Logistics for Competitiveness

June 11th, 2013 - How the Maghreb countries compare in the development of transport infrastructure and services.

The North African countries of Algeria, Morocco and Tunisia are making a strong bid to rival Asia as a destination for companies looking to relocate activities to lower-cost regions.

Companies including French car manufacturer Renault, cheese maker Bel Fromageries and bathroom furniture company Jacob Delafon have shifted operations to Tangiers in Morocco, for example. Textile companies such as Spain's Inditex, owner of the Zara fashion chain, and Sweden's Hennes & Mauritz, have also established manufacturing in Morocco.

“More and more companies are relocating parts of their production to the Maghreb countries in order to be more responsive to the needs of customers in Europe,” says Pascal Querro, a founder of Vincia Consulting, a supply chain specialist that opened an office in Morocco last year.

It takes under three days to ship goods from the Maghreb region to destinations in Europe while it can take more than three weeks to transport products from China by sea, he adds. This faster transit time can prove especially important for fashion brands such as Zara that need to restock their European outlets rapidly.

But transport and logistics in this North African region remain underdeveloped, Querro warns, curtailing these countries' competitiveness. Warehouse space occupied by providers of logistics services in Morocco, for example, stands at just 240,000 square meters compared to around eight million square meters in France.

Many companies in the region still prefer to manage transportation internally, Querro adds, so slowing the growth of private services and freight forwarders. Moroccan producer and distributor of dairy products, Centrale Laitiere, for example, runs its own fleet of trucks and employs some 4,000 drivers to distribute its yoghurts, milk and cheeses.

In a bid to boost trade and attract more international businesses, Morocco launched an infrastructure investment program in 2008 that included the creation of special zones for logistics operations managed by “national champions,” such as SNTL Damco Logistics, a joint venture between Danish logistics provider Damco, part of the A.P. Moller-Maersk Group, and Morocco's state-owned SNTL, Querro says. But the lack of available real estate, high real-estate prices and a culture of low transport costs continues to hamper the development of logistics services, he adds.

The investment program also favours state-owned logistics groups although that could change following protests from industry groups. “There is enormous pressure on the Moroccan government to open the logistics concessions to private as well as public operators,” says Querro.

Tunisia, meanwhile, created a national logistics council in 2009 that outlined an action plan to develop its ports and logistics services. The plan included the creation of a deep-water port at Enfidha with a logistics activity zone nearby. In total, the country has identified seven economic development and logistics zones, Querro notes, although the recent ousting of the President will likely derail the project at least in the short term.

Algeria ranks the least developed country in terms of transport and logistics in the Maghreb region, according to Querro. There are no real providers of logistics services in the country, he says, and the transport sector remains highly fragmented.

“The Maghreb region has huge potential to attract international companies,” Querro says. “But governments need to take significant steps to improve their logistics and infrastructure.”

Transport and logistics remain underdeveloped in the Maghreb region, slowing the growth of international companies there.

Key Figures
  • 20%

    More fuel-efficient for the Boeing 787 and the Airbus A350

  • 70%

    of Urbanisation is expected by 2050

  • 27

    mega-cities are expected by 2050, with at least 10 million people, compared to 1...

  • +18,4%

    of growth for E-commerce retail market in Europe in 2015

  • 82%

    of goods are moved by road

  • 1 billion

    Population in Africa

  • 60%

    of Africa’s population will be urbanized by 2050

  • 7,5%

    of growth for Indian GDP in 2014

  • 4,9%

    of growth for African GDP in 2016

  • 6,1%

    of growth for East Asian GDP in 2015, the world’s fastest-growing region

  • 19 224 teus

    transported by the MSC Oscar, the largest container ship in the world

  • 396 m

    is the size of the MSC Oscar ship

  • 120 h

    is the Non-Stop Flight Record done by Solar Impulse

  • 4,5%

    of growth in 2015 for Global Airfreight demand