Africa holds new promise for U.S. shippers, says study

Rates of logistics outsourcing to specialist contract logistics service providers are at some the lowest levels in the world, but the market is evolving and the region includes many countries with highly varying characteristics

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Analytiqa, a consultancy and research firm based in Hertforshire, England, has published a study that suggests greater opportunities for U.S. shippers seeking to penetrate the vast African marketplace.

According to the whitepaper, “Africa Logistics,” third party logistics providers must “keep cool” to maximize growth in the arena of temperature-controlled shipments.

“While we forecast significant growth in logistics spend across on the African continent, further development of infrastructure in many countries is essential,” says Analytiqa Research Director, Mark O’Bornick.  “If current plans to invest in infrastructure are realized, demand for logistics services will boom based on meeting rising consumer demands.”

Researchers forecast that spending on logistics services by manufacturers and retailers, both in-house and outsourced, is set to increase by almost $28.8 billion by 2016 as the size of the outsourced logistics market grows by 38.4%.

“U.S. and other global 3PLs are set to take advantage of new growth opportunities in the African region, but they must understand new markets well and acknowledge the operational challenges that will inevitably arise,” says O’Bornick.

Rates of logistics outsourcing to specialist contract logistics service providers are at some the lowest levels in the world, but the market is evolving and the region includes many countries with highly varying characteristics.

Analytiqa’s study of eight markets across the region show that South Africa is the most developed contract logistics market, valued at around $3.0 billion, though countries which currently have smaller, less developed markets, such as Kenya Nigeria and Egypt, will post double digit growth through until 2016.

At a macro level, growth in logistics markets will be driven by the performance of individual country economies, levels of government spending, and consumer confidence within those economies.

“The changing dynamics of globalization will also feature prominently, as the many African countries are looking to their neighbors as new markets and intra-African trade is expanding rapidly,” adds O’Bornick.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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