Linking land-locked countries
Logistics and transport companies are increasingly looking at doing business with land-locked regions across the world, moving away from the traditional markets. However, a well-connected supply chain continues to be an issue.
According to The United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and the Small Island Developing States (UN-OHRLLS), lack of territorial access to the sea, remoteness and isolation from world markets and high transit costs continue to impose serious constraints on the overall socio-economic development of landlocked developing countries. Their sea borne trade unavoidably depends on transit through other countries. Additional border crossings and long distance from the market substantially increase the total expenses for the transport services. The distances involved in most cases of landlocked developing countries are excessive. Kazakhstan has the longest distance from the sea (3,750 km), followed by Afghanistan, Chad, Niger, Zambia and Zimbabwe with distances from the nearest seacoast in excess of 2,000 km. Transit time for goods of landlocked developing countries is extremely long because of their long distance, difficult terrain, road and railway conditions and inefficiency of transit transport. Over the next 10 years, online retail will continue to gain popularity in both developed and emerging markets and as a result, logistics companies are set to play a key role in providing vital supply chain management solutions that are able to evolve with consumers’ changing shopping habits.This is one of the key findings in the DHL Global E-Tailing 2025 study, which analyses the role which e-commerce will play in consumer’s live in the year 2025, and how it will influence consumerism, retailing and logistics.The study explores future scenarios with alternative views of what e-commerce globally could look like for consumers and businesses in the near future, depending of various economic factors. The different future projections are based on a detailed analysis of the most influential factors effecting economies – from energy and raw material prices to technological, political and social factors, to retail and consumption patterns. According to Sumesh Rahavendra, Head of Marketing for DHL Express Sub Saharan Africa, e-tailing – the sale of goods and services through the Internet – has exploded globally, especially in emerging countries and despite the various possible future scenarios, it is clear e-tailing will continue to boom. “Currently, e-commerce already makes up 8 percent of the overall trading volume in Europe. Depending on the scenario, this share could rise up to 40 percent in developed countries and up to 30 percent in today’s emerging markets,” says Rahavendra. “The factor which all scenarios have in common is that the competition in electronic retail, whether on global, national or regional level, will become more intense. We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector, both online and offline, is changing and that logistics will be a focal point of these change processes. “While e-tailing can facilitate the transaction of the changing consumer trends, the delivery of the product needs to be considered. Many retailers put significant focus to attract customers, but more effort needs to be paid to facilitating flawless delivery to customers. Even more so when deliveries begin being measured in minutes, as opposed to hours and days. This will require logistics to adapt, as well as deliver competitive advantages, such as offering same day delivery and flexible returns.” “In the future, logistics will take over the role as an enabler for online retailers even more so than today. As a logistics company, we have a good overview on companies in various industries in almost all countries of the world. In Africa, we are continually noticing the rise of e-tailing on the continent and we are increasingly becoming an advisor to these businesses and partner for success, as opposed to a just a traditional service provider,” said Rahavendra. But the big question is, how will this supply chain exist with limited air freight access to the land locked countries? The usual trend in Africa is that carriers predominantly fly wide-bodied freighter aircraft to hubs with seaside access. Those hubs are later connected with feeder services by smaller aircraft.Oil And Gas is a major focus area in Africa and there is expected growth on Intra Africa forwarding movements.The automotive and telecommunications sectors are also seeing significant investments and this has a knock-on effect on the logistics services required.Industry demands also help shape the decisions logistics companies on the services they offer. For example, in answer to the growing Life Sciences industry, DHL set up a bonded life science facility at the Johannesburg airport, which can also serve as a hub for the sub-Saharan Africa region. This includes a dedicated Life Science Team handling the operations. One cannot ignore the fact that the cargo-handling infrastructure in many countries in Africa is still a challenge. There is a need for enhanced application of security procedures in the cargo handling process.Customs regulations are not standardized and can be a complicated and time-consuming process.The country location, their economic outlooks also play a key role in air trade performance. As often is the case, countries, which have an established infrastructure, perform better than others. In Southern Africa, for example, carriers will often manage to create great air freight capabilities with a hub in Johannesburg connected to major cities in the region.When reaching out to the landlocked countries, service providers have to fight the corruption at all stages of the customs authorities. The good part is that regulations in these regions do exist but they are not being applied strictly. Taxes and penalties are too high driving up the logistics costs. Niger, officially the Republic of Niger, is a landlocked country in Western Africa, named after the Niger River. It borders Nigeria and Benin to the south, Burkina Faso and Mali to the west, Algeria and Libya to the north and Chad to the east. The poor state of the roads in the country, the distance between the capital Niamey and the other economic centers of Niger are a problem to carry out air cargo operations. In some cases service providers may need escort services by the army to reach other part of the country. The rainy season and poor infrastructure is another problem. There are inadequate facilities to handle flights at all airports in the country. Due to bad infrastructure of the airports and poor state of roads, along with insecurity in major parts of the country, it is difficult to see certain landlocked countriesdeveloping as hubs for air freight. Niger based Niger Air Cargo wants to develop its activities with its neighbours but many airfields in those countries are not reachable by cargo airplane. Regrettably, the road and rail systems are still discouraging due to poor infrastructure and other issues. Generally, cost of logistics in sub-Saharan Africa will continue to be high until an effective and efficient system is built. “This does not translate to lack of logistics opportunities in West Africa as the industry will continue to witness growth, "said Ukata Christian of African Cargo & Logistics Alliance (ACLA). ACLA Network, otherwise known as the pan-African Premier Independent Freight Forwarders Group, is the foremost freight forwarding network in Africa today. Formed out of the strong intention to build inter trade movement and facilitation across 54 countries in Africa, its activities are centered on logistics development and co-operation for members and for the overall benefit of the entire continent.