Africa, traditionally a testing continent for business, has witnessed significant changes in recent years, creating new opportunities for global logistics companies. While there were hurdles, such as different restrictions and ‘red tape’ that companies had to overcome, this has eased over the past ten years and new markets have opened.
Global logistics companies have entered into Africa, either through their own direct investment or acquiring strong partners within the continent. Numerous international carriers have found value in expanding their networks, a major factor in the growth of African aviation.
“We have seen the birth of new African carriers and the huge growth of others,” Bryn Woolley, Managing Director of AirCross, part of HAE Group, said. “All this bodes well for the future of Africa as a continent. The international investment in Africa has changed the way we do business, new technology and the digitalisation of our business is having a very positive impact in the future of doing business in Africa.”
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Regional rebound
While still not at the pre-Covid levels, volumes are gaining year-on-year, as capacity returns to normality along most trade lanes in Africa. There are still many government restrictions throughout the continent, which needs to be rectified to enable ease of business and ensure economic growth and sustainability.
There is also a huge skills shortage throughout Africa, requiring a strong training platform to help the industry to grow into the future. Many companies are combatting this through in-house training and advancement for their staff but more is needed.
“Many international companies base their regional distribution hubs in Johannesburg for the Southern African Development Community. This contributes to the very high import volumes,” Woolley explained. “Traders throughout sub-Saharan Africa will choose Johannesburg to purchase their goods due to cost or varied selection of commodities that cannot be obtained in their own countries.”
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Effective operations
Partnerships are incredibly critical when expanding into Africa. Without a local footprint, doing business in some countries will be very difficult as local knowledge of any market is a key factor in operating in that region.
“For any company looking at expansion in Africa, you will need to do your homework and visit your prospective partners,” Woolley highlighted. “There are many obstacles to overcome and international companies may not be aware of this, a good and reliable local partner is invaluable in this instance.”
With 2024 presenting an opportunity to grow but also potential challenges, this will prove particularly important for cargo handlers that are looking to get an edge in a fiercely competitive environment.
“Over capacity on some routes will drive down yields. Political stability in certain regions may play a key factor on trade lanes as well,” Woolley outlined. “In South Africa, specifically, port congestion and delays could see an increase in airfreight tonnage.”
