Wednesday, December 4, 2013

US Exporters Must Consult Freight Forwarding Agents and Awake to the Potential of Shipping to Africa

A Once Barely Considered Market Holds Six of the Top Ten Developing Economies
Shipping News Feature

US – AFRICA – Speak to many old time freight forwarding agents about Africa and you will notice a visible shudder of apprehension or recollection of a destination that was never the easiest market for exporters to the Dark Continent, itself a name given at a time when most of the vast lands were unknown to western explorers and, in the minds of some, still a documentary and regulatory minefield when shipping goods to any one of its vastly differing countries.

Unlike the US, the cultural differences between states proves to be an enormous gulf, making even Europe’s clear social and economic divides appear minimal, but as ever, some specialists have stepped up to learn the market over time and can single out individual countries to make the most of a fast developing set of target destinations. Development is the key word in this equation, home to six of the top ten fastest growing global economies, those prepared to specialise can reap rich rewards by knowing what to ship and where.

Los Angeles based American Export Lines (AEL) has a particular interest in the progress made in countries such as Nigeria, pointing out that the first thing the modern, growing economy requires are the items that cannot be produced immediately, if ever, yet are either essential to fuel the customers own manufacturing and construction ability, such as heavy machinery, or to pander to the requirements of a population rapidly being enriched and seeking the trappings of new found prosperity.

California is of course the place when it comes to acquiring first quality, well preserved, used vehicles, with a warm, low humidity climate that defers the normal deterioration suffered elsewhere, and, with top of the range vehicles very much in demand in some African destinations were thus one of the first types of enquiry which AEL found being made as development got underway. The company, as with so many in California, already had experience with the export of cars and trucks but has found that, over the past decade, the scope of trade goods demanded has grown with the market, as AEL Marketing Director Kasra Ferasat explains:

"Our relationship with Africa began fifteen years ago and, as is often the way, was customer driven rather than strategic. We had already established a reputation in the transport of automobiles and auto parts as well as personal effects. We had a customer wishing to ship cars to West Africa so we embarked on a learning process so we could fulfil their needs. We developed contacts and learned the most efficient ways of dealing with Customs and the many other regulations and demands in this market.

"The key is customer care. A lot of our customers are individuals or SME companies and we assign one representative to them personally for each shipment from start to finish. Our customers do not always understand African customs and procedures, so we spend a lot of time explaining to them, providing solutions and anticipating any problems.

"For our auto trade we have our own warehouse and our customer service representatives go to inspect the cargo and ensure everything is perfect. We provide a true end-to-end service. For Africa around 70% are individual customers and 30% commercial customers. Dealing with Africa you are going to have frustrations, but the rewards can be significant. Just remember TIA (This is Africa), be patient, remain diligent and work with trusted agent partners." 

AEL has found that with the passage of time new markets in Eastern Africa have opened up for them, shipping a wider range of commodities including used shoes and clothing plus food and consumables, as well as speciality auto related goods. In June 2012 President Obama announced a new initiative, ‘Doing Business in Africa’ to help educate potential exporters to the diverse regions which the continent holds.

This programme, launched in the light of the huge inroads being made by other nations, particularly the Chinese, has three primary aims, educating US businesses about the opportunities, making it easier for American companies to use their government’s resources to help them gain a foothold in the African market, and shifting the country’s perception of doing business in Africa to motivate an enduring US economic presence on the continent.

The campaign, spearheaded by the Department of Commerce, entails broad collaboration across government with the US Department of State, Export-Import (Ex-Im) Bank, the US Trade and Development Agency (USTDA), the Overseas Private Investment Corporation (OPIC), as well as other interagency parties with the guidance of the Trade Promotion Coordinating Committee (TPCC), and the campaign aims to attract significantly more American companies to explore sub-Saharan Africa’s trade and investment opportunities.