Logistics costs in Africa are up to four times higher than elsewhere, Mark Hassenkamp, CEO of Corvus Investments International, an advisor to Chiquita Brands International on fruit sourcing diversification strategy, said at the first Cool Logistics Conference to be held in the Southern Hemisphere.
If the African continent wants to compete on global markets and seize the opportunities offered by the agriculture sector, not just in South Africa but in transition countries such as Cameroon, Ghana, Kenya, Mozambique, Senegal, Tanzania, Uganda and Zambia, this must change.
Held in Cape Town in late April, the international event attracted more than 150 participants from 15 countries. Exporters, importers, retailers, air and ocean carriers, 3PLs, ports, cold store and land freight operators came together over three days for a frequently passionate dialogue on the continent's cold chain and perishable logistics outlook.
There seemed to be rare agreement at Cool Logistics Africa between transport, logistics and perishable professionals - including fruit exporters united under the Fruit South Africa umbrella organisation - that change is now of the essence.
As Delena Engelbrecht, CEO of GoReefers put it: "We are playing catch-up in South Africa and may have no more than seven years left before congestion and delays put the region on a back foot."
Even in South Africa, logistics costs pitched at 13.5 percent of GDP remain too high compared with the U.S. and other main trading partners, said Abrie de Swardt, managing director of Capespan Exports.
Tau Morwe, chief executive of South-Africa-based Transnet National Ports Authority, used the conference platform to outline the R300bn ($38.7bn) capital investment programme to improve South African ports and global logistical competitiveness. He also mentioned that Transnet was ready to engage more proactively with the private sector in the future in order to tackle operational constraints and to become generally more demand-driven.
Critically, Transnet, which holds and controls important landside logistical assets, was also seeking to assuage any fears that issues that brought some of South African ports to a standstill in 2010 will not be repeated this year.
While reaffirming Maersk's commitment to South Africa as the southern gateway on the African continent, David Williams, head of Maersk's Southern Africa Cluster expressed the hope that some of the "occasional shocks" to the Southern African supply chain will be avoided in the future.
Picking out the refrigerated maritime transport sector, Maersk warned that the problems of equipment shortage will not go away, especially as this market sector is expected to grow and older units have to be withdrawn. According to the world's leading refrigerated container operator, 44,000 FEUs were scrapped in 2011. This year the figure is estimated to reach over 47,000 FEUs and could reach nearly 70,000 FEUs by 2016, based on a 13-year life span.
Heralding the entry of the African consumer in the near future, and outlining potential significant trade shifts in the region, major Kenyan producer Hasit Shah, director of Sunripe and Vice Chairman of Kenya's Shippers Council, said: "We need to integrate the small holder into the cold chain."
Source: Cool Logistics Africa
Enjoy curated articles directly to your inbox.