Ghana has been an attractive investment hub for the logistics sector in recent years. Being one of the WFP logistics hubs, the West African country ensured that the delivery of vital medical and humanitarian supplies to other countries in the continent reached on time when commercial air transport is at a virtual standstill during the pandemic.
The world is undergoing the deepest recession since World War II, with the global economy expected to shrink by 5.2 percent in 2020, according to June 2020 Global Economic Prospects by the World Bank. Hence, industrial commodity exporters, such as Ghana, have to cope with weaker external demand and lower prices for oil and metals. Due to this domestic disruption, the gross domestic product (GDP) is similarly anticipated to contract in 2020. At the same time, agricultural commodity exporters are also expected to experience a collapse in economic activity.
According to the International Trade Centre and Association of Ghana, small and medium enterprises (SMEs) constitute about 85 percent of businesses in Ghana. Still, the pandemic has brought several challenges affecting their operations and business growth. To support the SMEs, Ghana Coronavirus Alleviation Programme is put in place, which illustrates the government’s backing to the industry.
Ghana has been an attractive investment hub for logistics in recent years. Last year, Agility set up a warehouse park at the Ghanaian port city of Tema, about 16 miles east of Accra. Agility is part of the Pandemic Supply Chain Network (PSCN), a coalition of United Nations Agencies including the World Health Organization (WHO), World Food Programme (WFP), United Nations Children’s Fund (UNICEF), as well as the World Economic Forum and its private sector members. The company has offered WHO free warehouse space to stockpile medical supplies in Ghana and its other centers.
In the fight against COVID-19, Swissport is chosen as the cargo handler at both the UN hubs in Liège Airport, Belgium, and Kotoka International Airport, Accra, for moving medical supplies across the world. Chris Goodsir, country manager, Swissport Ghana, explains, “During these times of crisis, it is imperative that the handling of the cargo continues, as this brings the necessary aid to the various countries in need. Swissport Ghana was extremely privileged to assist the WFP in their recent activities and provided the necessary support to them in Ghana. At this stage, we will continue to assist the WFP in their operations and are fully available for any further operations from the government as and when needed.”
In 2019, the combined throughput of volume for Swissport Ghana and Air Ghana Perishable Centre (AGPC) was 36,000 tonnes. In Q1, the company only managed to handle 7,600 tonnes, far below the expected volumes for 2020. This is directly correlated to the drop in volumes due to COVID-19, but it still believes in seeing healthy signs of recovery.
In May, DHL Global Forwarding transported personal protective equipment (PPE) shipment as part of its dedicated 100 tonnes weekly air freight solution from China to Ghana via Dubai using UbuntuConnect, a specific air freight solution for the China-Africa lane. From Accra, the shipment is distributed across the country to equip front-line healthcare workers. Till now, DHL has transported two shipments to Ghana and expects more in the coming months.
“Over more than three months, we consolidated cargo across China and shipped them to several countries across the Middle East and Africa, including Ghana, within a span of two to three days,” says Serigne Ndanck Mbaye, DHL Global Forwarding.
The service was launched in response: to the lack of air freight capacity into the MEA region as several commercial passenger flights were grounded; and the demand for China’s PPE and essential goods. As parts of the area move into different phases in their response toward the COVID-19 outbreak in their respective countries, we are customizing our forwarding solutions accordingly. With the situation stabilizing and regular schedules coming back, we have now begun moving cargo via our commercial freight airline partners and expect more flights carrying various imported goods to the country in the coming weeks.”
Ensuring the continuity of supply to the continent, Bollore Logistics has started a particular weekly cargo freight service between Europe and West Africa, the WARA AIR SERVICE. Every week, freight is transported via two or three all-cargo flights from Bollore Logistics’ airport hubs in Liege and Roissy Charles-de-Gaulle, France. They cater to several destinations in the continent, including Accra. The WARA AIR SERVICE is fully connected to the Bollore Logistics’ global network and fed by similar charter programs from Asia and North America, thus providing integrated, end-to-end solutions.
The movement restriction has started to offer an opportunity for the continent to move away from traditional ways of trading and leveraging on innovative solutions to promote trade. Goodsir notes, “For the first time in our history in Ghana, we have had to manage the interaction with our shareholders and our clients, without the face-to-face interaction that we usually rely on. We have managed this by investing in the systems at our disposal. We have dedicated systems in place to monitor our daily performance on any device, and with a click of a button, we can see where we stand with the volumes and adjust our staffing levels accordingly. This is ideal in managing the costs vs. the volumes on a daily or weekly basis. This has proven invaluable over the last three months, with clear benefits.”
One of the key focus areas in Deutsche Post DHL Group’s growth plan over the next five years is digitalization – ‘Strategy 2025 – Delivering Excellence in the Digital World’. “Equally, we made investments into hiring local experts, and strengthening our network in Africa will come a long way in ensuring that we can continue delivering excellence to our customers. As part of our strategy, we have recently launched myDHLi, a fully integrated online platform for freight forwarding customers, to access online services for full shipment visibility and control on one platform,” Mbaye observes.
Last year, Saloodo!, a digital road freight solution platform by DHL, to provide transparency, real-time visibility, and efficiency to the regional road network was launched. “Saloodo! was rolled out during COVID-19 into all the African markets, as well as in KSA, Bahrain, and the rest of the Gulf countries. We also successfully implemented our new Global Transport Management System (CargoWise One) across air, ocean and road freight in all West African countries, including Morocco, Zimbabwe, Egypt, and Kenya to provide customers with end-to-end shipment visibility,” Mbaye adds.
E-commerce is one of the most essential and fastest-growing market sectors in Africa. A report published by the McKinsey Global Institute estimates that Africa’s online retail market in 2020 will potentially reach $75 billion by 2025.
In 2019, DHL Express sub-Saharan Africa announced the launch of an innovative mobile platform, DHL Mobile, that would allow its customers in Sub Saharan Africa to track and coordinate the delivery of their shipments with greater ease and convenience. Currently, Ghana is one of the top three countries with the highest users. Morgan Uloko, country manager of DHL Express Ghana, states, “The app has proven to be an exciting new addition to our service offering in Ghana as it offers several key benefits to customers, allowing them to access valuable features on the move. Our customers have adapted to digitalization, and we are excited to introduce this mobile application to our customers across the region. We are constantly working towards providing cutting-edge solutions that help to connect our consumers and business owners with the global market.”
Recently, DHL Express has picked up a minority stake in Link Commerce, a UK-based e-commerce firm that helped the logistics company develop its DHL Africa eShop platform.
By the end of March, when the borders of Ghana closed, leading to the cancellation of all passenger flights, which accounted for about 37 percent of the airlines’ cargo capacity, Swissport’s business was affected. “With further restrictions regarding the stay of aircraft crews in Ghana, the airlines’ capacity was reduced to 55 percent before COVID-19. We had to take strict measures and tough decisions to protect the business and reduce costs. In April, our total tonnage was down 36 percent compared to the previous year. In May, we saw an increase in charter aircraft, reducing the gap to 19 percent compared to 2019.
“With the continued increase in charter flights and the return of some cargo operators who had stopped operating, we see a further increase in volume”, says Chris Goodsir, Swissport Ghana.
We believe that even though, according to IATA, the industry will not see pre-crisis passenger traffic until 2023, freight volumes will start to grow again earlier and at a faster rate,” Goodsir states.
He says that the company has learned a lot about managing cost structure and the benefits of working remotely. “With the support of Ghana Airport Cargo Centre (GACC), Swissport Ghana has now secured a full ground handling license. This allows us to enter the ground handling business and provide the same level of quality to passenger airlines that we are known for with our cargo clients. Doing so indicates the commitment of Swissport and GACC in Ghana and the belief that this is an emerging market for our business, even after the impact of COVID-19.”
Laboratory capacity in most African countries is equally bereft of modern facilities, and the starting point should be investments in digital health tools, writes Babatunde Omilola, manager for public health, security and nutrition division at the African Development Bank Group (AfDB) in a release.
To support Ghana during this pandemic, Zipline drones commenced the delivery of Covid-19 test samples collected from patients in more than 1,000 health facilities located in the rural areas of Ghana to Noguchi Memorial Institute for Medical Research laboratories in Accra. The service began on April 17, when 51 COVID-19 test samples were transported to Zipline’s distribution center in Omenako, Ghana. Zipline is also delivering samples from another distribution center in Ghana to the Kumasi Centre for Collaborative Research. Even it is providing masks and other personal protective gear, as well as medicine and blood, to medical facilities in Ghana during the coronavirus outbreak.
Swissport’s AGPC is a dedicated facility for the handling of perishable export cargo. With a 165 square meters fridge facility, the temperature can be maintained such that the product remains fresh until it is time to be loaded onto the aircraft. Goodsir concludes, “Having the right facility to handle this type of cargo is essential for the export market of Ghana, as perishables equate to 90 percent of our total export volumes, which directly contributes to the Ghanaian economy.”
COVID-19 is an opportunity for the continent to take more concrete steps towards realizing the African Continental Free Trade Area (AfCFTA). It should do so by focusing on increasing local production capacity, investing in new technological developments, harmonizing trade regulations, customs controls, and reducing both tariff and non-tariff barriers.
Information from Logistics Update Africa.