FROM MAGAZINE: Digital reforms for smooth sailing in African waters
Ocean trade which dominates 90 percent of African imports is tasting the success of digitalisation due to pandemic. Learning from the deficiencies of
Ocean trade which dominates 90 percent of African imports is tasting the success of digitalisation due to pandemic. Learning from the deficiencies of the global trading system exposed by Covid-19 and considering that the crisis struck while Africa was preparing to launch AfCFTA, the continent should use this window of opportunity to revisit the provisions of the AfCFTA agreement and craft additional rules to guarantee the freest possible flow of trade in times of difficulty.
July 1st 2020 is a much-awaited day for the continent which is now displaying a grim future in the face of the pandemic. African Union's African Continental Free Trade Area (AfCFTA) to be launched on the said date has been a subject of deliberation presently among trade experts and business leaders despite Covid-19. The leaders have signed an open letter stressing that AfCFTA must remain on course as earlier envisaged and should not be postponed to January 1, 2021.
AfCFTA has the potential to create the largest free-trade area in the world - uniting 55 African countries with a combined gross domestic product of more than $2.5 trillion. The trade agreement is expected to expand intra-African trade by up to $35 billion per year, ease movement of goods, services and people across the continent's borders and cut imports by $10 billion, while boosting agriculture and industrial exports by 7 percent and 5 percent, respectively.
As far as Africa is concerned, ocean trade dominates 90 percent of imports. African port & terminal operators have been gearing up the infrastructure to meet the burgeoning demand while digitalisation is also tasting the success in the traditional shipping industry.
In January, A.P. Moller Capital announced a sizable investment in a ports and logistics platform - an ecosystem of ports, trucking, warehouses and rail services in West Africa. AP Moller holds 43 percent stake in the platform, while Olam and Africa Finance Corporation (AFC) hold 31 percent and 26 percent, respectively. The platform is managed by the UK-based ARISE Ports & Logistics.
myDHLi, an innovative one-stop customer portal by DHL Global Forwarding.
Initially, the focus will be on investing in and expanding the ecosystem in connection with an existing mineral and a general cargo port in Gabon as well as developing new infrastructure ecosystems in Mauritania, starting with a new multi-cargo port in Nouakchott, and a new modern bulk port in San Pedro, Ivory Coast.
But the world is not behaving the way as it used to be at the beginning of the year due to Covid-19. As data became the new oil in the face of a pandemic, the African shipping industry is getting greased with digital platforms for efficiency during these difficult times. This is even truer during unpredictable and challenging times such as those we are currently facing, and which might now act as an accelerator for digitising the industry.
Malini Dutt, India Representation, Antwerp Port Authority noted, "All port employees were encouraged to work from home and use digital tools to communicate with each other. Documents are to be exchanged digitally wherever possible and ship crews and personnel on the quay mainly communicate at a distance (by radio or telephone). Furthermore, we are teaming up with the tech company Rombit to prevent corona infection on the work floor. Rombit has developed the Romware Covid Radius, a digital bracelet that ensures social distancing and we will be the first in the world to test this with a team of operatives."
Out of the 238 million tonnes of total freight volume handled by Port of Antwerp in 2019, 27.5 million tonnes was contributed by the African continent.
To support the African maritime industry, DHL Global Forwarding will be launching myDHLi, a fully integrated online platform for freight forwarding customers in Africa. Commenting on AfCFTA giving a push to the platform and on myDHLi's launch in Africa, Tim Scharwath, CEO, DHL Global Forwarding, Freight during the press briefing via webcast spoke to Logistics Update Africa that AfCFTA will certainly boost the customer base for myDHLi. The launch date of the platform is yet to be announced.
The one-stop customer portal is tailored to the needs of customers. By combining services like transparent management of freight rates, offers, transport modes, carbon emissions, online quotation, booking with shipment tracking, document accessibility, and data analyses, myDHLi is not only creating 360 degrees visibility but also will lay the foundation for customers to manage their logistics - anytime and anywhere. The move reflects Deutsche Post DHL Group's Strategy 2025: %u2018Delivering Excellence in a Digital World'.
Similarly, Bollore Transport & Logistics, Next4 and IMT Mines Albi engineering school signed a memorandum of understanding (MoU) to develop new traceability functions for goods flows based on the study of data gathered by the internet of things (IoT) sensors. All the three partners committed to unlocking synergies between their various fields of activity to improve the agility and resilience of the supply chain relative to the transport of containerised goods.
Ensuring business continuity for the maritime logistics, Kale Logistics Solutions is facilitating specially curated Electronic-Delivery Order (e-DO) solutions. It can issue master and house delivery orders for multiple shipping lines. Also, it can facilitate re-validation of soon to expire delivery order by auto-calculating the charges to be paid.
Emphasising on the e-DO service initiative, Vineet Malhotra, director of Kale Logistics Solutions said, "As Africa went into lockdown, we collaborated with various associations to make them understand the value of e-DO during such crisis. The platform was there earlier but now we have added several features by offering more payment options like credit & debit cards and several payment gateways, Whatsapp integration, multiple options to generate online invoices, and revalidation of the delivery order online. There is a repository of documents you can refer to any time. Right now, pilots are going in four African countries. We are working to find out the actual impact of pre- and post-Covid-19 scenario, what is the saving or on compliance that we can do better."
Digital Freight Alliance, an online association that brings freight forwarders globally onto one platform was launched by DP World in April. The connected ecosystem enables freight forwarders and any businesses in sea, air or land to book shipments of cargo from and to anywhere in the world. The move follows DP World's acquisition of SeaRates.com, a digital platform that enables customers to transport cargo worldwide, along with LandRates.com and AirRates.com. DP World has accelerated the roll-out of the platforms to help companies meet the challenge of the current crisis and keep trade flowing including vital food and medical supplies.
Located on Africa's South Eastern coast, DP World Maputo in Mozambique is a gateway to Southern Africa's vast economic hinterland. The port links regional production, mining and commercial hubs to the markets of South East Asia and serves as the main shipping terminal for land-locked regions such as Gauteng Province, Swaziland, Botswana, Zimbabwe and Malawi.
In April, DP World's Sokhna Terminal in Egypt operated its port at maximum capacity to meet import requirements during coronavirus. It has a capacity of approximately one million TEUs annually with an upcoming capacity of 750,000 TEUs with the opening of Basin 2 in June 2020.
DP World in February has finalised agreements on the construction of a new port and economic zone in Dakar, Senegal, which will develop the capital into a major logistics hub and gateway to the west and north-west Africa. DP World has designed a master plan for the development of the Port de Futur which will see it develop into a multi-purpose port including economic and logistics zones adjacent to the new Blaise Diagne International Airport. The company will develop the initial phase of the port by constructing a modern north-west container terminal capable of handling the largest container vessels.
Apart from investments in the construction of terminals and ports, equipment financing is also gaining momentum in Africa. This year, Conakry Terminal, a subsidiary of Bollore Ports, took delivery of four rubber-tyred gantries (RTG) worth %u20AC6.8 million. The new investment enables the Guinean supply chain to increase the productivity of the terminal and boosting trade. Each gantry has a lifting capacity of 40 tonnes, can improve container storage capacity, increase the pace of deliveries and reduce handling times for goods at the terminal. Despite the pandemic, the terminal is pursuing its programme of investments and continues to modernise its port activities at the Autonomous Port of Conakry.
As part of Transnet Port Terminals' (TPT) R2 billion infrastructure investment programme, Saldanha multi-purpose terminal received two new mobile ship loaders. The ship loaders will change the existing operational model and significantly boost the terminal's handling capability, specifically for bulk commodities, which comprise more than 80 percent of its total volumes. While Transnet's Cape Town Container Terminal acquired four new-generation straddle carriers at R71 million as part of their wind recovery strategy to mitigate the impact of the strong winds.
Operating across 16 sea terminals and 3 inland terminals in South Africa, TPT's operations target automotive, containers, bulk and breakbulk sectors.
Having sealed the partnership with the Port of Antwerp, the Nigerian Ports Authority (NPA) kicked off 2020 with a new set of plans in a bid to boost the potential of its six seaports and bolster its role as a leading maritime centre in West Africa. Despite having 8,000 kilometres of navigable inland and coastal channels handling between 40 to 60 percent of cargo movements in the North and Central African sub-region, the port activity in the country remains limited due to ageing infrastructure, capacity issues and scarce technological advancements. The collaboration will support NPA on the development of the Port of Lagos, which it considers as crucial in handling cargo shipments to and from Europe. Also, hubs' operations will be completely digitised to provide operators and stakeholders with electronic data to be transported at the port of loading. Set for completion this year, Lekki Deep Sea Port will be built in 90-hectare area near Lagos, which will handle up to 1.5 million twenty-foot equivalent units of containers per year.
With regards to the impact of coronavirus, Dutt stated, "In Q1, there was no corona-effect visible in our African volumes. For May, we did receive an update that Hapag-Lloyd is to reduce the sailing frequency of the Dakar Express (DEX) service, covering North Europe/West Africa trade, from the present weekly level to fortnightly from the beginning of June, until further notice."
Meanwhile, the South African government is planning to establish a national shipping carrier as a means of building strategic national shipping capacity and capability to transform the transportation sector, particularly in the maritime industry. The country has been without a national carrier since Maersk acquired South African shipping line Safmarine in 1999.
Assuming that the pandemic will increase and also preparing for the disruptions impacting the operation of the ports and trade, it is expected that Covid-19 will be the defining threat trend of the year. During this period of instability, it is key that the maritime community rely on reliable solutions, which will facilitate economic activity within this new reality.
AfCFTA is welcomed as one of the most exciting developments with the potential to connect African countries from the Atlantic to the Indian Ocean, and from Cape Town to Cairo. Learning from the deficiencies of the global trading system exposed by Covid-19, and considering that the crisis struck while Africa was preparing to launch the operational phase of the AfCFTA, the continent should use this window of opportunity to revisit the provisions of the AfCFTA Agreement and craft additional rules to guarantee the freest possible flow of trade in essential products in times of difficulty. Once implemented, AfCFTA would see the creation of the world's largest free trade area since the inauguration of the World Trade Organisation in 1995.