Southern Africa trade challenge

By Magreth Nunuhe

SWAKOPMUND–SOUTHERN Africa needs to strengthen and modernise its rail network in order to reduce logistical costs and increase competitiveness, according to Michelle Tinkhoff, Sales Director of the Southern African Cluster for global transportation and logistics company, Kuehne & Nagel.

This, she said, can be done through a proven Build Operate Transfer (BOT) model for investors that are interested in “long-lasting” construction.

The BOT model combines the responsibilities of design-build procurements with the operations and maintenance of a facility for a specified period by a private sector partner.

At the end of that period, the operation of the facility is transferred back to the government.

She also suggests the creation of special economic zones like ‘FTZs’ (free trade zones) in order to attract industry investments.

In addition, Tinkhoff is of the opinion that trade in SADC is not properly working because of customs regulations within the region that need to be simplified.

The rail system in Africa is not reliable and therefore not recommendable, while roads are partly in a bad state, especially in countries like Zimbabwe.

Port capacities and regulations are also limited, while there are volatile exchange rates, which hampers trade facilitation, she said.

Other challenges facing Southern Africa trade, according to Tinkhoff, is that regional ports are very expensive compared to the worldwide standard, while visibility of logistics is limited.

She says that what needs to be done is guaranteeing political stability and real collaboration between the SADC members with simplified visa and working policies for foreign investors and companies.

Further key aspects to successful trade in Southern Africa is flexibility, where clearly defined corridors to manage trade are needed and the need to adjust to market changes and shipping line changes continuously.

Competitive pricing, such as group purchasing power for shipping line rates and transport rates are also imperative, while round tripping is also key for good rates, according to Tinkhoff.

There is also a need for personalised service, that includes a dedicated team focusing on Southern African operations and a daily tracking sent to clients. Kuehne & Nagel has been operating in South Africa and Namibia since 1954 and 1978, respectively.

It has offices worldwide in more than one-hundred countries and operate from more than 1,000 offices.

The company offers logistics services like seafreight, airfreight, roadfreight, warehousing and distribution, but also niche products like aerospace, oil and gas and marine logistics.