Mozambique Frieght and Shipping - Special Report 2020-2021 by Business Excellence Magazine

SPECIAL REPORT 2020/2021

Mozambique Freight Transport and Shipping

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BUSINESS EXCELLENCE CONTENTS

THE TEAM RESEARCH Fernando Ruiz f.ruiz@bus-ex.com Eurides Lopes e.lopes@bus-ex.com Joseph Philips joe@bus-ex.com María Bernardita Guschmer m.bernardita@bus-ex.com Diego Rubianes d.rubianes@bus-ex.com

EDITORIAL Michael Minihan m.minihan@bus-ex.com

INTRODUCTION: Market Overview

Regional Trade Overview

Freight Transport & Shipping SWOT

Covid 19: Impact, reactions and the new normal

Sector Trends Driving Change

Blockchain

Infrastructure Projects

Business Continuity and Sustainable development

Conclusion

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Market Overview At the beginning of 2020, the African Development Bank published a positive outlook for the Mozambique economy. It projected growth of just under 6% for 2020 and 4% for 2021. Inflation had been brought under control to somewhere around 3%, poverty was falling (although still dismally high) and generally, the outlook was positive after a few years in which the country had endured devastating cyclones and the so-called ‘hidden debt crisis’.1

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n March 22, the first case of Covid 19 was reported in Mozambique and the positive outlook was put on hold, which is where it remains six months later. It’s a harsh blow for the residents of a country which has been hit with its fair share of them, but it’s not alone: few countries have managed to avoid the scourge of the global pandemic. The good news for Mozambique is that it should be a short-term impact and the longterm outlook for the country remains positive. At the centre of the story is Mozambique’s new role as a major player in the world gas industry. Its offshore gas discovery just over a decade ago means that the country is saturated in gas, to the extent that it could soon be the world’s fourth largest exporter of liquified natural gas (LNG). As the experience of other African countries such as Angola has shown, this will bring challenges - but few would argue against it being a huge opportunity for the country. The government may already have earmarked some of the forthcoming LNG revenue to pay down its national debt, which skyrocketed to nearly $15 billion in 2019 - a 30% increase in the space of just two years, and the local currency deflating by around a third. The bad news for those in charge of the national coffers is that the first gas revenues are unlikely to arrive until the second half of 2023 at the earliest. Meanwhile, structural changes are required. As always where African countries are concerned, the structural changes in Mozambique revolve around the ease of doing

MARKET OVERVIEW

“The good news for Mozambique is that it should be a short-term impact and the long-term outlook for the country remains positive.” business in the country. On the World Bank’s 2020 Doing Business Report, Mozambique ranks 138 out of 190 countries. Notably, it had implemented zero reforms in the 12 months covered by the report. For a country grappling with investor confidence issues, the reforms need to come a lot faster. Steps have already been taken to ensure that the wealth generated by the country’s gas exports is enjoyed by the country’s citizens. Foreign investors which engage with local suppliers will be given preference and minimum quotas will apply to providing local employment on all projects. This will go some of the way to mitigating the high unemployment among Mozambique’s youth population, as well as helping the country upskill.

But as this report will outline, improving the transport and logistics infrastructure of Mozambique may be the most central tenet of the national and regional development. Few countries in the world - Myanmar springs to mind as a comparable - stand to gain so much by investing in this area. For far too long, transport and logistics have held Mozambique back. Now they hold the potential to put its economy on the path to success.

https://www.afdb.org/en/countries/southern-africa/ mozambique/mozambique-economic-outlook#:~:text=GDP%20 is%20expected%20to%20grow,2020%20and%204.0%25%20 in%202021.&text=The%20country%20is%20reducing%20its,of%20GDP%20in%202020%E2%80%9321.

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Regional Trade Overview Trade stands to be one of the biggest beneficiaries of improvements in Mozambique’s transport and logistics infrastructure. Although it has been a member of the WTO since 26 August 1995, as well as being a member of the South African Development Community (SADC) and the Global System of Trade Preferences among Developing Countries (GSTP), Mozambique has largely underperformed on trade metrics. It has spent the vast majority of the past decade in trade deficit with international trading partners, although the difference has narrowed significantly since 2016 and may move into positive territory as soon as gas revenues come on line. Its 10 biggest exports are all minerals or unprocessed agricultural goods such as oil, aluminium, tobacco, fruits, sugar and confectionery products. The lack of a high-quality physical communications infrastructure between Mozambique and its neighbours tells its own story about a lack of interaction between the country and its neighbours. Its relationship with neighbouring South Africa has at times been turbulent which only compounded the lack of trade relations. Thankfully, that has changed and the hope is that shared roads, rail and other infrastructure will enhance trade between them. Intra-regional trade is badly required. Although South Africa is Mozambique’s largest trading partner, accounting for around 18% of its exports every year, all other African countries combined constitute a further 6% of Mozambique’s exports. In fact, the Netherlands, over 8,000 kilometres away

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and having no cultural links to Mozambicians, imports about three times as much as the rest of Africa. Certainly, a large part of the reason for this is economic: The Netherlands is one of the world’s richest countries, while Malawi - to use one of Mozambique’s neighbours as an example - is one of the poorest. But that doesn’t tell the whole story. The Netherlands - despite being a small physical territory with less than 20 million people - is geared for trade. Rotterdam is the

REGIONAL TRADE OVERVIEW

Aluminium bars, rods and profiles

1,040

20%

Nuclear reactors, boilers, machinery and other appliances

753

11.1%

Coke and semi?coke of coal, of lignite or of peat, whether or not agglomerated; retort carbon

957

18.4%

Aluminum and articles thereof

512

7.54%

Coal; briquettes, ovoids and similar solid fuels manufactured from coal

761

14.6%

Vehicles other than railway or tramway rolling stock

503

7.41%

Electrical energy

401

7.71%

Cereals

457

6.74%

Petroleum gases and other gaseous hydrocarbons

276

5.32%

4.15%

371

Unmanufactured tobacco; tobacco refuse

215

Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

198

3.81%

Inorganic chemicals; organic or inorganic compounds of precious metals, of rare earth metals, of radioactive elements or of isotopes

222

3.28%

Precious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi-precious stones, temporarily strung for convenience of transport

Pharmaceutical products

200

2.94%

Titanium ores and concentrates

185

3.57%

Animal or vegetable fats and oils and their cleavage products prepared edible fats; animal or vegetable waxes

159

2.34%

Cane or beet sugar and chemically pure sucrose, in solid form

176

3.4%

Plastics and articles thereof

153

2.25%

Aluminium wire

158

3.04%

5.47%

% OF TOTAL EXPORTS

21%

TOTAL (2018 US$)

EXPORT CATEGORY

1,450

% OF TOTAL IMPORTS

Mineral fuels, mineral oils and products of their distillation

TOTAL (2018 US$M)

RANK

Mozambique Top 10 exports, 20198

RANK

IMPORT CATEGORY

Mozambique Top 10 Imports, 20197

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Whether you require distribution or fulfillment, defined freight forwarding, or a complete supply chain solution, we can provide you with a customized solution tailored to your needs. Phone: +258 82/84 8350 772/868350771/+27651732818

info@africafreights.net | www.africafreights.net AFRICA FREIGHT Maputo - Mozambique, Rua de Mesquita 222, 2 andar 23

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REGIONAL TRADE OVERVIEW

world’s 11th largest port. Mozambique needs to learn from its example. There are already positive signs that this might be happening. Trade growth is currently approximately 5%, compared to a global average of 3.5%. The weighted average custom tariff for Mozambique is 4%, which, although still relatively high, is still below almost all sub-Saharan African countries. It needs to be lower. The coming gas boom provides the government with a window to lower tariffs to stimulate trade, while not losing out on tax revenue. Mozambique is not the only country which is guilty of neglecting trade with its neighbours. If anything, it’s something of a trend in the region. Zimbabwe, a landlocked country, imports more from the United Arab

“The Netherlands, over 8,000 kilometres away and having no cultural links to Mozambicians, imports about three times as much as the rest of Africa”. Emirates (UAE) than it does from Mozambique. Not only would increased trade between these neighbours benefit their people from efficiency and economic standpoints, it would also dramatically enhance the sustainability of the trade. Perhaps the biggest for Mozambique and its neighbours from a trade perspective is

increasing value-added trade. Gas exports will provide the economy with a welcome boost, but exports are already dominated by primary resources such as oil, slag, ore and wood. South Africa’s top 5 exports include valueadded goods like vehicles (12% of exports) and machinery (6% of exports). If South Africa can, why not Mozambique too?

https://www.fircroft.com/blogs/is-mozambique-the-worlds-next-great-energy-superpower-92962314572 https://www.reuters.com/article/us-mozambique-debt-creditors-factbox-idUSKCN1VU1WE 4 https://www.doingbusiness.org/content/dam/doingBusiness/pdf/db2020/DB20-FS-SSA.pdf 5 ://www.wto.org/english/thewto_e/countries_e/mozambique_e.htm 6 https://tradingeconomics.com/mozambique/balance-of-trade 7-8 https://trendeconomy.com/data/h2/Mozambique/TOTAL 9 http://www.worldshipping.org/about-the-industry/global-trade/top-50-world-container-ports 10 https://wits.worldbank.org/CountryProfile/en/MOZ#:~:text=Mozambique%20had%20a%20total%20export,the%20 Most%20Favored%20Nation%20(MFN) 11 http://www.worldstopexports.com/south-africas-top-10-exports/ 2

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Transport Industry Overview With its borders to four landlocked countries (Eswatini, Malawi, Zimbabwe and Zambia), Mozambique shares the distinction with Russia as being the country which borders more landlocked countries than any other. his means that its transport infrastructure is not just of national importance - it’s of regional importance. It’s no exaggeration to say that the prosperity of an entire region depends on Mozambique’s transport and logistics industry. Mozambique is divided into three corridors which link its ports to its inland territories and neighbours. These are: the Maputo Corridor in the south, which connects the country to South Africa and Eswatini; the Beira Corridor in the centre, which links the country to Zimbabwe, and the Nacala Corridor in the north, which connects Mozambique to Malawi and Zambia. Each corridor is served by its own port and road infrastructure of varying quality.

Construction is also about 60% complete on a new airport in the southern province of Gaza. Chongoene Airport is being fully funded by the Chinese government to the tune of $75 million and when complete, will cover approximately 9,000m2 and include a runway of 1.8km. Its arrival will also mark a significant milestone in the government’s ambitions to open up a new economic corridor - the Chongoene corridor.

Rail Transport In rail transport and logistics, significant strides have been made and more are expected in the years ahead. There are three major corridors in Mozambique’s rail network, which essentially reflect the south, north and central axes outlined above. Until recently, the emphasis of the rail network has been on the transport of goods (particularly minerals), but transport of people and services via rail is gaining momentum. Huge investments in the sector are already underway. Mozambique’s port and railway company, Portos e Caminhos-de-Ferro de

Air Transport In air transport, Mozambique’s national airline, Linhas Aéreas de Moçambique (LAM), held a monopoly on domestic air transport until 2017. As soon as the monopoly was lifted, new airlines, including FastJet began operations on internal routes. International airlines such as TAAG (Angola), TAP (Portugal), Ethiopian Airlines (Ethiopia), Turkish Airlines (Turkey) and others now all have daily schedules in and out of Maputo.

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“In the first half of 2020, a US-based rail developer, Railnet International outlined its vision of an $11 billion railway”

TRANSPORT INDUSTRY OVERVIEW

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“Recent investments in the country’s road infrastructure include a $780 million investment by South Africa’s Capital Projects to link the south of Mozambique with South Africa”

Moçambique (CFM), announced in 2018 that it had earmarked $200 million by the end of 2021. In the first half of 2020, a US-based rail developer, Railnet International outlined its vision of an $11 billion railway line linking Zambia, Zimbabwe and Mozambique to begin construction in 2021. If realized, it could be a game changer.

Road Transport All of these developments will undoubtedly have a positive impact, but it is of the utmost importance that they’re complemented by improvements in Mozambique’s road network. Low road coverage will continue to hinder Mozambique if not adequately addressed. In its 2018-2022 strategy paper for Mozambique, the African Development Bank estimated that less than 33% of the population lived within 2km of an all season road. Recent investments in the country’s road infrastructure include a $780 million investment by South Africa’s Capital Projects to link the south of Mozambique with South Africa, a $110 million grant from the World Bank to develop rural roads, and the opening of a tender for investment in a highway connecting

Zimbabwe and Mozambique. Their arrival should, in turn, hasten investment across all other areas of transport infrastructure. The upshot of all this investment is that Mozambique has more intermodality in transport and logistics than ever before. When shipping to Mozambique, importers can now rely on intermediaries to provide a reasonably seamless delivery service whereby shipping companies interact directly with rail and road, where necessary. This is another area where Blockchain will make a huge difference, allowing cargo to be transferred securely and without breaches. In 2018, Beira played host to the 19th Intermodal Africa conference, which discussed this very topic. It featured a range of presentations and workshops on themes such as regional trade in the Nacala Corridor and best practices in Mozambique based on logistics company Bollore’s experience. What emerged from the conference is that Mozambique now has a range of options in this area that didn’t exist before, but that continued investment is required - particularly in warehousing to continue its progress.

https://www.privacyshield.gov/article?id=Mozambique-Transport https://www.forumchinaplp.org.mo/mozambique-trying-to-re-start-work-on-chinese-funded-airport/ 14 https://furtherafrica.com/2020/08/11/mrg-progresses-talks-for-mozambiques-chongoene-corridor/ 15 https://www.railwaypro.com/wp/mozambique-plans-modernisation-of-rail-network/ 16 https://www.afdb.org/fileadmin/uploads/afdb/Documents/Boards-Documents/MOZAMBIQUE_-_CSP_2018-2022__Final_.pdf 17 http://www.chinagoabroad.com/en/article/south-africa-s-capital-projects-to-invest-780-million-for-road-construction-in-mozambique 18 https://www.worldbank.org/en/news/press-release/2019/09/30/mozambique-receives-110-million-grant-in-additional-financing-for-ruralroads 19 https://allafrica.com/stories/202008110373.html 12

TRANSPORT INDUSTRY OVERVIEW

Freight, Transport & Shipping SWOT STRENGTHS

WEAKNESSES

Massive investment underpinned by 2012 gas finds

High levels of bureaucracy and corruption albeit moved up 12 places on CPI in 2020

New infrastructure currently being built (or proposed) in rail, road, seaports and airports

Over-dependence on commodity prices (formerly coal and ore, now gas)

Lower cost of doing business

Mostly unskilled workforce

Arrivals of international companies (e.g. GAC in 2008, Rangel in 2012, and Tschudi in 2019.) creates a stronger culture of freight, transport and shipping in the country Import duties and customs are among the lowest in Africa New institutions (such as the AMT) are already creating a more corporate culture in Mozambique OPPORTUNITIES

THREATS

Become a transport and logistics hub for sub-Saharan Africa

Climate change is a significant threat because of Mozambique’s location

PPP-financed infrastructure to develop transport infrastructure outside of Maputo

Political and religious tensions scare away international investors

Piggyback on increased logistics ability to develop e-commerce in the region

Falling energy prices (particularly in gas) undermine many government plans

Provide concessions to logistics firms for ports, railway lines, highways, etc.

Another political/economic scandal such as the 2016 ‘hidden debt’ crisis would be devastating

Encourage government to set up SEZ (special economic zones) which have worked well in other developing countries Build an industry-wide training program to upskill local population (government increasingly stipulates local employment in big contracts)

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COVID19: Impact, Reactions and the “New Normal” If there is a benefit to having a more remote population such as that of Mozambique, it’s that the country has suffered less of the contagion that has characterized more urbanized countries during the coronavirus pandemic. In terms of deaths per capita, at the time of writing, Mozambique has performed fourth best of all African countries, with less than 39 deaths registered in its population of 31.4 million people. hile the figures are cause for positivity, they’re tempered by the fact that, with 3 doctors per 100,000 people, Mozambique has one of the lowest doctor to patient ratios in the world. Many cases of Covid-19 are probably going unreported. Indeed, at the time of writing, new cases were on an upward trajectory within the country, with over 2,500 new cases reported in August - a monthly record. Like everywhere else, Mozambique could be facing a ‘new normal.’ For Mozambique, the ‘new normal’ in whatever form it takes, will need to prioritize logistics. As a country with two landlocked neighbours, it bears more responsibility than most countries to ensure that logistics continues to function normally. It will need to do this against a backdrop which is complicated to say the least. As the Head of Research at Allied Shipbroking has grimly pointed out: “Demand is caving and supply chains are in distress,”

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Inevitably, there has been some disruption. Most airlines have limited flights in and out of Mozambique to one a week, with significant amounts of air freight remaining in standby at warehouses all over the country. Sea freight is fully operational, with all documentation being submitted electronically. Meanwhile, road freight is largely closed with exceptions made for the entry of certain goods and medications. In the short-term, the negative economic impact is significant: The CTA (Confederação das Associações Económicas), a Mozambique Trade Association, estimates that Covid 19 could cost the domestic economy up to a billion dollars - or 7% of the country’s GDP. CTA President Álvaro Massingue is on record as saying that a new range of government-backed measures are required to stimulate the Mozambican economy in the post-Covid period. What stimulus measures might these include? Massingue suggests a tax holiday for

COVID 19

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COVID 19

many of the country’s citizens and businesses. Some essentials such as sugar and oil are already subject to this holiday, and customs barriers are being eased on several others. The cost of electricity is also being discounted and the government is implementing a financial aid package to the country’s SMEs. Unfortunately, the package amounts to less than $50 million. These changes may prove to be shortterm. Perhaps the biggest contribution to the ‘new normal’ will be an increased emphasis on improving Mozambique’s telecommunications network - a major asset to its transport industry. The country has seen a 13% increase in internet usage during the Covid 19 pandemic, as well as a surge in the use of the country’s postal services. All of this points to a more central role for logistics.

In the short-term, the Mozambican government has ordered the closing of all frontier crossing points, excluding:

Frontier crossing points – Land: • the Negomano, in Cabo Delgado Province; • Mandimba, II Congress and Entrelagos, Niassa Province; • Melosa, in Zambezia Province; • Cassacatisa, Cuchamano and Zóbwè, Tete Province; • Machipanda, Manica Province; • Chicualacuala, Gaza Province • Ressano Garcia and Namaacha, Maputo Province

Frontier crossing points – Airports: • Pemba Airport, Cabo Delgado Province; • Lichinga Airport, Niassa Province; • Nampula and Nacala Airports, Nampula Province; • Quelimane Airport, Zambézia Province; • Chingodzi Airport, Tete Province; • Chimoio Airport, Manica Province; • Beira Airport, Sofala Province; • I nhambane and Vilanculos Airfields, Inhambane Province; and • Maputo Airport, Maputo City.

Frontier crossing points – Maritime ports: • Port of Pemba and Mocímboa da Praia, Cabo Delgado Province; • Port of Nacala, Nampula Province; • Ports of Quelimane and Pebane, Zambézia Province; • Port of Beira, Sofala Province; • Port of Maputo, City of Maputo

https://www.worldbank.org/en/country/mozambique/overview https://www.wsj.com/articles/coronavirus-pushes-shipping-companies-into-survival-mode-11585819800 22 https://www.bollore-logistics.com/en/Pages/COVID-19.aspx 23 https://www.dw.com/pt-002/covid-19-mo%C3%A7ambique-suspendeu-30-mil-contratos-de-trabalho/a-54558693 24 https://www.rangel.com/pt/infohub/covid-19-impacto-nos-mercados/mocambique/ 25 https://www.cmjornal.pt/mundo/africa/detalhe/trabalho-remoto-em-mocambique-devido-a-covid-19-contribuiu-para-aumento-de-13-nastelecomunicacoes 20 21

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Sector Trends

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Thereâ&#x20AC;&#x2122;s little denying that the single biggest driver of change in freight, transport and shipping in Mozambique is the improvement of infrastructure.

SECTOR TRENDS

rom the dredging works at Maputo Bay in 2017 to the expansion of the Maputo Container Terminal (including installation of automated systems) and even the arrival of a series of multinational logistics firms raising the standard. But perhaps the biggest change of all has been the shift in mindset. An example of this could be seen a little over a decade ago, when Dr Sandra Sequeira, a professor of development economics at the London School of Economics conducted

system called ‘the Single Electronic Window’ (SEW). 9 months after its installation, couriers by land, sea and air were all reporting dramatically improved clearance times. But improved clearance time is wasted if there aren’t world class storage facilities. Kuwaiti logistics developer, Agility, has committed to developing a chain of international standard logistics parks across Mozambique, in an effort to appeal to international companies considering the country as a destination. Warehousing will

“Agility, has committed to developing a chain of international standard logistics parks across Mozambique” research into the effect of corruption at two competing ports in southern African - Maputo and Durban. Her research showed that the possibility of paying a bribe was significantly higher in Maputo, and that the size of the bribe was approximately three times higher. Although the results were shocking, the Mozambican government took initiative and moved quickly to act on them. Dr. Sequeira provided them with a list of recommendations, which ultimately led to Maputo adopting a set of anti-corruption policies and the development and implementation of an online

also be needed if Mozambique is to develop its export industry, allowing suppliers to drop cargo near transport hubs. All of these have contributed to Mozambique’s growing trade. 2019 marked another new record of 21 million tonnes of cargo at the port of Maputo - beating the 2018 record of 19.5 million tonnes and the expectation is that 2020 will be similar, albeit with the impact of COVID-19 having to be taken into account. Where freight, transport and shipping are concerned, everything is trending upward for Mozambique.

27 http://country.eiu.com/article.aspx?articleid=467607030&Country=Mozambique&topic=Economy&subtopic=Forecast&subsubtopic=Econo mic+growth&u=1&pid=404105824&oid=314105815 28 https://clubofmozambique.com/news/maputo-port-records-eight-per-cent-increase-in-cargo-152147/ 29 https://www.lse.ac.uk/Research/research-impact-case-studies/investigating-tackling-corruption-african-ports 30 https://docs.google.com/document/d/1r42MZ825uHlzck_pqniW2FJ3hcgaEzTWR_ro8qsYhrA/edit?pli=1 31 https://www.logupdateafrica.com/agility-to-build-warehouse-parks-in-mozambique-logistics

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The future is Blockchain Blockchain is revolutionizing the sale and movement of international cargo. In countries which have traditionally suffered from a lack of transparency, such as Mozambique, the positive impact it can yield on this industry can be even greater. The introduction of the Single Electronic Window, nearly a decade ago, shows how technology has the potential to level the playing field for smaller ports like Maputo. Blockchain promises to be no different.

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espite vast improvements in Mozambiqueâ&#x20AC;&#x2122;s shipping and international trade processes over the past decade - among them, the introduction of the SEW - some niggling issues still persist. These include issues around miscommunication (despite being a nominally Portuguese-speaking country, most Mozambicans speak Buntu), information being passed and repackaged incorrectly, and subsequent delays caused by all of this incorrect information. Blockchain technology ensures that the information contained in shipping documents is free from human error. With Blockchain, all of the stored records are tamper-free and from a verifiable source (usually the producer or the distributor). Because the data are tamperfree, thereâ&#x20AC;&#x2122;s less room for human error and/ or dishonesty. For countries like Mozambique, this greatly reduces the credibility gap which existed in the past. Blockchain also allows participants in the supply chain to view the progress of goods as they make their way through customs and the status of individual customs documents. This also has implications for the resonance of products. Now, when you order a product from Supplier A, thanks to Blockchain, you can be assured that the product you receive is that which was sent from Supplier A, and not somebody else in the supply chain. This wasnâ&#x20AC;&#x2122;t always possible. The end result of all of this is speed. Faster throughput decreases the pressure on logistics and reduces the cost for traders

BLOCKCHAIN

“For Mozambique, Blockchain has the potential to create a whole new paradigm”

- extra time in warehousing brings extra daily costs. Although the cost varies from company to company, in May 2020, Maersk and IBM created a digitized supply chain pilot using blockchain technology, which they estimated could reduce the average cost of transporting a shipping container by up to $300 (or 15% of the total cost). The implications of Blockchain aren’t just for shipping, however. The aforementioned benefits can just as easily apply to rail, road and air freight. For example, in air freight, the estimated 800 million unit load devices (ULDs) used to carry cargo on aircraft across the world are only partly digitized. Enter Blockchain: by removing the paperwork at

either end of the cargo’s journey, up to two weeks could be taken off the delivery time. For Mozambique, Blockchain has the potential to create a whole new paradigm. It means that as soon as the logistics infrastructure is in place - and as this document has shown, this is slowly becoming a reality e-commerce could become a reality. Growing consumer demand could add an extra layer to the country’s economy. In Mozambique, it’s not just logistics providers that are betting on the future of Blockchain.

32 https://www.supplychaindigital.com/technology/maersk-andibm-are-bringing-blockchain-tech-shipping-industry

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Infrastructure Projects The Maputo-Catembe Bridge When the Maputo-Catembe Bridge was officially opened on November 10, 2018, it meant more to most Mozambicans than outsiders looking in could know. The project had first been mooted approximately 30 years before, but several years of economic, social and political upheaval meant construction works were always put on hold. For Mozambicians, its arrival stood for a new era of optimism for their country and the end of civil war politics. A total of 187 kilometres of road were added at either side of the bridge - the biggest suspension bridge in Africa - making the capital much more accessible than ever before. The bridge and its adjoined road network also cuts the journey time between Maputo and the border with South Africa by 4.5 hours to just 90 minutes. The first direct bus route between Durban and Maputo opened up months after the bridge opened.

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The MPDC Master Plan The bridge, however, is just the centerpiece of a range of large infrastructure projects in Mozambique which will shift its trade potential up a gear. The Maputo Port Development Company (MPDC) was the country’s biggest investor in infrastructure between 2012 and 2016. Its Master Plan envisages $2 billion in logistics infrastructure development, approximately $1 billion of which has already been delivered. The fact that the MPDC is effectively a joint venture between the Mozambican Railway Company, (Caminhos de Ferro de Moçambique) and several private players in shipping and logistics, means that there’s much more joined-up thinking in infrastructure development in Mozambique than one might expect. Now, the railway company - which has doubled its freight within a year - has a direct interest in the performance of the ports and vice-versa.

INFRASTRUCTURE

The Port of Nacala The joined-up thinking also means that Maputo is not the only recipient of infrastructure investment funds. In 2018, the government announced a $273 million rehabilitation and modernization of the Port of Nacala in the north of the country. The port, the deepest port in southern Africa, will provide a logistics base for northern Mozambique as well as for its hinterland countries and should be ready in 2021. The new port will include a coal port terminal and a direct rail link between the port and the mine, located in the province of Tete, over 900 kilometres away. This should allow Mozambique to significantly ramp up its coal exports, which were 11 million tonnes in 2016 and moved to 22 million tonnes in 2017 - even without the rail infrastructure. And with the rail infrastructure in place, in time it can be used for cargo destined for the port other than coal.

Phase II of the Nambungali-Roma road At the beginning of April 2020, the African Development Bank (AfDB) announced that it had signed a financing agreement for $34 million for the second phase of the NambungaliRoma road. The project forms part of the Mueda - Negomano Road Project, linking Mozambique with neighbouring Tanzania. The project also complements the recently constructed Unity Bridge which crosses the Ruvuma River between the two countries. Several social projects also form part of the AfDB package, including local employment on the project and improvement of schools and medical clinics along the route. The road promises to be a boon to Mozambique trade with Tanzania. Mozambiqueâ&#x20AC;&#x2122;s exports to its neighbour reached nearly $70 million in 2013 before falling significantly to $24 million in 2018. The hope is that the new route can bring this above 2013 levels to a new patamar.

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INFRASTRUCTURE

Private Investment: DP World Maputo Expansion DP World, one of the most highlyregarded logistics operators has begun significant investments in the expansion and modernization of its container terminal at Maputo, bringing it up to the highest standards available in sub-Saharan Africa. These investments directly contributed, in April 2020, to DP World Maputo welcoming the largest vessel ever to the Port of Maputo, Maersk Shipping Line’s Santa Catarina. The improvements in productivity and customer-centric operations by DP World (and others) at Maputo Port means that welcoming vessels of this size is now a reality. DP World has created a fixed berthing window program, which means that no vessem waiting time can be achieved for every vessel entering the port . What’s more, ships like these with more TEUs mean make trade easier, creating a new paradigm for the country.

Beira Port Expansion The fishing industry has long been earmarked as an industry which can improve Mozambique’s food security as well as giving it a further export avenue and options for increasing employment. The expansion of Beira Port is central to this industry. Chinese investment in 2017 brought the port to the highest international standards, while further investment in 2019, with a cost of $120 million, doubled the length of the quay and added extensive cold storage. Refocusing again on cargo, the importance of the Port of Beira was further underlined throughout the Covid-19 epidemic. As other ports closed to cargo, Beria’s cargo throughput has increased. This year, it is expected that it will handle 2.5 million tonnes of cargo. Beira’s traditionally serves Zimbabwe, Malawi and Zimbabwe, all of which can now be reached by road and rail, which means Mozambique may soon begin fish exports to these countries. It should be noted that the expansion of cargo at Beira has not been at the expense of safety measures. Quite the contrary, in fact. The port has implemented a range of strictly enforced safety procedures - extensive handwashing, wearing of masks at all times and social distancing - as well as allowing 70% of employees to work from home. All of this will be complemented by an online document uploading system, which removes the need for face-to-face contact.

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INFRASTRUCTURE

Dredging at Beira Port For onlookers, it’s usually easier to pay attention to the visual or highprofile projects such as new ports, airports or bridges. But often it’s the projects which don’t get as many plaudits which can make an ever bigger difference. One such example is the dredging of the access channels and maneuvering channels at Beira Port. In July 2020, the second phase of these works commenced and expected to last a year. The first phase finished early in 2020, having begun in 2018. The total amount being dredged in the second phase is 1.5 cubic metres and the project will be undertaken by the China National Aeronautics and Transportation Administration. Its completion will provide considerably more leeway for larger ships coming into the port. Now ships of 60,000 tonnes can dock at the port at any time, whereas previous to the dredging, the port was restricted to 30,000 tonne ships.

Niassa Highway Project Further interconnectivity in Mozambique comes with the inauguration of the Niassa Highway at the beginning of 2020. Running over 200 kilometres, the highway links the two major cities in the northern province, Lichinga and Cuamba. More fundamental is the fact that it provides an international-class road between the port of Nacala and Mozambique’s landlocked neighbour, Malawi. Whereas rail is typically used by larger companies (such as coal producers) to transport their commodities, the introduction of a better road network in Mozambique provides new trade avenues for smaller, independent producers. The project also involved an upgrade of the Lichinga-Massangulo-Muita stretch of road, which cost $105 million and was financed by the Mozambique government, the AfDB and the JICA.

https://www.computerweekly.com/news/252480993/Air-industry-eyes-over-300m-savings-through-blockchain-for-cargo-efficiency https://www.iol.co.za/sunday-tribune/news/look-new-bridge-cuts-travel-time-from-kosi-bay-to-maputo-by-45-hours-17853331 35 https://www.cbn.co.za/featured/new-coach-route-connects-durban-to-mozambique-for-the-first-time/ 36 https://www.portstrategy.com/news101/port-profile/maputo-investment-pays-off 37 https://www.portstrategy.com/news101/port-profile/maputo-investment-pays-off 38 https://cdn.co.mz/en/modernization-of-the-port-of-nacala-works-started-last-week/ 39 https://www.arcadis.com/en/global/what-we-do/our-projects/latin-america/brasil/nacala-port/ 40 https://tradingeconomics.com/mozambique/exports/tanzania 41 https://clubofmozambique.com/news/just-in-santa-catarina-the-largest-vessel-ever-received-in-maputo-159166/ 42 http://www.portmaputo.com/largest-container-vessel-ever-received-in-maputo/ 43 https://www.seafoodsource.com/news/supply-trade/mozambique-faces-pitfalls-on-path-to-harnessing-fishing-industry 44 https://clubofmozambique.com/news/mozambique-beira-fishing-port-able-to-store-produce-for-a-year-172125/ 45 https://www.freightnews.co.za/article/beira-port-partners-non-profit-organisation-produce-masks 46 https://www.seetao.com/details/32902/en.html 47 https://www.dutchwatersector.com/news/van-oord-completes-dredging-access-channel-to-port-beira-mozambique#:~:text=Van%20 Oord%20completes%20dredging%20access%20channel%20to%20port%20Beira%2C%20Mozambique,-Dredging%20company%20 Van&text=The%20dredging%20project%20was%20ordered,any%20time%20of%20the%20day. 48 https://constructionreviewonline.com/2020/01/mozambique-inaugurates-key-niassa-highway/ 33

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Sustainability in The Sector The growth which Mozambique is set to enjoy over the coming decades will bring challenges as well as opportunities, nowhere less than in the area of sustainability. he more sustainable the investments made, the greater the legacy that Mozambique’s gas discovery will generate. This has resonance in every part of the country, from its education to its healthcare system. This section will focus on sustainability moves being made in transport and logistics. While many of the infrastructure projects outlined elsewhere in this document will inevitably grab most of the attention, one relatively small step taken by the Mozambican government in 2017 could well end up making a massive contribution to Mozambique’s transport infrastructure, despite largely occurring under the radar: The establishment of the Maputo Metropolitan Transport Agency (AMT). The AMT, whose vision is to ‘develop an efficient and sustainable public transport system which answers the needs of the population of Greater Maputo.’ Although there’s nothing immediately striking about the statement, from the perspective of those with a sustainability bent, the agency’s creation is nothing short of revolutionary; there is now joined-up thinking on sustainable transport in Mozambique. Sustainability will have a say in the country’s planning.

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The organization has already made a series of changes, which point to a changing culture of mobility in Mozambique. These include the introduction of top-up mobility cards for passengers, night services to ensure safe mobility of people at night, buses which cater for passengers using wheelchairs and most significantly, a Comprehensive Urban Mobility Transport Plan (2019-2030) which outlines a strategy for intermodal transport and an overground metro. In 2018, the AMT, in conjunction with the UN, launched the first annual Maputo Mobility Week, whose aim is to contribute to sustainable development of transport in Mozambique. One of the observations made during the first set of workshops was that, despite only 15% of Maputo’s residents owning a car, the city suffered from traffic gridlock on a regular basis; an unsustainable scenario which would only deteriorate as more pedestrians bought cars. Thankfully, investments continue to be made in public transport aimed at the shortterm. These include the recent addition of 80 new gas-powered buses at the beginning of 2020, for which the AMT used a combination of public and private finances. As well as increasing public mobility in the Greater Maputo area (including some of its least connected regions), the buses should reduce toxic gases by around 10,500 tonnes per year. The hope is that this welcome movement towards sustainability is reflected elsewhere in the country. But this will take time. While Maputo talks of an overground metro, almost

SUSTAINABILITY

“The organization has already made a series of changes, which point to a changing culture of mobility in Mozambique” 80% of Mozambique’s roads aren’t asphalted. Progress in these rural areas will be far more gradual. Increasing the country’s rail network and providing access to urban areas is a medium-term fix. More trade will also increase secondary cities’ budgets, allowing them to make improvements. All too often, we speak of countries being at a crossroads. Where sustainability

is concerned, for Mozambique, that is undoubtedly the case. Mineral wealth cannot last forever but its legacy can. The fact that Mozambique has been so underdeveloped until now means that, in many ways, it has a blank canvass that isn’t available to more developed countries when they’re developing their long-term strategic plans. Let’s hope Mozambique seizes the opportunity.

https://www.projectstoday.com/Project-Infographics/Newsletter/Mozambique-govt-inaugurates-315-km-Niassa-Highway http://www.amt.gov.mz/index.php/a-amt/missao-visao-e-valores http://www.amt.gov.mz/index.php/documentos/outros-documentos/plano-director-de-mobilidade-dos-transportes 52 https://news.un.org/pt/story/2018/06/1626812 49

50 51

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CONCLUSION

The Outlook for Mozambique “It would seem that the potential for Mozambique is boundless.”

everal academic research papers have confirmed the strong correlation that exists between logistics development and economic growth, with some of these showing that more valued-added is contributed to an economy by developing its logistics than any other sector. Logistics, recall, is not an end in itself: It provides a boost to all industries that currently exist in the country as well as incentivizing the commencement of ones that don’t. One statistic helps to explain the potential that all of this generates for trade in Mozambique; in June 2020, the African Development Bank said that Mozambique was one of the 5 worst countries on the continent of Africa for infrastructure, citing its lack of transport infrastructure in particular. Despite this, until recently, the country’s economy had been growing by 7% a year. But with infrastructure It would seem that the potential for Mozambique is boundless.

https://observador.pt/2020/01/13/mocambique-vai-importar80-autocarros-movidos-a-gas/ 54 file:///C:/Users/Owner/Downloads/23319-87283-1-PB.pdf 55 https://www.ersj.eu/dmdocuments/2018_XXI_2_52.pdf 56 https://www.researchgate.net/publication/255856079_ Relationship_between_Exports_and_Economic_Growth_of_ Pakistan 57 https://pdfs.semanticscholar.org/0c8e/ ab1863a94f1ce41339c2050e9dfa070ef3c5.pdf 53

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COMPANY PROFILES

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GRINDROD LOGISTICS AFRICA (PTY) LTD:

GENERATING NEW BUSINESS n March 21st, 54 African countries signed a landmark trade agreement committing signatories to remove tariffs on 90% of goods and commit to the long-term goal of a single African market. A massive step in the right direction for Africa. Combine this with the ongoing growth for demand in East Asia, where Grindrod has developed plans for generating new business links, and the future looks bright for the company.

Grindrod: Unlocking Strategic Trade Corridors We recently caught up with Grindrod Limited CEO, Andrew Waller, who kindly provided us with an overview of the company’s strategy and how he believes that Mozambique is set to benefit from flow-through trade that is being generated both along old strategic routes and newly opening strategic routes, in land-locked countries such as Malawi, Zambia, Zimbabwe and Botswana.

Overview of Strategy Grindrod, first established in 1910 as a small clearing and forwarding agency in Durban, South Africa, has evolved into an integrated logistics service supplier and a Bank. Listed on the JSE, Grindrod is a global business, employing 4700 people throughout its divisions – Port and Terminals, Logistics and Bank. Said Andrew Waller, CEO Grindrod Limited: “Grindrod was built on an entrepreneurial spirit, integrity, determination, hard work

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and a willingness to collaborate and form partnerships. It is this, together with our extensive experience that enables us to find efficient and smart solutions to complex logistics requirements. The continued global demand for African commodities underpins our strategic focus of unlocking key corridors in sub-Sahara Africa. This requires collaboration with key stakeholders, and investment in developing and extending freight infrastructure that benefits African trade. Grindrod’s experience in operating the Maputo Port, as well as strategically positioned terminals and rail networks has provided the foundation of progressing our strategy”. According to the company’s latest annual report, Grindrod are focused on unlocking the North/South Corridor - linking the DRC, Zambia and Zimbabwe to Durban and Richards Bay; Tazara Corridor - linking Dar es Salaam to the DRC and Zambia; Walvis Bay Corridor - linking the Port to the DRC, Zambia and Namibia; Chicualacuala Corridor linking Zimbabwe and Zambia to Maputo Port; Komatipoort - linking Maputo to South Africa and the Nacala Corridor - linking the Nacala Port to Zambia, Mozambique and Malawi

Freight Services Division Grindrod’s freight services division is its core competency. As Andrew tells us: “we offer services for the integrated movement of dry bulk, bulk liquid and containerised cargo along specific import and export corridors on the African continent. We provide road, rail and sea transportation, port operations, terminals,

GRINDROD LOGISTICS AFRICA (PTY) LTD:

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“The strength of these relationships has allowed Grindrod to weather the turbulence brought by the Covid-19 Pandemic.” intermodal solutions, storage, stevedoring, sea freight, ships agency services and integrated management services.” Offering such a broad portfolio of services is a result of both anticipating and reacting to what the market demands. As Andrew notes: “A key component is the ability to partner with strategic customers and the relevant authorities. This approach is long term in nature and the collaboration between these key stakeholders is paramount to a successful investment decision. This approach and the shared commercial benefits derived ensures that all stakeholders collectively perform and execute on their respective commitments.”

Coronavirus The strength of these relationships has allowed Grindrod to weather the turbulence brought by the Covid-19 Pandemic. Of this, Andrew says: “of course, we were impacted by the close of international borders and the legislation around essential cargo in South Africa, but the primary focus has been to safeguard our people and generate the cash needed to see out the lockdown period.” He continues: “At the same time many contingencies were needed by customers and through flexibility and commitment to the customer we were able to execute on tailored solutions in all the countries we operate in. This approach has been well rewarded by our clients who have expanded their service relationships with Grindrod.” Another of the mitigating factors for Grindrod during Coronavirus has been its near total digitalization, which means that it was able to protect its employees against the worst of the pandemic.

CSR and Sustainability With operations across sub-Saharan Africa, Grindrod is already responsible for bringing goods to and from some of the most underdeveloped areas in the world. It is conscious of its responsibility to the communities that live in these areas. Its CSR efforts are built on three pillars: economic, social and environmental and the company makes significant investments every year in all three. These efforts were stepped up during the

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GRINDROD

Coronavirus pandemic, when communities needed help more than ever before. As Andrew says: “Grindrod has many community projects in the counties in which it operates, principally focused on education. During this Covid time our businesses have taken time to deliver food parcels and PPE related equipment to some of the poorest communities in the greater Maputo and Nacala regions.

The strategy defined It will come as little surprise that a company which has grown so successfully over the past century has a solid strategy in place for the coming decade. Andrew tells us: “We are three pillars to our strategy. The first is the unlocking of trade corridors, which encompasses working with customers and supply chain partners to enhance efficiencies and freight flow in order to compete in global markets.” “The second is connecting and extending Supply chains, which is both an internal and external strategy driving the need to expand the networks to enhance efficiency.

Finally, the third pillar is investing and building infrastructure, which translates to rehabilitating or building new infrastructure required to unlock the trade corridor or extend the supply chains. Investments anchor our commitment to the customer and countries.”

The road ahead Asked about his perspective on the future, Andrew responded: “These markets will be shaped, in future, by three main factors; economic activity in South Africa and its proximity to Maputo, economic activity in Mozambique’s landlocked neighbours and the Oil and Gas developments in Northern Mozambique.. These developments will have a substantial and positive impact on African trade. If and when that does occur, Grindrod hopes to be part of how it plays out.

GRINDROD

www.grindrod.com

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ANE MOZAMBIQUE:

MARKING THE ROAD AHEAD FOR MOZAMBIQUE ith a coastline stretching over 2,000 kilometres, Mozambique, in southeast Africa, is home to some of the most stunning, preserved beaches in the world. Technically, this paradise should be more accessible than those in more popular tourist destinations like the Maldives and the Seychelles, but a historical lack of infrastructure has hindered progress on this front until now. Thankfully, things are changing in Mozambique. The National Road Administration (ANE, from the Portuguese Administração Nacional de Estradas) is responsible for developing the country’s road network, a crucial element of any country’s long-term strategy for tourism, trading and more. Over the past few years, it has made massive strides in moving Mozambique forward. A government organization, the ANE has recently stepped up its efforts to improve the nation’s road infrastructure, and there are already tangible signs that this work is paying dividends. We decided to look at the positive impact that these changes are already making on the lives of the Mozambican people, and

how modernization of the road networks by the ANE reflects broader changes happening in the country.

Origins and Early Days The ANE is an autonomous public company, founded in 1999 with the stated aim of “guaranteeing the connection and transport of people, goods and services in a way which is secure, economical and sustainable, contributing to the economic, social and cultural development of the country.” Its stated vision was to become a reference for road transportation on the continent of Africa. The importance of the ANE to Mozambique was underlined right at the outset. In 2001, it played a central role in bringing the country’s road network back to normality after severe floods hit in 2000. This importance was further emphasized by a World Bank report at the time, which showed that the share of ‘good and fair’ roads in Mozambique increased from 25% in 1996 to 56% in 2002. 2002 was also a big year for the ANE with the development of the N4 Toll Road Witbank creating a southern corridor to connect Mozambique with South Africa. Traffic on

“The importance of the ANE to Mozambique was underlined right at the outset.”

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ANE MOZAMBIQUE

“In 2018, the ANE announced that it was opening up the concessions of four roads, all connections from the EN1 highway”

the road grew by around 5-7% per year. The impact on trade was almost immediate and astonishing; in 2001, the year before the road was operational, Mozambican exports to South Africa were US$76 million; by 2012, this figure had grown to US$951 million. As the first road concession project in the country, the N4 Toll Road brought about a change in thinking for Mozambique’s roads: progress could be sped up considerably through utilizing investment from different sources. The lessons learned on the project are already being put into action on a number of other projects, which will bring Mozambique’s road network to a new patamar.

Delivering on its Mission A prime example of the ANE’s rethinking of road financing could be seen in 2016, when it announced in 2015 that the road between Nampula and Nametil, a distance of 72 kilometres that included six bridges and 49 aqueducts. The project was financed with a loan from the South Korea ImportExport Bank. Its new experience with project finance meant that the ANE could scale up its operations far faster than before. In 2018, the ANE announced that it was opening up the concessions of four roads, all connections from the EN1 highway, which would link three separate regions

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ANE MOZAMBIQUE

“The exponential growth of Mozambique’s economy over the past 20 years is indelibly linked to the establishment of the ANE” of the country. This initiative was followed in 2019 by the announcement of new 30-year concessions for five national roads. This includes construction, upgrades and maintenance and the transfer back to Mozambique after the concessions end. The EN1 highway, running north to south, is seen as pivotal to Mozambique’s ambitions in the development of its roads. When the suspension bridge over the Bay of Maputo was completed in late 2018, its connection with 115 kilometre road southward effectively extended the EN1 to around 2,600 kilometres. At the other end of the road, in the north, new paving will extend to the EN1 to reach over 3,000 kilometres in total, making it longer than the N2, the longest road in South Africa. Impact of the ANE’s Work The impact of the work that the ANE conduct is transformative. The growth in trade between Mozambique and South Africa over the past 15 years is just one indicator. Take the amount of time saved: a journey from Maputo, Zimbabwe’s capital, to the border with South used to take five hours. With the new road in place, it takes just over an hour to get there. For the underprivileged in Mozambique, rural roads now provide access to essential medical services, schools, social facilities and a range of opportunities that were literally cut off to them before. The government also estimates that tourism levels doubled in just a year, after the delivery of new roads in 2018. Most of these were from neighboring South Africa but it points at huge potential in the future.

Then there’s the new road that connects Mozambique with Tanzania - the first time that a paved road has existed on this route. The “Unity Bridge” which crossed the Rovuma River that runs between the two countries, was built in 2010. And yet, it was unused because of a lack of roads on the Mozambique side. Now that these roads have been delivered, another trade route and a range of economic opportunities has opened. No wonder the President of Mozambique called it “a dream come true.”

The road ahead The exponential growth of Mozambique’s economy over the past 20 years is indelibly linked to the establishment of the ANE. On its foundation in 1999, Mozambique had a GDP of around US$5 billion. By 2017, that had grown to around $12 billion and by some estimates, 2019 will be closer to $15 billion. Huge opportunities are arising everywhere in Mozambique however the team at ANE understand that opportunities are predicated on solving the current challenges as stated by the Director General of ANE, IP, Américo Dimande “the current challenges of ANE, which are enormous, and that each one must contribute, to jointly overcome them, mainly in the management of Human Resources, in the maintenance of roads, heritage and other areas”. ANE MOZAMBIQUE

www.ane.gov.mz

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SKYNET:

LONG PATH AHEAD IN MOZAMBIQUE ith over 20 years on the Mozambique market, Skynet Worldwide Express is already considered one of the stalwarts of the Mozambique Transport and Logistics market. With its focus on international and domestic courier parcel express, the company already has a footprint which would be the envy of many of the companies now entering the country: 10 offices, over 100 staff, and 50 vehicles all focused on providing world-class service to Mozambique. Skynet has offices across all of the country’s population centres, meaning it can serve a much larger portion of the population than almost anybody else in its industry. These offices are located in Maputo, Inhambane, Vilankulos, Beira, Chimoio, Tete, Quelimane, Nampula, Lichinga and Pemba. The city of Nacala is serviced by Nampula and the whole province of Gaza is serviced by Maputo. Furthermore, the hubs allow Skynet to service not only the main provincial capitals but all the rural areas in Mozambique. This footprint is the platform on which Skynet is building a strategy to increase its service portfolio by offering consolidated doorto-door service at economy rates, combined with hassle-free customers clearing service

(a crucial differential when almost a half of all end-user products in Mozambique originate in South Africa). Skynet is also investing in its bond storage facilities to accommodate both air and road freight, making it a one-stop shop in the express supply chain logistics business. This suite of services is underpinned by what the company itself likes to call ‘client centricity’, quality service and value for money. The company has won the PMR Gold and Diamond Arrow for the Best Courier Company in Mozambique every year since 2009 (see: http://www.pmrafrica.com) in addition to Best Overall Performance in Africa at the last Skynet World Conference in 2016. Furthermore, its operations are governed by the strictest possible SHEQ (safety, health, environment and quality) rules. Skynet Worldwide Mozambique is also a responsible active participant in Mozambican society, contributing to sustainability improvements in carbon emissions, water and electricity usage. It is a proud and active member of ‘Made in Mozambique’ a Mozambican sustainability initiative and is a responsible corporate citizen on the ground in Mozambique, where it sees its role not just as a logistics provider, but as a contributor

“Skynet has offices across all of the country’s population centres, meaning it can serve a much larger portion of the population than almost anybody else in its industry. ”

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SKYNET

to the ongoing economic growth story in this corner of Africa. As just one part of a much larger organization, it would be easy for Skynet Worldwide to overlook Mozambique. Instead, it sees the country as having huge economic potential and becoming an even more important member of the Skynet family. For example, it sees the development of logistics in Mozambique as being the cornerstone of ecommerce growth across southern Africa. In 2020, it became the market leader in consolidated cross-border road express logistics in Mozambique, and despite its undoubted progress, there’s a long path ahead for Skynet Logistics in Mozambique.

“Skynet sees the country as having huge economic potential and becoming an even more important member of the Skynet family” SKYNET

www.skynetworldwide.com

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AFRICA FREIGHT GROUP:

BEATING A PATH IN MOZAMBICAN LOGISTICS he evidence that increased freight traffic passing through Mozambique is already generating opportunities for local firms is everywhere in the country. Africa Freight Group Lda (AFG), a Mozambican freight and logistics company founded in 2016 is one such example. In its short time of operations, AFG has become one of the country’s most recognized players in freight brokerage services. AFG offers a suite of services to its clients, which it combines with dedicated local knowledge. These include customer clearance, ocean freight services for both importers and exporters, and 3PL logistics, the need for which is steadily growing in Mozambique thanks to its nascent ecommerce industry. Whatever service the customer avails of, they can benefit from the in-house tracking system which the company has developed. One of the advantages that AFG has over others in the market is that all of its management and employees are local. The

company was borne ase much out of their experience in logistics as their ability to understand where demand was in the market. This also means a more personalized service to anyone that uses AFG - unlike some freight companies, AFG assigns a project manager to each client to ensure direct contact with all aspects of the job. This level of personalization and local expertise has seen AFG grow its client base to scale remarkably quickly. But as the clients arrived, AFG made an effort to continue to focus on what made it successful in the first place - solutions specially tailored to each individual client which avail of the most up-to-date local knowledge. Furthermore, its industry contacts mean that it can do this for the client, regardless of the size of the company or the shipment. As an example of the level of personalization which AFG provides each and every client, it provides the client with a digital recording of the task in question being carried out,

“As an example of the level of personalization which AFG provides each and every client, it provides the client with a digital recording of the task in question being carried out, and ongoing tracking services”

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AFRICA FREIGHT GROUP

“From humble beginnings in 2016, AFG experienced tripledigit growth to become one of the most recognized names in Mozambique’s transport and logistics ecosphere” and ongoing tracking services. There are also whatsapp messages, a dedicated team member to deal with queries, At each part of the service, the best-in-class security means that the client has complete peace of mind that the product will be delivered. All of this has enabled AFG to create a stable of trusted and repeat clients, which now numbers over 50. These clients come from Mozambique, neighbouring African countries like South Africa and Botswana, and across the Middle East and Asia. Their requirements have already led AFG to invest in services that it didn’t deem necessary at the outset of its journey. Proof, if it were needed, that trade by its very nature generates fast progress in a country.

From humble beginnings in 2016, AFG experienced triple-digit growth to become one of the most recognized names in Mozambique’s transport and logistics ecosphere. Given the speed at which this industry is changing in Mozambique, AFG is unlikely to be the last of its kind. Why would it be? Its success has beaten the path for other Mozambican entrepreneurs thinking of making their way in the country’s burgeoning transport and logistics industry.

AFRICA FREIGHT GROUP

www.www.africafreights.net

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LAM (LINHAS AÉREAS DE MOÇAMBIQUE):

MOZAMBIQUE’S FLAG CARRIER irlines occupy a special role in the trade promotion activities. Although most cargo is still transported by ship and rail, there’s a reason that national airlines are called a country’s flag carrier. They present an outward image of the country which will be seen by millions. More than just a means to an end, the image they present has to portray several qualities: safety, efficiency, technologically advanced and more. For Mozambique, this mantle is held by LAM (Linhas Aéreas de Moçambique), the national airline, which was founded in 1937. Andre Marime of LAM Cargo recently explained the role that LAM plays in Mozambique’s trade ecosphere. He tells us that LAM Cargo is now offering a full suite of cargo and courier services, reflecting the growth of demand for these services in Mozambique over the past few years. One of the company’s current priorities is to explore new market opportunities. With its growing transport links to its neighbours, Mozambique has a regional catchment area of over 70 million people. LAM therefore has a central role to play in regional and not just national trade. This is reflected in the reopening of the Lisbon-Maputo route in August 2020. Of this, Mr. Marime says: “this is a significant addition to our cargo options, both for imports and exports.”

Air transport is an important component for any country which wishes to enhance its value-added trade. While commodities more easily flow across borders, high value-added trade such as services requires consultation and visits from foreign management teams. Universities will also benefit as their students spend semesters abroad and foreign professors come to Mozambique. LAM’s role here is therefore much larger than just cargo transport. Of course, like everybody within the wider logistics industry, LAM has been impacted by the Covid-19 pandemic, but strived to ensure that operations continued as normally as possible. Mr. Marime notes: “All efforts were made to continue working through the difficulties. For example, we have been working and operating only our domestic flights with significantly reduced shipments, meaning a reduction of traffic and consequently, revenue as well.” In terms of practical steps being implemented by LAM, Mr. Marime points to the implementation of protocol which is now recognized internationally as standard procedure. He says: “LAM Cargo has introduced some restrictions on distance for all stakeholders involved in cargo services. For example,everyone has to obey a minimum

“Air transport is an important component for any country which wishes to enhance its value-added trade.”

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“Africa is effectively the last frontier for modern air transport and this is reflected in the number of new airports currently being developed across the continent.” distance of two meters with others, and we’ve created work group teams with some supervisors to ensure that everyone is using gel, and that there are masks being used by everybody in the cargo area.” In the longer term, the Covid-19 pandemic should prove to be little more than a speed bump in LAM Cargo’s ongoing expansion. Several factors are working together to ensure this is the case. As Mr. Marime underlines: “We believe that once the government decides to change the procedures and rules of the repatriation flight, the market will have to change and LAM’s leadership is already defining some new features within the cargo business to respond to this.” Africa is effectively the last frontier for

modern air transport and this is reflected in the number of new airports currently being developed across the continent. From Mozambique to Tanzania, Zambia and Senegal, shiny new airports are being developed to cater for the coming demand. LAM Cargo is set to play a central role in this burgeoning new trade. Seeing the Mozambican livery on the runways of the world’s most famous runways will let the world know that LAM Cargo and Mozambique have truly arrived. LAM (LINHAS AÉREAS DE MOÇAMBIQUE)

www.lam.co.mz

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LBH MOZAMBIQUE:

LET US GIVE YOU THE LOGISTICS TO MOVE YOUR BUSINESS FORWARD BH Mozambique has been providing ships agency and logistical services in Mozambique for over two decades with offices in all major ports. An integral part of the LBH Group, a highly focused and motivated global shipping agency and logistics group specialising in dry and liquid bulk agency. LBH’s scope in Southern Africa has grown to include ships agency, inland logistics monitoring and coordination as well as the creation of alternative export routes and facilities. It has become a specialty of LBH to be able to find alternative and innovative corridors for commodities for either export or import.

People Management LBH Mozambique’s Managing Director Athol Emerton advises “Our goal is to represent our customers at the transition between land and sea at all major ports as well as be forward

thinking and innovative in the development of logistics solutions to create opportunities for our customers. Our traditional ships agency functions service levels are critically important but in the excitement of development in Africa we have to be very much aware of opportunities and creating solutions for our customers. To this end we now offer full up and down-stream services along the supply chain. These value added services are now operational.”

Supply Chain Management LBH Mozambique is a pioneering force in the country, from its headquarters in Maputo LBH Mozambique has expanded to include offices in Beira, Moma, Nacala, Nampula, Pemba and Mocimboa da Praia. LBH also has a fully fitted launch which operates a floating office and able to serve remote sites such as Angoche and Palma. LBH facilitates a significant number of shipments through these ports.

“An integral part of the LBH Group, a highly focused and motivated global shipping agency and logistics group specialising in dry and liquid bulk agency.”

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LBH MOZAMBIQUE

“LBH Mozambique has taken a keen interest in the development of the ports as both transit and national facilities.”

LBH Mozambique has taken a keen interest in the development of the ports as both transit and national facilities and has actively promoted and assisted in developing the current traffic levels and will continue to do so. Through this experience and history LBH Mozambique is strategically positioned to also facilitate the majority of the Oil and Gas related cargoes that will be required for the development in Northern Mozambique. Mozambique’s transit traffic tonnages have increased in quantum’s over the last decade but now local industries’ and mining companies’ tonnages are growing and Mozambique national cargoes will also start to make significant upward trends in volumes. LBH Mozambique is perfectly situated to assist cargo and ship interests with local knowledge but with the security of being part of an established global Group.

Exemplary Customer Service Athol Emerton, Managing Director of LBH Mozambique, quotes “We have been in Mozambique for a very long time; we have had a long and sometimes painful journey but have always been very confident of the people and the Government of Mozambique and CFM to develop the infrastructure or create opportunities for others to do so. This has happened and it is now a great place to operate in and we take delight in being able to offer our customers typical LBH Group world class service in this developing environment, including the oil and gas industry here in Mozambique.” LBH MOZAMBIQUE

www.lbhafriaca.com

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MANICA FREIGHT LOGISTICS:

LONG LIVE MANICA here aren’t many companies which make it past the 100 years mark, but when they do, it’s usually because they possess a combination of management and operational nous that few other companies do. These companies are all the more remarkable when they’ve succeeded in the face of a century of political upheaval. The first paragraph could aptly describe Manica Freight, one of Mozambique’s oldest companies. We recently caught up with Faruque Assubuje, Liner and Project Manager at Manica Freight, who was able to give us more colour on exactly why the company was able to reach and surpass that 100-year milestone

When Manica grows, Mozambique grows Mr. Assubuje began by telling us a little about the company’s origins, and in particular, its close ties to the history of Beira City (taking its name from the Portuguese word for ‘shore’), a city for which port activity was fundamental for its economic and social development, including its role in the city’s resurgence after the second world war. He says: “our company is directly involved in structuring and construction of the

“hinterland” railways and of Mozambican ports and is intimately linked to the history of Beira City – the place of its manifesto and evolution. Even today, Manica has one of the most iconic and architecturally magnetic buildings, Casa Infante de Sagres, built in 1930.” He says that the firm has been built on the vision of two remarkable founders, Julius Altson and Joseph van Praagh: “They played a key role in the current positioning of Manica due to their innovative spirit and to their risk approach. They worked without any compensation for the first 20 years, a clear reflection of their commitment to that vision and mission of the company and of their relentless confidence in the future.” Through their dedication and persistence, Manica began to grow against all the odds. And the growth was fast – primarily through the export to Europe of commodities such as chrome, minerals, sugar, maize, cotton and rubber. This contributed to the company being able to expand its operations to Namibia, Swaziland, Lesotho, Botswana and Africa’s Atlantic coast. Before long, Manica’s ambition, combined with its operational excellence, allowed it to expand its sales network across continents,

““Manica is proud to be the first Mozambican Company to be awarded by the acknowledged SABS ISO 9001-1998 for International Freight Services, under the operation of ships, international shipping, maritime services and warehousing.”

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MANICA FREIGHT LOGISTICS

with clients as far afield as Japan and Venezuela. Its reach also made it an obvious candidate to open a travel arm, allowing it to diversify its operations and begin ferrying people as well as cargo. Finally, in the 2000s, after several mergers and acquisitions, the firm was far larger – and more international – than the one that began all those years back in Beira. As Mr. Assubuje says: “In November 2000, Manica went through a profound structural change, as part of a regional initiative, and became a totally Mozambican company. This merger came to claim the importance given by the company to the local context, as it always proudly took into consideration the Mozambican traditions, habits and trends and combined them with world-class solutions.”

Mozambique’s benchmark for quality Not only can Manica justifiably claim to be Mozambique’s most international firm – it can also claim to be a benchmark for quality in the country. As Mr. Assubuje says: “Manica is proud to be the first Mozambican Company to be awarded by the acknowledged SABS ISO 9001-1998 for International Freight Services, under the operation of ships, international shipping, maritime services and warehousing.” Currently, the firm is also in the process of achieving an upgrade to SABS ISO 90012015. In addition, the company is a member of Multiport, the world’s largest network of maritime industry operations, whose team works closely with Manica to ensure high standards of professionalism, integrity and quality in services provided. Although the firm is diversified, Mr. Assubuje is keen to emphasize its core focus remains the broader shipping industry: “Ships Agency is still our core business, together with warehousing, clearing and forwarding. Despite the recent challenges in the shipping industry we still retained the number of staff to around 245 by reengineering some of our

processes and diversifying into new areas of activity.”.

Well into its second century Well into its second century, Manica can look to the future with optimism. It can be easy to forget that the gains the company made in the 20th century were made on the back of very little infrastructure. With the continuouslyimproving modern day infrastructure now at the company’s disposal, it stands to reach huge rewards in the years ahead. Mozambique’s motto states, “Long live Mozambique, united from the Rovuma (a river in the country’s north, marking its border with Tanzania) to Maputo.” Thanks to Manica and its remarkable story, Mozambique can now claim not just to be united within its borders, but also connected to the rest of the world.

MANICA FREIGHT LOGISTICS

www.manica.co.mz

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Cargo Handling Agents & Freight Forwarders Africa Freight Group (afg) Lda Maputo and Beira Rua de Mesquita 222, 2 andar 23, Maputo +258 847170894 http://www.africafreights.net/ Agility East Africa Warehouse Logistics www.agility.com +258 87 478 4780 Alov air-sea ltd Maputo Airport No. 910 Rua de Sofala Primeiro Andar Est, Mozambique, +258 08168202126 http://www.alovair-sea.com/ AMT Transport authority www.amz.gov.mz +258 84 58 32549 BE Logistics Lda Beira Rua General Viera Da Rocha, 1050- Pioneiros, Beira , Sofala +258 845 755 551 http://www.mozambiquefreight.biz/ Beira Air and Cargo Freight – International Shipping LDA Beira Largos DOS CFM, Pousada, Door No 3, Ground Floor, Porto da Beira, Beira +258 (2) 332 0646 Beira Cargo Handling Lda Beira Dr Eduardo Ferreira, De Almeida N 51, 1st Floor, Beira PO Box 49, Beira +258 (23) 326245

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CFM (Portos e Caminhos de Ferro de Moçambique) Integrated port and rail operator www.cfm.co.mz +258 82 544 8100 DHL Moçambique Logistics operator www.dhl.co.mz +258 21 225 300 Diamond Shipping Services Ltda Maputo Suite No H-5, 7th Floor, Jat IV Building, Zedequias Manghanela Avenue 267, Maputo +258 (21) 320872 http://www.dssuae.com/ DP World Maputo Logistics operator www.dpworldmaputo.com +258 84 398 5160 DSV Mozambique ogistics operator www.https://www.dsv.com/en/ countries/africa/mozambique +258 21 427 141 Fama Cargo Lda Maputo Airport Bairro do Jardim, Maputo, Mozambique, 1109 +258 847996099 Grindrod Mozambique Ltda Shipping services www.grindrod.co.za +258 21 359 100 IMA Mozambique – AMI International Beira Rua/Road: Largos do CFM, CFM Building, 7th Floor, 1st Door, Beira +258 (2) 332 7315 http://www.ami-worldwide.com/

DIRECTORY Imago Logistics Limitada Maputo Av Mahomed Siad Barre, nr 86, R/C, Baixa Central, Maputo +258 (21) 318631/3 http://www.imagologistics.co.mz/ Manica Freight Services (Mozambique) SA Maputo PO Box 292, Praca Dos Trabalhadores 51, Maputo +258 (21) 356500 http://www.manica.co.mz/ Maersk Mozambique Shipping services www.https://www.maersk.com/localinformation/africa/mozambique +258 23 321 000 Marperita Shipping services http://www.marperita-mozambique. com/ +258 23 327 587 Mozambique Ministry of Transport & Communications Government ministry www.mcli.co.za +258 21 496746 MSC Container shipping www.msc.com +258 21 302 150

Rangel Mozambique Logistics operator www.rangel.com +258 21 422 236 RP Business – Logistics, Freight & Custom Broker Maputo Nr. 22, Rua de Kassuende Nr 22, 1º, porta 3, Maputo, Maputo, 1100, Mozambique 258 842505380 rui@rpbusiness.net https://www.rpbusiness.net/ Sharaf Shipping Agency Limitada Beira Suite C, 2nd Floor, Palacio/Companhia do Sena Building, Rua Costa Serrao 225 Baixa, Beira, Sofala +258 (23) 325719 http://www.sharafshipping.com/ Swift Freight International Maputo Rua Da Mesquita 213, Maputo Box 4264, Maputo +258 (213) 229539 http://www.swiftfreight.com/ Tiba Mozambique Lda Maputo +258 (21) 304954 http://www.tibagroup.com/

Ramas Moving & Logistics Ltd Maputo No 1132 Avenida Marien Ngouabi, Maputo +258 (82) 592 8200 http://www.ramasmoving.com/ Port Maputo Port operator www.portmaputo.com +258 82 256 3543

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Produced by: www.bus-ex.com

Mozambique Frieght and Shipping - Special Report 2020-2021

Articles inside

LBH Mozambique

LAM (Linhas Aéreas de Moçambique

Africa Freight Group

ANE Mozambique

Skynet

COMPANY PROFILES: Grindrod Logistics Africa (Pty) Ltd

Infrastructure Projects

Business Continuity and Sustainable development

Conclusion

Blockchain

Sector Trends Driving Change

Covid 19: Impact, reactions and the new normal

Freight Transport & Shipping SWOT

INTRODUCTION: Market Overview