“A massive continent” – Interview about the opportunities in the hinterland of Africa

For this interview, Tom De Wilde, who is responsible for the development of landlocked Africa at Hapag-Lloyd, talks about the opportunities, challenges and massive growth potential in this part of the world.

Tom, why does Hapag-Lloyd need to send its containers into the African inland?

Africa is a massive continent, and several countries are completely landlocked. We would leave 38% of the African market untapped if we didn’t invest in an inland strategy for Africa. The continent holds 33% of the world’s uncultivated arable land. Several main agricultural commodities – such as tea, coffee, cotton and cocoa – come from the inland countries. As such, targeting imports to Africa under carrier haulage to these specific inland locations is actually about positioning boxes strategically, which opens up new potential for exports. Moreover, these countries are growing faster year-on-year than their neighbouring port countries.

Several African countries are completely landlocked.

That sounds promising. But is it all good news, or are there specific challenges associated with inland Africa?

Indeed, the mentioned potential does not come without its challenges – and there are actually quite a few. Infrastructure is still a key issue. Terminal operators and even shipping lines are increasingly investing in Africa’s port setup. Unfortunately, the landside infrastructure is often neglected, and distances are vast. All our offered corridors, for example, exceed a distance of 1,000 kilometres, and the port and its corresponding inland location are often linked by just a single road. So, if there is issue on that one road, it immediately and severely affects logistics – and basically the supply of the destination country.

Another challenge is the fact that all corridors cross at least one border. Although there have been ongoing discussions for years, Africa still doesn’t have a continental free-trade zone. This means that most of these countries have different customs regulations. On top of all this, there is also a language barrier. Six of the nine inland countries we serve today are predominately French-speaking – next to their numerous local languages, of course.

Vital connections: Ten main corridors connect Inland Africa with the continent's major sea ports

How does Hapag-Lloyd deal with these challenges?

With these mentioned challenges in mind, Area Africa has created a dedicated Inland Africa department. Daily communication with our agents, vendors and consignees is of the utmost importance. We have created a model that minimizes the possible risks to Hapag-Lloyd. This isn’t always easy. But thanks to the team, we are able to offer a quality product in inland Africa with an almost personal follow-up.

That sounds like another great enhanced product for Hapag-Lloyd. What are the selling points to bring cargo under a through bill of lading in Africa?

First and foremost, through bill of lading offers both shipper and consignee the advantage of being required to only speak with one party: Hapag-Lloyd. We liaise with both parties and make sure that everything is taken care of so that we can take the box in transit to its final destination.

Second, in the congested African ports, both shipper and consignee don’t need to be concerned about detention or demurrage in the port, as it’s up to Hapag-Lloyd to pick up the box as soon as possible before possible charges are incurred.

Third, in most cases, the box is delivered to the door of the consignee. It stays on the truck of our vendor, who will then bring the empty back. This means that the consignee isn’t involved in returning the box and doesn’t need to worry about overstepping any free time.

Final question: What are our ambitions for Inland Africa in 2019?

Today, Inland Africa consists of nine countries. We offer 10 main cross-border corridors, which together cover the lion’s share of the carrier haulage market. The first thing we need to do is create scale on these 10 corridors. Once that is done, we can start looking at expanding into new corridors.

Parallel to the drive for import cargo, we are also working on getting exports out of Africa on carrier haulage. We are already piloting this in Uganda at this time. With its coffee and cotton exports, we are aiming for so-called “double dip” there – that is, bringing boxes in under carrier haulage and doing the same in getting them back out. This would let us target new volumes, allow us to have closer follow-up with our equipment, attract more revenue and achieve higher profits.

If we can do all that, our contributions to and from Africa will rise significantly, which will surely then result in further growth for Hapag-Lloyd on this fantastic continent.