Fuel hikes drive up cost of transport

LINER AGENTS for Mediterranean Shipping Company (MSC), Global Logistics is benefiting from the overall growth in the Zambian economy with import volumes up by 70%, according to managing director Marcel van Vlaanderen. Fuel price hikes are however affecting the cost of transport in the region, making it difficult to predict accurately real costs on import container traffic – it can take anything up to 45 days from quotation to the container being received in Zambia, says Van Vlaanderen. He estimates that since the middle of 2007 the cost of moving a container from Europe has increased by approximately 25%, with road freight rates from South Africa to Zambia having increased by 50% in South African rand over the same period. Copper export volumes have grown with new mines coming on stream – and this, along with the strength of the kwacha, is adversely affecting export volumes of nontraditional exports such as cotton and tobacco. The kwacha has appreciated from ZMK 3850 to the dollar in January 2008 to ZMK 3180, with levels as low as ZMK 2500 being predicted. “Traditionally everything was priced in dollars to hedge inflation, but with operating costs such as salaries in kwacha, and revenue in dollars, companies are starting to feel the pinch,” he said. The growth in the economy has created numerous opportunities for Global Logistics. Although it has nine offices throughout the country with more than 120 staff, it needs to grow to meet increased demand – but with the rising costs in Zambia this is proving to be fairly challenging, Van Vlaanderen said. “As a company we are committed to Zambia and have already made substantial investments in the country. We are also generally optimistic and believe that there is a window of opportunity over the next 10-15 years to take advantage of the overall growth in import and export volumes and develop even further.”