Cape to Cairo
Assessing the logistical challenges to serving customers on time
Africa has a population of one billion potential new consumers, with this trend set to more than double by 2050. Consumer spending is expected to hit US$1.4 trillion by 2020.
Delivering goods to these customers on time and at the right cost represents a sizeable prize for any company.
However, due to differing maturity and complexity of routes across the continent, getting goods to market at the right cost requires innovation.
Companies, particularly those with perishable goods that have time-sensitive supply chains, have difficulty understanding and navigating African border-crossing issues, with respect to infrastructure and bureaucracy.
Logistics across the continent is a major issue, both in terms of distance and infrastructure. Roads, trains and ports are poorly maintained, unreliable and often disconnected.
Tax and regulatory frameworks in Africa also tend to differentiate vastly from one jurisdiction to another. This is in comparison to greater uniformity across country borders, seen in markets such as the European Union.
Companies, therefore, need to consider making better use of local suppliers. Organizations using domestic suppliers are viewed in a positive light and, through gaining an understanding of the environment, may overcome any logistical challenges the continent presents.
Increasing confidence and growth potential backed by supply chain infrastructure is highlighted by the wide and rapid expansion of major multinational logistic companies in the continent. A major lesson learnt by existing operators is the extent of the skills challenge in Africa. This is a challenge that can be managed, taking into consideration both regulatory and cultural requirements.
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