“Africa is a key area of interest for our Strategy 2023” – Interview about growth plans in Ghana

Thanks to its political stability and economic strength, Ghana is viewed as a model country in West Africa. Who are Hapag-Lloyd’s customers there, and what are the most important imports and exports?

On the export side, Ghana’s cocoa trade is very important along with refrigerated products, such as bananas, mangoes, pineapples and yams. Our customers range from small independent farmers on the local level to larger international commodity traders. Inbound, we see a lot of machinery and most types of end products coming into Tema from the Far East and Northern Europe. In this case, we also see a large share of local SMEs importing goods in small quantities. This translates into a heavy workload for our Customer Service colleagues on the import side.

How is Ghana connected to Hapag-Lloyd’s global network?

We currently have two services that call at Tema. Our West Africa Express (WAX) service connects us to Antwerp and Hamburg. And we also have our Mediterranean West Africa Express (MWX) service sailing from Tangier and Algeciras. The WAX service operates with five ships in the 2,800 TEU capacity range, while the MWX service has four vessels in the 4,200 TEU capacity range. Tema is currently linked to Hapag-Lloyd’s global network via our transshipment hub in Tangier, Morocco, for eastbound cargo and in Antwerp, in Northern Europe, for westbound cargo.

Apart from South Africa, why is Ghana the only African country with its own Hapag-Lloyd office?

I prefer to call it the first country besides South Africa to have its own Hapag-Lloyd office. Africa is a key area of interest for our Strategy 2023, and we will definitely be looking at other opportunities going forward. We are counting on the logistics industry to establish Ghana as an operational hub for West Africa. Since 2006, when Hapag-Lloyd acquired CP Ships, we have been represented by third-party agents, and they have done a great job. However, by 2017, it became apparent that we needed to expand our footprint, so we opened our own office in Tema in February 2018. In mid-March of this year, we moved into a larger space. Our workforce has slightly increased due to growing volumes with our port-to-port services and carrier haulage services into the hinterland. We expect this to continue in the short term as soon as we are fully settled in.

That depends a lot on the new container terminal that is supposed to go into operation in the Port of Tema in late June. How much of a boost will it give to Hapag-Lloyd’s business?

This will definitely be a significant game changer for West Africa as a whole. We now see enormous potential for Hapag-Lloyd to be able to finally increase capacity and open new areas in this region. We have been working on growing in Africa for some time now, and the new terminal will now allow us to do that. To date, we have only been able to handle 4,000-5,000 TEU vessels at the old terminal. But, in the next few years, we expect to see 14,000 TEU ships at the new terminal.

Tema has an ideal geographical location right in the middle of the most important ports of West Africa. The port range that we envisage – and the ports that could be served from Tema by feeders within a one-week round voyage – are those between Douala, Cameroon, to the east and Conakry, Guinea, to the west. Optimally, this would be one weekly feeder service sailing eastbound and another sailing westbound. This could start next year, once the new terminal starts ramping up its operations. We’re already in discussions with the managers of various terminals in West Africa about potentially dovetailing feeder sailing schedules for optimal transshipment times. What’s more, given the congestion in Tangier, we also want to serve the markets in the Middle East and India by sailing around the cape in South Africa. At the moment, we are thinking about adding a new service with nine vessels and of perhaps having one partner servicing ports in West Africa, South Africa, the Middle East and India.

To what extent are the landlocked countries in the area – such as Burkina Faso, Mali and Niger – served via Tema?

To date, Hapag-Lloyd has only serviced these countries to a limited extent. But that will change a lot with the new terminal. With its handling capacity of 1 million TEU, the Port of Tema has been at 90 percent capacity utilisation for the past one or two years. There were no opportunities for growth. As a result, much of the hinterland transport headed to Burkina Faso has gone through Abidjan in Ivory Coast, and much of the traffic headed to Mali has gone through Dakar in Senegal. This year, the Tema office will be focusing on the landlocked countries. We’ve added a new position in the Ghana office that is dedicated to expanding and growing the hinterland business. We want a local approach with a standardised service offer.

Is there any niche business for Hapag-Lloyd in Ghana?

One of the niche businesses we’re focusing on is the banana trade, which is steadily growing in Ghana. We can offer our customers detailed expertise thanks to the considerable experience we have already gained in this field in other ports in Africa.

What are the goals of our Sales team in Ghana?

A big share of exports from Ghana are controlled from outside the country on a free-on-board (FOB) basis. FOB is a so-called “Incoterm”, the three-letter international commercial terms developed by the International Chamber of Commerce for customary contractual terms in the international trade of goods. FOB stipulates that responsibility for the goods passes from the seller to the buyer as soon as the freight arrives on board. Our Sales team is therefore very much focused on the CIF (cost, insurance, freight) business, which mainly comes from SMEs. At the same time, the Sales team is working closely with our overseas colleagues to ensure the best possible results with FOB.