With globalization, businesses are perpetually looking for new markets or new sources of raw materials. This subsequently dictates the access to efficient supply chains. A network of logistics centres can lead to decreased transportation costs, in comparison with direct transportation.
A logistics centre is a specific area where all the activities relating to transport, logistics and goods distribution, involving both national and international transit, are carried out on a commercial basis by various operators. This concept has become ever popular with logisticians.
In a regional context, Namibia has the potential to position itself as a logistics hub or distribution centre. We share borders with Angola, Botswana, South Africa and Zambia, we have good ports and a corridor network of road and rail that links us further to Zimbabwe, Malawi and southern DRC. Due to a favourable business environment, the time required for customs clearance is shorter and the risk of fraud is lower in Namibia than in many other African countries.
We also have a modern financial sector, which is essential for international logistics. Our geographical advantage could allow us to streamline the logistics system by shortening the lead-time for transit cargo and thus reduce the cost of international freight transport for our landlocked neighbouring countries.
Creating a network of logistics centres in Namibia would provide opportunities not only for regional distribution but also create opportunities for Namibian businesses to trade within the region. It furthermore has the ability to increase investment by attracting major international companies to locate to Namibia to take advantage of the access we could provide to a potential market of 300 million consumers in the SADC region.
For any logistics centre to be successful there has to be a market need for such facilities. In our case the regional market provides a great opportunity for Namibia to develop logistics centres where value addition could take place, both for raw material as well as finished products. Sugar, copper, cotton and tobacco exports from Zambia are some of the commodities that could be considered.
Logistics centres with facilities that focus on safe handling of these products, including repacking and value addition, would allow Namibia to create a niche service that would entice the exporters to divert volumes from their traditional routes to Namibia.
The Namibia Logistics Master Plan has identified various areas with the potential to have an efficient logistics centre of international standards. This includes Walvis Bay as the main hub for imports and exports, the Maize Triangle as well as Katima Mulilo.
In order to adhere to free market rules these planned logistics centres must be accessible to all companies involved in the activities of transport, logistics, distribution and warehousing. The centres must also be equipped with all public facilities necessary to carry out these activities.
Logistics centres should preferably be served by different modes of transport, including rail, road, sea and air, to encourage intermodal transport of goods.
A number of logistics centres has been successfully implemented internationally, whilst infrastructure at these hubs are not necessarily the same. Ultimately the location of and main area of focus would determine the kind of infrastructure and equipment required.
To ensure synergies and commercial operations these logistics centres should be managed as a single and neutral legal body, possibly through a public-private partnership, where feasible.
During the current NDP 5 period a renewed focus will be on further exploring the feasibility of logistics centres in Walvis Bay and other areas of the country. This forms part of the overall Namibia Logistics Hub Project focusing on transforming our current transport corridors into economic corridors for the benefit of Namibia and the region. Specifically, by successfully creating and implementing regional logistics centres we aim to create employment opportunities as well as business potential in all regions.
*Clive Smith is the project manager: logistics hub at the Walvis Bay Corridor Group, responsible for the Namibia Logistics Hub Project.