Transportation in Africa presents some unique challenges for any organization operating on the continent. The high cost of transportation is one of the biggest challenges for almost all industries in Africa. The cost of freight transport is estimated to be 60 to 70 percent higher than in the US and Europe. In particular, landlocked countries such as Burundi, Rwanda and Uganda are affected very negatively, as these countries depend on transit solutions in neighboring Kenya and Tanzania. For example, a report by Trademark East Africa revealed that it takes up to 71 days to import goods into Burundi from any of the other member states of the East African Community. Here are a number of issues to consider when planning your round trip transportation:
Highway network – Africa’s transportation systems vary significantly between regions and countries. For example, Chad has only 60 km of paved roads per million inhabitants, while countries such as Algeria, Tunisia, Namibia and Botswana have more than 2000 km of paved roads for a similar population. Organizations must have a good understanding of the road network, including commercial corridors.
Network layout – When considering the layout of your network in Africa, you should also consider the absence of year-round roads in certain areas. In many countries, several cities and towns are isolated during the rainy season. During a recent network design project in Tanzania, these additional issues provided some challenges for our network design software.
Lane – Rail, a relatively inexpensive means of transport, has also been neglected with very few railway extensions in most countries. However, the cost of rail transport is twice the cost in Asia and one and a half times higher than in Latin America (UNECA). However, rail is still an option in some countries and there is more investment in the rail network.
Safe road – Road traffic injuries are a major concern in Africa. In 2007, it is estimated that more than 230,000 people died on the roads of the African Region. This represents a fifth (20%) of all road deaths, yet the Region has only 2% of the world’s vehicles. Many organizations restrict night travel as the roads are considered too dangerous.
Fuel– Prices vary significantly across the continent. In some countries large volumes of fuel have been smuggled across the border. For example, in Benin it is estimated that 80% of fuel is smuggled across the border. In Nigeria, the price of fuel is 140 naira ($ 0.89) per liter, while in Benin it retails for 250 naira ($ 1.59) at the pump and 200 naira on the black market.
Third Party Logistics (3PL) – When considering outsourcing your trucking, it is important to determine where 3PL companies operate in the country. 3PLs often cover major highways well and will likely offer reasonable rates for these routes. However, these costs increase the more rugged the road, as haulers must consider truck maintenance for these rough roads.
Agents – In some cases, agents are used to search and negotiate on behalf of the company. Often times, agents are in a better position to negotiate better rates than large multinational companies.
Collaboration – Evaluate potential organizations you can collaborate with to consolidate shipments. In African markets, volume tends to be low and cash flow is limited. Therefore, more frequent deliveries are required, resulting in less than a truck load (LTL). For example, it is common practice for distributors and wholesalers in African markets to consolidate shipments (eg Fair Trade Lagos), ensure full truck load (FTL), and in the process reduce distribution costs.
Backhauling – Organizations should also review backhauling opportunities. There are real opportunities in smaller cities to negotiate favorable rates when the trucks return. Backhaul is a return trip of a vehicle from its destination to its point of origin with an unpaid load. However, the concept is still foreign to many carriers and most will try to charge you the full amount.
Transport maintenance – You should also understand the brand of vehicles that have spare parts and maintenance available in the country. During a project in South Sudan, we identified a brand of vehicles that could not be serviced in the country. The vehicles had to be driven back to Kenya for repair, as there were no spare parts available in the country. Finding qualified technicians also turned out to be a big challenge. In a country that struggled for years with civil war, there are simply not enough technicians in the country.
