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Overcoming Africa’s logistics challenges: Dachser South Africa's approach to customs 

Trade is the lifeblood of any economy, and the smooth operation of customs and trade procedures is critical. However, logistics companies moving goods across the African continent face a unique set of challenges. These include inadequate road and rail networks, poor infrastructure, excessive official and unofficial roadblocks, significant border delays and complex customs and excise. A lack of coordination among multiple government agencies often results in inefficiencies and bottlenecks that hinder the smooth flow of goods across borders.

The establishment of a single market has introduced new distribution systems for customs and excise revenue, which has necessitated adjustments from logistics companies. The secretariat of the African Continental Free Trade Area (AfCFTA) agreement launched an interim trading arrangement with eight qualifying countries (Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia) to test the agreement’s provisions while negotiations are ongoing. Although trading under the AfCFTA started in January 2021, commercially significant trade has yet to happen, primarily due to the delayed Phase 1 negotiations on trade in goods and services such as the negotiations on Rules of Origin (RoO).

Regional integration arrangements further complicate matters. For example, the coexistence of the Southern African Customs Union (SACU) and the Common Market for Eastern and Southern Africa (COMESA) poses specific challenges. Intensive documentation requirements, samples for laboratory analysis, complex tariff classification, and valuation delays are some other hurdles that affect trade facilitation.

In this challenging environment, logistics companies play a pivotal role. DACHSER South Africa has been successfully navigating these complexities for over forty years, providing comprehensive logistics and customs management solutions that ensure the smooth movement of goods.  “Our commitment is to provide our clients with a holistic and seamless solution and we see ourselves as an extension of their businesses.  This means that we take care of all aspects of the transportation, including customs, storing, handling and the safe delivery of goods from origin to destination.” 

To deal with customs challenges, DACHSER focuses on compliance, transparency, and adaptability, says DACHSER Managing Director Detlev Duve. "Compliance with local and international customs regulations is essential, requiring a detailed understanding of these laws and regulations. Transparency in operations helps build trust with authorities and clients, while adaptability allows logistics companies to adjust to changing regulations and market conditions."

In order to avoid significant time delays and unforeseen cost implications, Duve says it’s vital that companies involved in international trade understand and comply with changing regulations and requirements. However, getting to grips with regulatory environments be challenging for companies and divert resources away from core business priorities, making a trusted logistics partner an essential part of doing business.

Duve says DACHSER's teams are well-versed in customs regulations and procedures. “We ensure compliance with customs requirements, including correct classification and documentation, which can save customers considerable time. Understanding Incoterms and maintaining a good working relationship with local customs authorities are key components of our approach. We further consider where costs can be saved or passage expedited. For example, certain processes could entitle an importer or exporter to claim back a percentage of duties paid to customs.” 

Customs developments have also created some opportunities for logistics companies and clients to streamline their operations.  For example, in South Africa, the government has introduced measures such as accredited client statuses for those registered for customs and excise activities.

Global logistics operations like DACHSER are also able to fully leverage technology to improve their customs handling processes. “Our digital tools assist in accurately calculating duties, tracking shipments, and ensuring documentation is correctly filed, reducing the risk of errors and delays,” says Duve.

DACHSER South Africa also offers value-added solutions for clients such as bonded storage, which allows cargo to be stored for up to two years, improving cash flow for importers. The company further provides an option for clients when a portion of imported goods will be directly exported, sparing them from having to pay duty and VAT twice. “If the client does not need to clear the entire shipment, DACHSER South Africa will clear the goods directly into our bond store and no duty or VAT will be paid until the cargo is moved out,” Duve explains. “If a portion of the stock needed to go to an African country, we would move this out with a bonded truck to that country, where the cargo would be cleared.” 

While the customs landscape in South Africa and Africa presents formidable challenges, logistics companies like DACHSER South Africa have found ways to navigate these complexities and deliver excellent service to their customers. Now more than ever, the value derived from using an experienced logistics provider in Africa can lead to significant cost savings.

For a sustainable society: More and more NGOs are taking action around the world

In the course of globalization, internationally networked non-governmental organizations or NGOs are playing an increasingly important role. DACHSER’s partnership with children’s aid organization terre des hommes demonstrates how a company can support an NGO over the long term.

Environmental protection, human rights, joint development projects, migration, anti‑discrimination: the importance of non-governmental organizations, or NGOs, for society is great. Independent of states and governments, they advocate for social, socio-political, or environmental issues. The coronavirus crisis is making the work of NGOs more urgent, as humanitarian aid in developing countries is now more important than ever. This is a challenge for many such organizations, as their work is often hampered by travel bans as well as difficult working conditions and hygiene measures on site. In addition, many of those who donate are less willing to do so in times of crisis. Yet this is exactly what NGOs depend on, because in addition to membership fees, donations are their main source of financing. Transparency with regard to an organization’s cash flow and what it achieves with those funds is now all the more critical for strengthening donor confidence. Many NGOs inform their donors regularly via press releases, newsletters, or on their website about individual projects and the use of funds. NGOs are also monitored by auditing companies and the relevant tax authorities to ensure that they are using donations correctly. A “donation seal” from the German Central Institute for Social Issues (DZI), headquartered in Berlin, helps engender even greater trust on the part of the donors. The seal guarantees that the respective NGO is trustworthy and that the work they do is respectable.

DACHSER supports terre des hommes

According to estimates, there are currently tens of thousands of NGOs worldwide, providing medical care in crisis areas, looking after refugees, supporting micro-enterprises in the start-up phase, and more. One of the leading children’s aid organizations is terre des hommes. Founded in Germany in 1967, the organization protects children from slavery and exploitation, cares for the victims of war, violence, and abuse, and provides education and training for children. The German arm of terre des hommes currently supports 386 projects around the globe. International logistics provider DACHSER has been supporting the work of terre des hommes in South Asia, southern Africa, and Latin America since 2005. In keeping with the principle of “helping people to help themselves,” terre des hommes implements local aid projects to permanently improve the lives of children and the others in their villages. “As a global logistics company, we have operations around the world that bring people, markets, and manufacturing closer together. Yet not everyone is experiencing the benefits of globalization. It is our responsibility to stand up for these people and improve their living conditions,” explains Bernhard Simon, CEO at DACHSER.

By extending its contract with terre des hommes through 2025, DACHSER will be supporting the North Indian state of Bihar as well as projects in New Delhi and Uttar Pradesh. Taking a look at the latter, Ingrid Mendonca is coordinating an aid project there for terre des hommes Germany and is enthusiastic about the commitment of the locals, especially now during the coronavirus pandemic. “Not only do the youth groups support their own communities, sew masks, and procure food, but they are also getting in touch with young people in other villages, districts, even states and getting organized,” Ingrid Mendonca says. “Their commitment to improving the situation is inspiring.”

DACHSER employees also benefit from their employer’s commitment to social responsibility and can support terre des hommes projects on site. For example: Melanie Diem, Team Leader Project Management at DACHSER, coordinated a sustainability project by terre des hommes and DACHSER in Livingstone, Zambia. DACHSER Young Professionals and students from the terre des hommes network took part in the project. “The participants’ commitment to the cause was very impressive. DACHSER employees have the opportunity to immerse themselves in the work of an NGO, an area with which they might otherwise never come into contact,” Melanie Diem explains.

A special kind of commitment

The partnership between DACHSER and terre des hommes shows that together, a commercial company and an NGO can achieve amazing things. “Our collaboration with DACHSER is particularly valuable and important to us because it involves a huge personal commitment and open and honest dialogue,” says Stephan Stolze, head of the fundraising department at terre des hommes. “DACHSER’s employees and CEO Bernhard Simon in particular are deeply involved in the terre des hommes projects funded by DACHSER. They want to know how the people on the ground are doing and to what extent DACHSER’s support succeeds in helping to improve the living conditions of the local people.” In 2018, DACHSER’s commitment was recognized with the German CSR Award in the “Social Engagement” category. Partnering with an NGO makes DACHSER a pioneer, as only a few companies in Germany support internationally active NGOs. “Larger, international companies in particular should seriously consider the UN’s 17 Sustainable Development Goals and support projects in these areas for as long as they can,” Stephan Stolze says.

Avoiding customs risks with DACHSER South Africa

Customs plays a vital role in protecting society by securing transport chains by ensuring product safety and by combating cross-border crime. However, inefficient customs can be a barrier to trade and a key risk factor for companies already operating in a more challenging environment as a result of the COVID-19 pandemic. Now more than ever, the value derived from using an experienced logistics provider can lead to significant cost savings. For clients experiencing cost drainage and time delays when moving goods, it might be time to consider their holistic logistics solution carefully.  Read more

Managing Director of DACHSER South Africa, Detlev Duve, says, “Measures undertaken to address the health crisis of the COVID-19 pandemic, including stringent social distancing regulations and stricter transit requirements, have impacted the movement of goods, border procedures and customs in unprecedented ways. Customs border administrations across the regions, already overloaded, have been further stretched, with an impact on the smooth flow of logistics across the region.  The digitisation of transport and trade procedures and the harmonisation of customs regulations must be a strategic imperative during COVID-19, and beyond. However, in many countries across the African continent, we’re not there yet.”

To avoid significant time delays and unforeseen cost implications, Duve says it’s vital that companies involved in international trade understand and comply with changing regulations and requirements. However, getting to grips with regulatory environments be challenging for companies and divert resources away from core business priorities, making a trusted logistics partner an essential part of doing business.

“It has always been a priority Dachser’s teams to be up to speed on customs regulations and procedures, which includes the legal requirements necessary for moving goods into or out of South Africa - and the African continent,” says Duve.  “Our Customs team follows streamlined processes and includes specialist personnel who can analyse and assess client requirements. 

Customs compliance

DACHSER's teams can verify all paperwork for compliance and accuracy, as well as verify and understand International Commercial Terms (known as Incoterms). “Our teams must understand what our clients are importing or exporting, and the requirements around these products. They further consider where costs can be saved or passage expedited. For example, certain processes could entitle an importer or exporter to claim back a percentage of duties paid to Customs.” 

Rigorous compliance with Customs requirements includes making sure that the product is correctly classified and declared, that it is accurately valued and that the necessary documentation is on hand at the time of clearance, says Duve.  “We have a good working relationship with the local customs’ authorities and have worked closely with them as we moved through the changing regulations of the pandemic, and the transportation of essential goods.”

Many delays occur when importers provide the incorrect tariff headings, or do not have the sales agreement, proof of payment other required information to hand.   Delays can also be experienced when the importer does not have the necessary permission to import the product or cannot produce the proper permit or Letter of Authority. Duve says, “We advise our clients thoroughly on the requirements before beginning any process.  We then closely monitor our clients’ entries, and if there is a possibility of delay, we act upon it immediately through the various channels. Our teams follow these up frequently, and escalate until goods are released.”

Bonded storage to save costs

DACHSER also offers bonded storage, which enables cargo to be stored for up to 2 years.  “Bonded store allows the importer a better cash flow given that they can remove goods only as and when needed.  In doing so, the importer is only required to pay the VAT and Customs duties on those items extracted.  Additionally, the importer can also transfer ownership of the goods, making the new owner liable for any VAT and duties payable.”  Duve says that importers are also able to inspect the goods in the bond store, before paying VAT and duties, to ensure that the correct cargo was shipped and that the quality and quantity is correct. 

DACHSER offers another option to clients when a portion of imported goods are going to be directly exported. “If the client does not need to clear the entire shipment, DACHSER South Africa will clear the goods directly into our bond store and no duty or VAT will be paid until the cargo is moved out,” Duve explains. “We keep full control of the stock.  Should the client require a portion of stock to be released for local supply we clear the goods, paying the duty and VAT on behalf of the client and billing this back.  If a portion of the stock needed to go to an African country, we would move this out with a bonded truck to that country, where the cargo would be cleared.  In this way, the client is spared having to pay duty and VAT twice.”

Duve says that DACHSER South Africa continues to seek value-added solutions for their clients as they deal with the pandemic.  “Our commitment is to provide our clients with a holistic and seamless solution and we see ourselves as an extension of their businesses.  This means that we take care of all aspects of the transportation, including customs, storing, handling and the safe delivery of goods from origin to destination.”  

Latest update on DACHSER Air & Sea Logistics operations

With this update DACHSER would like to inform about the current DACHSER Air & Sea Logistics operations across the regions APAC, EMEA and Americas. In the attached document (see download below) it is listed whether a country organization of DACHSER is operational or, if only limited or not at all, why this is the case. Since the situation in the countries may change rapidly, the attached document will be updated on a regular basis and published on our website.