Ten of the world’s top-ranked emerging markets are in Africa, according to Agility’s 2012 Emerging Markets Logistics Index.
Damco has a significant market presence in Africa, with offices in 32 countries, more than 900 employees and 446,000 square feet of warehouse space at 11 locations from South Africa to Morocco. The company plans to open a new office in North Sudan this year.
The growth of consumer classes across the Africa is driving demand for imports. The challenge for 3PLs such as Damco is to deliver goods across multiple borders — many African nations are landlocked — on roads often in poor condition.
For 3PLs to succeed, they must understand trade rules and regulations in numerous markets. “People have to remember that we are dealing with more than 50 different nations with different laws, etc.,” said Jacob Moe, chief commercial officer for Damco in Africa.
The current environment for 3PLs operating in Africa is analogous to the situation in Asia before direct sourcing and manufacturing. The first step is to understand local market conditions in order to provide basic operating capabilities, and then build up to sophisticated end-to-end services.
Damco handles everything from containerized cargo to large turnkey project cargo, including equipment for massive oil refining projects in Niger that must move across thousands of miles.
Providing end-to-end services in Africa also requires 3PLs to have a strong presence in China, India and Europe, in light of fast-growing trade in consumer goods and commodities between the regions. The strongest industry demand for Damco logistics services in Africa is in fast-moving consumer goods, mining, aid and relief, retail, and infrastructure/project cargo.
In 2011, Kempten, Germany-based Dachser formed a joint venture with Jonen Freight, a South African logistics company with extensive operations in Johannesburg, Cape Town and Durban. Earlier this year, Jonen Freight began operating as Dachser South Africa.
Dachser, one of Europe’s largest 3PLs, has more than $5 billion in annual sales and operates 16 million square feet of warehouse space in 310 locations worldwide. “For us and many of our globally operating customers, South Africa is an attractive market and important international transport hub,” said Thomas Reuter, managing director of Dachser Air & Sea Logistics.
South Africa is less of an emerging market than a niche market, but it’s a priority for Dachser as it extends its presence throughout Africa, said Frank Guenzerodt, president and CEO of Dachser Transport of America. “South Africa is not a huge gateway into Central Africa, but it is into neighboring countries,” he said.
Dachser has a strong presence in the North African nations of Algeria, Morocco and Tunisia and is active in numerous Central African countries. Textiles, clothing and food are among its top commodities.
Contact David Biederman at email@example.com.