambique) 15 Zebra Shipping Botswana 42Zeeland Freight 44

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New initiativeaddresses inconsistencies in road user chargesBy Liesl Venter

The Southern African Development Community (SADC) has called on all

member states to submit road information in an effort to determine the level of road user charges.

Barney Curtis, executive director of the Federation of East and Southern African Road Transport Associations (Fesarta), says the information received from each state will be incorporated into a model to determine the road user charges for each state.

“There has been much debate around these charges as there is such diversity around the charges. South Africa for instance tolls its roads and does not have road user charges, while some countries like Zambia charge $10 per 100km as recommended by the Common Market for East and Southern Africa (Comesa). Some countries like Tanzania have increased this amount.”

Curtis says in an effort to address these inconsistencies SADC has taken the initiative to produce harmonised levels of road user charges for all member states and this will be done

on behalf of Comesa and the East African Community (EAC). The well-known and internationally recognised HDM4 model is being used for the process.

“Member states have been asked to supply information about their roads ranging from the distance of paved road to the amount of traffic they handle. This information is then used to establish what each country must charge.”

According to Curtis it has not been an easy task, as most countries have to face the harsh reality that they may have been charging more than

what they should have been. “All the countries accept the model and its use in calculating the road user charges with their specific information, but they don’t necessarily accept the outcome when it is less than what they are currently charging.”

According to Curtis the implementation of road user charges

to address critical maintenance on the roads is extremely important. “Africa’s biggest challenge lies in maintaining its road network and the accepted principle is that these charges will be used for the much needed maintenance. Donor money is being used to build roads and to upgrade infrastructure, but the continent struggles to put proper maintenance structures in place.

A regionally accepted system of road user charges will address that and give countries the money to be able to continuously upgrade their road networks.”

The process towards the objective has been long and difficult, but it is hoped that the recommended levels of charges will be produced and accepted by all member states within a year.

‘Hopefully recommended levels of charges will be produced and accepted by all member states within a year.’

‘Africa’s biggest challenge lies in maintaining its road network.’

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