Africa has a chance to catch up on new IT trends

Globally, the logistics sector
faces mergers, acquisitions
and disruptions such as the
use of robotics and talk of the
potential expansion of Amazon
and Uber into logistics
services.
But the fact that Africa lags
a few steps behind in some
technological developments
is beneficial as it gives the
industry an opportunity to
catch up and prepare for the
evolving business landscape.
This is the view of
international captain of
industry and founder of Swift
Freight, Issa Baluch, who will
address delegates at the the
South African Association of
Freight Forwarders (Saaff)
congress at the Gallagher
Conference Centre in Midrand
on September 6-7.
Baluch, who is credited with
pioneering the thriving sea-air
combined transport freight
business in the UAE, shared
some of the highlights of his
upcoming talks on logistics
and offered insights into the
current challenges facing
the industry.
Africa’s
Yamoussoukro
Declaration,
which
Baluch
will cover
under
the topic
“The Rise,
Fall and
Resurrection
of the Open
Sky”, was
again gathering
momentum, he said.
The 1988
Declaration was
followed by the
Yamoussoukro Decision to
which 44 countries agreed in
1999 to address the negative
impact of strict regulatory
protection on air safety records
and rising airfares, which was
hampering air traffic growth.
Although the Organisation of
African Unity (OAU) endorsed
the decision and it became
binding in 2002, progress has
remained slow.
“The African air space is
a huge problem. In the last
ten years the
growth that
has taken
place has been
phenomenal,”
he said.
Baluch
added that the
collapse of the
decision had
been blamed
on a lack of
political will –
many African
states still viewed control of
their airspace from a solely
military perspective – but
it was now being revived by
Nepad (New Partnership for
Africa’s Development) and the
OAU, with several countries
signing tripartite agreements
to give it impetus.
“At this point, travelling
within Africa is amongst the
most expensive in the world
so, from an economic point
of view, if you do not
enable traders and
businessmen
to travel with
ease, then
you are
suffocating
economic
strides that
are are
supposed to
take place.”
Baluch said
that, just by
tweaking existing
civil aviation
policies, almost
immediate benefits
could be reaped for
economies.
He added that the continent
remained behind the times in
terms of how technology was
shaping the world but this was
an advantage because decisions
could be made on how to
control or catch up with trends.
“It is difficult to control the
disruption that technology
is bringing in and the most
immediate is the the use of
robots to do many things –
drones are robotic activity.”
Baluch said the continent
needed to
amend its air
policies to
accommodate
commercial
drones, which
were being
used elsewhere
in the world.
“Another
case of
disruption
is Amazon
doing its own
logistics, and in Africa we have
not seen any impact as yet
but that trend is going to cut
through Africa to shape the
industry.”
Amazon claimed it spent
around 20% of its expenditure
on logistics and it was aiming
for greater in-house logistics
capability, he said.
“The likes of Amazon
are more or less ahead of
everyone and we need to
watch what they are going to
do. Is everyone going to have
in-house capacity? Because this
will mean that the industry
will be distorted in many
different ways. Our sector has
been late in taking account of
these types of developments,”
he said.
He added that another
disruptive factor was Uber
talking about expanding into
freight services in the way that
it provides passenger services,
while mergers and acquisitions
– such as the recent DSV/UTi
deal – would continue.
However, he said it was
difficult for larger operators to
capture the global market and
be strong everywhere.
“If you boost capacity, you
will always be weak in one
area or another and catching
up is a big thing. These
acquisitions will continue
but there is a role for the
local heroes who know the
system,” he said.
INSERT & CAPTION
It is difficult to
control the disruption
that technology is
bringing in.
– Issa Baluch