DHL upbeat about prospects after oil find

June 8, 2012
There is growing investment in oil and gas, information technology and retail is driving demand for express delivery services in the region/FILE

, NAIROBI, Kenya, Jun 8 – Kenya’s oil find has logistics firm DHL Express optimistic about growth in the region, as it looks to strengthen its lead position in Africa and seeks to become a one-stop shop for the energy industry in the continent.

DHL Express Chief Executive Officer for Sub-Saharan Africa Charles Brewer said the growing investment in oil and gas, information technology and retail is driving demand for express delivery services in the region.

“Because Africa is very dynamic and Kenya is a great example with this recent find, you have to be able to move that capacity whenever there’s a new find and there’s a significant amount of shipping that goes in and out of those environments,” he said.

DHL Global Forwarding recently signed a deal with South Africa’s Mining Oil and Gas Services (MOGS), a company that is seeking to expand its oilfield services air logistics hub serving West, Central and Southern African offshore oil and gas fields.

The partnership will require DHL to provide services in bonded chartering, warehousing and facility management, ocean freight, air freight, road freight, clearing and forwarding, customs brokerage, express logistics and supply base management.

However, these developments still don’t alleviate the fact that there are challenges in the region, which apart from poor infrastructure, Brewer said is the issue of customs in most of the African countries DHL operates.

“Go to any customs environment and see how long it takes to clear a shipment and you understand why we don’t export or import more. In Tanzania the de minimisis is $1.50 and anything above that will go through formal clearance that can take two to four days,” he said.

In Kenya the de minimisis is $50, while in Angola, often considered a challenging market, the de minimisis is $350.

Brewer added that it was a matter of engaging the local customs, finance offices and logistics industry to drive the de minimisis’ up in these markets to create free and easy trade environments.

De minimisis is the minimum amount of duty which customs collect; most carriers think it is more efficient to waive very small amounts of duties and taxes rather than collect them.

DHL Express recently underwent a change of the guard with outgoing Managing Director Alastair Russell.

Cassels who will be taking over the Equatorial Africa region said DHL Express is looking to expand its network further into Central and Southern Africa as well as decentralize its branch network in Kenya.

“We’re going to review our coverage of the business we have here in Kenya. I think there are some more openings for DHL to have offices in various towns around the country,” he said.

DHL operates 17 chartered aircrafts in the continent in over 50 countries in sub-Saharan Africa, with plans to open up local routes to Mozambique and the eastern part of Democratic Republic of Congo.

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