Managing logistics in Sub Saharan Africa: not for the faint-hearted
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TIA
Transporting goods anywhere can be challenging, and in Sub-Saharan Africa, delivering goods to customers on time and at the right cost, is indeed fraught with obstacles which need to be identified and managed correctly. Although Africa’s ports have made huge progress in recent years, thanks largely to successful port management partnerships, problems persist. Cargo dwell time is a clear indicator of a port’s efficiency, and where Durban may have a dwell time of up to four days, a report by the World Bank in 2012 reflects that cargo dwell time in Africa south of the Sahara is abnormally long:
“For benchmarking purposes, if we exclude Durban, and to a lesser extent, Mombasa, average dwell times in most ports in Sub-Saharan Africa is close to 20 days (compared to three to four days in most international ports.)”
Managing logistics in Africa is not for fainthearted
These long delays adversely affect the efficacy of port operations, and of course increase congestion in container *This article was supplied by Eikos Risk Applications terminals.
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Road is slow,goods expensive, and at totimes, dangerous. ransporting anywhere continues be of concern. We need
mishandled at port, and with the inherent can be challenging and in Sublocal government to urgently upgrade of transporting freight on Sub- which Cargo transporters on the road face further challenges. Roads are inadequatelydangers maintained and are overloaded Saharan Africa, delivering goods to provincial roads throughout South Africa Saharan road and rail. makes it increasingly difficult for trucks to travel safely on them. According to the CSIR’s 9th State of Logistics Survey, customers on time and at the right cost, is as their state of disrepair continues to Companies in the logistics sector inland freight volumes have risen across the board in 2011 and 2012, and yet the condition of provincial road networks indeed fraught with obstacles which need impact negatively on the logistics sector,” face challenging demands in Southern has deteriorated Reimers, managing director if Eikos Risk to be identified markedly. and managedRemarks correctly. Hughremarks Hugh Reimers, managing AfricaApplication: and it is crucial that, with the right Although Africa’s ports have made director of Eikos Risk Applications. specialist advice, these risks are mitigated “The contribution of poor road conditions to accidents involving trucks huge progress in recent years, thanks and financed efficiently where possible. continues to be of concern. We need local government to urgently upgrade largely to successful port management Inconsistent tax frameworks, Marine insurance can be very provincial roads statesaysofEikos’ disrepair partnerships, problems persist. Cargo throughout costly delaysSouth Africa as their confusing, Reimers. Eikos to ofimpact dwell timecontinues is a clear indicator a port’s negatively on the logistics sector.” has a highly skilled marine team that efficiency, and where Durban may have a Companies operating in Sub-Saharan is available to provide advice on the dwell time of up to four days, a report by African countries experience the array intricacies of insuring international cargo Inconsistent tax frameworks and costly delays the World Bank in 2012 reflects that cargo of tax systems as an added frustration in risks. dwell timeoperating in Africa south of the Sahara is countries the supplyexperience chain. Where the a border official The company’s specialistfrustration legal team can Companies in Sub-Saharan array of tax systems as an added in the abnormally long. agreewith with the pricing with analysing and understanding supply chain. Where a border official maymay notnot agree thetransfer transfer pricing toassist be applied, the result may typically be benchmarking if we to be applied,Having the result typically be contractual exposures through double“For taxation: more purposes, administration, more delays. tomay wait any longer than necessary at a assumed border is particularly exclude Durban, and to a lesser extent, double taxation: more administration, various trade agreements. Eikos’ of cargo, detrimental for cold chain logistics providers. Yet another problem facing the freight sector is the return ofteam load Mombasa, average dwell times in most more delays. risk profilers can guide companies in the as an empty return leg is expensive and has to be factored into the cost. This costing must be prudently done to remain ports in Sub-Saharan Africa is close to Having to wait any longer than gathering of appropriate risk information competitive. 20 days (compared to three to four days necessary at a border is particularly in order to profile their risks. As insurers in most international ports.),” says the detrimental for cold chain logistics tend to apply higher premium rates when Insurance solutions for freight and owners report. providers.operators Yet another problem facingcargo there is little risk information, Eikos’ risk These long delays adversely affect the freight sector is the return of load profilers assist companies by presenting Successful companies will be those who have identified the risks in their supply chain and have taken the necessary the efficacy of port operations, and of cargo, as an empty return leg is expensive the necessary information on their risks steps to create sustainable solutions. As an independent marine insurance broker specialising in international and course cargo increaseinsurance, congestion in container and supply and has chain to be factored the Risk cost. This to insurers, so that insurers rate theirimpact domestic liabilities risks, into Eikos Applications understands the can financial terminals. costing must be prudently done to remain risks appropriately. associated with cargo being damaged or mishandled at port, and with the inherent dangers of transporting freight on competitive. Marine insurance is based on longSub-Saharan road and rail. Companies in the logistics sector face challenging demands in Southern Africa and it is Slow, expensive and dangerous roads established maritime law – it is a complex crucial that, with the right specialist advice, these solutions risks arefor mitigated efficiently where Insurance freight and financed and specialised arena. Any possible. shortfall in a Cargo transporters on the road face operators, cargo owners company’s understanding of this difficult Marine insurance can be are very confusing! Eikos has a highly skilled marine team who available to provide you with further challenges. Roads inadequately sector canisresult in its business suffering advice on the intricacies of insuring international cargo risks. Our specialist legal team assists with analysing and maintained and are overloaded which Successful companies will be those who a costly loss. Eikos’ recommendation understanding contractual exposures you identified assume the through agreements. Eikos has team of risk makes it increasingly difficult for trucks that have risks inyour their various supply trade is simple: Companies should getaEikos to travel them. to chain and haverisk taken the necessaryin steps Risk Applications on theirAs side as it profilers to safely guideonyou in According the gathering of appropriate information order to profile your risks. insurers tend to thehigher CSIR’s 9th State of rates Logistics Survey, create sustainable solutions. an profilers understands and apply premium when there is to little risk information, ourAsrisk assist youthebycomplexities presenting the necessary inland freight havetorisen across so that independent insurance challenges of maritime insurance. Eikos’ information on volumes your risks insurers, insurersmarine can rate your broker risks appropriately. the board in 2011 and 2012, and yet the specialising in international and domestic supply chain risk management specialists condition of provincial road networks has cargo insurance, liabilities and supply unparalleled expertise Marine insurance is based on long-established maritime law – it is a complex will andprovide specialised arena. Any shortfall in deteriorated markedly. chain risks, Eikos Risk Applications across the full spectrum of marine cargo your understanding of this difficult sector can result in your business suffering a costly loss. Our recommendation to “The contribution of poor road understands the financial impact insurance. you conditions is simple:toget Eikos involving Risk Applications on your side, a company who understands the complexities and challenges of accidents trucks associated with cargo being damaged or
maritime insurance. Let our supply chain risk management specialists provide you with unparalleled expertise across the full spectrum of marine cargo insurance.
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