Logistics operators battle as lines go direct to shippers

Freight forwarders in landlocked

countries such as Botswana

and Zimbabwe often battle to

meet budgets, as shipping lines

negotiating with importers directly

tend to give them the same rate.

“Over the years a system has

developed for shipping lines to

work directly with some of the big

importers and the rates they are

offering directly are often identical

to those that would be offered

by logistics companies – even

those with a global presence,” one

logistics expert told FTW. “Global

companies have global agreements

with the lines, and regional offices

in African countries should benefit

from these, but it becomes very

difficult when the lines are giving

the same rate to the importers

directly.”

This does not even begin to

address the situation of the small

local forwarders who are all trying

to make a living.

With overall volumes down, it

has been a cut-throat year with

everyone trying to get a piece of the

same pie.

“It’s a very difficult operating

environment at present and

growing volumes is not easy,” said a

source. “More and more importers

want to deal directly with the

shipping lines.”

Another concern has been the

growing number of transporters.

With no official bodies regulating

the industry anyone can buy a truck

and become a transporter.

“More often than not they have

no idea what the operating costs of

the business are and they undercut

prices. These transporters seem to

come and go, but the challenge that

remains for the legitimate logistics

and transport companies is that

through the undercutting they have

benchmarked a rate that is neither

reasonable nor feasible,” explained a

Botswana operator. “The challenge

then comes in trying to convince

clients that these rates are not

doable.”

Most freight experts say that

there’s a need for more education in

southern African countries. “There

are so many of these out-of-theordinary

practices that are accepted

as the norm – all ultimately driving

up the cost of logistics.”