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Navigating the future of logistics in sub-Saharan Africa: opportunities and challenges

The potential for logistics in Sub-Saharan Africa is immense. With a population exceeding one billion and a rapidly growing middle class, consumer demand for goods and services is on the rise. According to the African Development Bank, the continent’s GDP is expected to grow by 3.4% in 2024, driven by increased consumer spending and improved business climates in key economies.

Initiatives like the African Continental Free Trade Area (AfCFTA) aim to boost intra-African trade by reducing tariffs and streamlining customs procedures. This agreement, covering 54 African countries, is creating a single market of 1.2 billion people with a combined GDP of over $3 trillion, offering unprecedented opportunities for growth. Investors are increasingly exploring opportunities in Africa across sectors such as energy, mining, construction, and logistics.

As the global transition to renewable energy accelerates, Africa further has the potential to become a key hub for both renewable energy and critical minerals. The continent is rich in critical minerals vital for manufacturing renewable energy sources and possesses untapped natural gas fields. Effective integration of strategic logistics solutions is essential to fully unlock this economic potential.

The opportunities and challenges that lie ahead for logistics in Africa present a unique landscape for growth and innovation. However, to harness this potential, we must address the inherent challenges with foresight and strategic planning.

Opportunities abound

The logistics sector in Africa is poised for significant advances due to several key factors.
Firstly, the continent's infrastructure development is gaining momentum, with numerous investments targeting roads, railways, and ports to enhance connectivity. Improved transport networks will facilitate smoother distribution channels, allowing businesses to thrive.

The rise of e-commerce in Africa is transforming the way goods are traded, creating a burgeoning demand for efficient logistics services. As more consumers turn to online shopping, companies must adapt their logistics strategies to support rapid delivery models.

The adoption of technology in logistics—ranging from advanced tracking systems to automation—offers the potential for increased efficiency and reduced costs.

Lastly, as African countries continue to embrace renewable energy solutions, there's an opportunity for sustainable logistics practices to emerge, aligning with global efforts to combat climate change.

Collectively, these opportunities signal a transformative era for the logistics landscape in Africa.

Challenges to overcome

Despite these opportunities, the logistics sector in Sub-Saharan Africa faces significant hurdles.
One of the primary challenges foreign investors face in Africa is the underdeveloped infrastructure for logistics. The World Bank reports that less than 30% of the continent’s roads are paved, which exacerbates the costs and complexities of moving goods. This shortfall hinders the economically viable import and export of essential strategic goods and minerals needed to establish new markets and infrastructure.

While large international corporations have recently made substantial investments across the continent, it is crucial for African nations to focus on upgrading and repairing existing supply chain assets, such as roads, railways, ports, and warehouses to enhance their capacity to attract further foreign investment.

High logistics costs, exacerbated by inefficient port processes and a lack of digital solutions, remain a primary concern. Moreover, regulatory hurdles continue to impede the seamless flow of goods across the region. Inconsistent customs regulations and lengthy clearance times can lead to delays and increased costs, impacting the overall efficiency of supply chains.

Inefficient port processes are critical nodes in the logistics network, and many African ports suffer from inefficiencies that lead to delays and increased costs. Modernising port infrastructure, implementing advanced management systems such as automated container handling, and real-time tracking could significantly enhance port efficiency. Additionally, while the potential of digital technologies is vast, their current adoption in Sub-Saharan Africa is slow, necessitating investments in technology and digital literacy to overcome these challenges.

A strategic approach

At DACHSER South Africa, we understand these challenges and are committed to providing intelligent logistics solutions that cater to the unique needs of the Sub-Saharan market. Our approach leverages technology and a deep understanding of the local market. We offer customised services such as air and ocean freight, contract logistics, and warehousing solutions tailored to specific industry needs. For instance, our expertise in automotive and healthcare logistics allows us to support these critical sectors with precision and reliability.

Information security is a cornerstone of our operations. We have obtained TISAX® Level 2 certification, ensuring that our logistics processes meet the highest standards of data protection. This commitment to security helps safeguard our clients' supply chains and builds trust in our capabilities. Sustainability is also a key focus for DACHSER. We are actively working to reduce our carbon footprint through investments in energy-efficient technologies and more sustainable transport solutions. Since 2022, Dachser has been purchasing 100% green energy on a global level.  By promoting eco-friendly practices, we aim to lead the charge towards a more sustainable logistics future in Africa.

The future of logistics in Sub-Saharan Africa is bright, but realising its full potential requires a concerted effort to overcome existing challenges. By harnessing the region's opportunities and addressing its hurdles with innovative solutions, we're confident in our ability to drive growth and efficiency in this dynamic market as we work with our clients to navigate the complexities of the logistics landscape and unlock new avenues for success in Africa. The AfCFTA and regional cooperation will be vital in this transformation, connecting African markets and enhancing global competitiveness. Now is the time for businesses to invest in Sub-Saharan Africa; the potential for growth and development is immense, and with the right strategies in place, the region can become a global logistics powerhouse.

Corporate Compliance - Integrity is a question of attitude

"Integrity in Logistics" is the self-imposed moral commitment of the major family-led company DACHSER. It is based upon respect for society, its citizens and their norms, which must be respected, followed and upheld. This is done both as part of our daily work as well as in our interactions with others.

DACHSER Compliance Management covers both the internal company Code of Conduct as well as the DACHSER conduct guidelines. These mandatory rules and guidelines clearly specify that all DACHSER employees are to act ethically and legally in carrying out their tasks and services and consistently adhere to national laws. This also applies to the customs, traditions and societal values of each state and society.

If you would like to play an active part in supporting the DACHSER Compliance Management System or report potential misconduct, you are welcome to use our compliance reporting system supportDACHSER.

Compliance Statement of the Executive Board of DACHSER Group SE & Co. KG

A resilient compliance management system is an important pillar for maintaining integrity, also and especially in times of global challenges.

Once again, people are being shown that they do not always have everything one hundred percent under control. The worldwide exceptional situation of the pandemic can only be influenced to a limited extent by political or economic interests. International supply chains seem to be out of control. Especially in such a situation, it is important to give people the necessary confidence that their basic supplies will be maintained. Global supply chains are under enormous pressure because they form the backbone of any supply.

DACHSER is facing up to all these developments. With our global logistics network and our sophisticated systems, we are excellently equipped to meet the challenges ahead.  In times of reinventing delivery strategies and the general fear of further escalation in the market, we at DACHSER never lose sight of the most important piece of the mosaic: the people. Each of us has it in our hands to make our individual contribution in the interest of all. At the same time, especially in times like these, people long for a sense of trust and security. A shared understanding of values certainly makes a significant contribution to fulfilling this longing.   

Our compliance motto "Integrity in Logistics" not only provides our own employees with guidance for acting in accordance with our DACHSER values. Rather, our business partners can also align themselves with this strong foundation. Together, we thus form the basis for trusting cooperation in line with the traditional ideals of the honorable businessman. 

In addition, we are sending out another signal to express our value-based actions: DACHSER has used the past year intensively to expand the options it previously made available for reporting compliance violations. With supportDACHSER all persons now have a technically supported option for reporting in addition to the analog contact channels. The highly secure system offers full anonymity and complies with all relevant data protection requirements. In this way, both internal employees and external third parties are enabled to report potential integrity violations to the DACHSER Compliance Office without fear of reprisals.

Even in times of great challenges Compliance does not take a break. With "Integrity in Logistics" we are always at the side of our business partners as a reliable partner.

Craft food trend requires suitable logistics concepts

Since the outbreak of the coronavirus, the demand for craft food has increased significantly. Throughout Europe, more and more consumers are attaching importance to sustainably produced food, produced in small manufactories and not by large industrial companies. A trend that requires dedicated logistics experts.

The demand for sustainably produced food is increasing significantly. For example, 82 percent of all Germans already make sure when buying food that the product comes from the region. This is the result of the representative survey "Nutrition in the Corona Crisis" conducted by forsa on behalf of the German Federal Ministry of Food and Agriculture (BMEL) among 1000 citizens. Small businesses with craft competence and food start-ups wanting to position themselves in the market with craft food and wanting to preserve the tradition of the food craft increasingly profit from this development.

"Regionality and sustainability are gaining importance."

Consumers focus on sustainability and, in small quantities, food produced according to traditional methods. "Sustainable" has become the buzzword for healthy, environmentally friendly food. "The world is changing. It is a genetic phenomenon that in times of upheaval, people look for new sources of food," explains futurologist Max Thinius. For years he has been conducting research on the subject of food, advising various regions in Germany on the digitization of everyday life, the working and nutritional world of the population and is a frequent guest on the German government's scientific advisory council.

"Regionality and sustainability of food, but also the health of the individual, are becoming increasingly important. In the future we will have food of the best quality and new technologies to evaluate and use this quality in relation to our health". According to Thinius, new production methods such as intercropping, in which different plants are cultivated that complement each other in terms of growth and soil use, and selective care carried out by care and harvesting robots will make up to 90 percent of pesticides redundant in the future, he says.

"Soon, Craft Food will no longer be confined to the small regional grower. Together with intelligent working environments and modern technologies, large new food structures are in the process of being created here.” But the new food culture’s pioneers are currently still the small, innovative farms.

Small quantities safely transported – all across Europe

This rapidly growing craft food movement requires logistics concepts that meet the requirements. "Food manufacturers place different demands on logistics providers than industrial companies do", says Marc Hackländer, Head of European Network & Partner Development at DACHSER. The products are only manufactured in small quantities for narrow, like-minded target groups, not for an anonymous mass market where availability and price are the focus. As a result, the major European retail chains and discounters are often excluded as recipients. Nevertheless, these manufacturers, which up to now have often been regionally oriented, are looking for new sales channels and are attracting interest from customers in neighboring European countries.

The European Food Network specializes in the Europe-wide transport of food, even in small quantities. The member companies of the alliance are ideally positioned for this type of job. The food logistics companies are regional specialists who have grown over many years from family structures to national players, but have always remained close to their customers. Marc Hackländer: "The vehicles must be able to cope with the conditions at the pick-up and delivery location, often there are no ramps. Communication and customer processes take place on other levels - this is where listening and consulting are required, flexibility, solution orientation, thinking along with the customer. This is time-consuming, but it is worth it and it is a pleasure to be able to grow with the companies".

To mark the occasion: update of our Brexit checklist

The EU withdrawal of the United Kingdom was completed on 31.01.2020. Currently we are in a transition phase which ends on 31.12.2020. A further extension of this transitional phase should have been agreed until 01.07.2020 and is therefore no longer possible. Thus, the United Kingdom will no longer be part of the internal market and the customs union as of 01.01.2021. If no agreement is reached between the UK and the EU in the remaining time of the transition phase, trade would in future fall under the rules of the World Trade Organization.

We at DACHSER cannot influence the political situation in the UK, but we can prepare you in the best possible way for regulated customs procedures. We have therefore adapted and updated our Brexit checklist to the current circumstances. You can download it here free of charge.

If you have any questions, please get in touch with your responsible contact person at the respective DACHSER branch