Consolidations into Africa
are set to increase in light of
growing consumer markets
across the continent.
According to a McKinsey
report, the largest business
opportunity in Africa is its
rising consumer market.
Africa’s consumer-facing
industries are expected to grow
by $400 billion by 2020.
Taking this into account,
along with the high cost
of logistics and the lack of
infrastructure, consolidation
of cargo makes sense in the
African context.
According to Ruan van
der Westhuizen of Namgola
Logistics, which recently
launched a consolidation
service into southern Africa,
there is increasing demand for
groupage services.
“The real benefit of
consolidations is that they
reduce transport costs
significantly while providing
economies of scale. They are
a viable alternative to having
to pay for a full truck load or
dedicated smaller vehicle.”
And since many shippers
into Africa are not moving
huge amounts of cargo and are
opting instead for less stock,
consolidations become an
attractive option.
“We are seeing a very real
interest in our consolidation
service which initially focused
only on Namibia. Already
we’re looking to include Angola
and several other southern
African countries,” said Van
der Westerhuizen. “To date
our business has been focused
on providing customers with
small, dedicated vehicles
moving smaller consignments
quickly and with far less risk.
Whilst this is still a trend in
the African context, we have
however seen rising demand for
consolidations.”
Experts maintain
consolidations are an advantage
to shippers in the current
economy where inventories
are kept to a minimum and
cash flow is often a problem.
By consolidating cargo they
are able to simplify the supply
chain while still maintaining
consistent delivery of goods.
Growing demand into Africa
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