Gregory Krief of MSC Togo: “LCT terminal LCT plays a role of regulator of West African trade”

The second largest shipping company, the Mediterranean Shipping Company (MSC) is based in Geneva, Switzerland, a country as landlocked as Mali and Niger. Present in East Africa since the beginning of its activities in the 70s and in West Africa since the 90s, the group develops three of its main activities through three entities: the shipping company MSC in the transport containers and newly vehicles, the TIL group (Terminal Investment Limited) which deals with the management of port terminals worldwide – including in Africa, and Medlog, a new entity, logistic branch and armed arm of the group for go to land, rail and continuity of supply chain services needed today to customers. In this exclusive interview conducted on the sidelines of the Africa CEO Forum, MSC Togo’s Gregory Krief reviews the services offered in West Africa via the Lomé terminal.

You recently built a terminal in Lomé. How is it structured in your different areas of presence in West Africa and in the world?

Indeed, MSC has invested in the Lomé terminal via Terminal Investissement Limited. This is one of the largest regional investments in port infrastructure, with the support of donors such as the IFC (BM), the ADB, Proparco, FMO, KFW, etc … We initially developed this project with the support Togolese authorities and then in partnership with China Merchands. In operation since late 2014, the main idea was to first reduce the transit time of goods from the world to Africa. Also to have a high capacity hub from which we could rely and where we could better control the flow to the sub-region with adapted vessels (feeders) that can if necessary allow to regulate possible congestion port to destination.

The advantage of this terminal is its regional dimension and its capacity of up to 2.2 million EVP / Move. This capacity allows us to have a wide margin of absorption for any increase in regional or continental traffic. This terminal plays a role of regional regulator for the MSC. It is one of the rare terminals with a depth of nearly 16.6m allowing access of the last generations of ships of more than 360 meters long. Since this terminal, MSC can serve faster, more regularly and more easily with its fleet of feeders available final destination ports in consideration of the capabilities of each and the needs of the period (seasonality of imports and exports). From Lome, we go to Lagos and Port Harcourt (Nigeria), Cotonou in Benin, Tema and Takoradi in Ghana, Libreville in Gabon, Luanda in Angola, Abidjan and San Pedro in Ivory Coast, in Monrovia in Liberia, Freetown, Sierra Leone, etc … Depending on the season, we go back to Dakar and Casablanca depending on the types of products exported.

What are the different MSC services that pass through your terminal in Lomé?

We have three international direct services on Lomé. The Asia service, one of the most efficient in terms of time (transit time of about 30 days) and in terms of size (capacity of 10,000 to 14,000 EVP). In the sub-region, only the LCT terminal at Lomé can accommodate vessels of this size. We then have the “WestMed” service out of the Mediterranean coming from Italy, France and Spain and passing through Dakar. There is also a service from the NWC (North West Continent) called “Angola Express” from Antwerp in Belgium, Le Havre in France, Sines in Portugal and then Lomé live. There are other direct services from Europe to Ghana and Nigeria without going through Lomé because of the size of their market. Since Lomé, MSC serves the entire sub-region as explained above. All ports are now seeking to expand their reception capacity.

What is your long-term strategy in West Africa?

We are developing more and more services to enable the continent to be always better served by the whole world but also to allow the export of African products to the whole world. In addition, we actively support the development of regional / continental trade through the network from Lomé to the entire sub-region allowing the development of inter-regional volumes.

Do you feel at this moment a tremor of volumes of regional trade in West Africa?

In reality it is a necessity for community or even continental development. In Europe, this market accounts for nearly 72% of volumes processed in European ports; nearly 53% in Asia and around 13% in Africa. A large margin exists to promote these exchanges. For this, it is necessary to achieve greater harmonization and standardization of the application of regional standards. The simplification of the application of Community rules on the movement of persons and goods is a necessity. Similarly, the possibility for companies in the Free Zone to export to the sub-region as is done in other areas of the world as in Asia in Shenzhen (near Hong Kong) or in Turkey.

The themes developed on the importance of investments in infrastructure at this CEO Forum have highlighted the importance of energy and its cost to allow the sub-region to be competitive internationally but especially at the regional and continental.

For example, if a product is exported from the free zone of Togo, Benin or elsewhere to one of the other WAEMU countries, customs duties and taxes will be due on importation. This is not always the case elsewhere. In conclusion, companies produce African cocoa-based biscuit type food elsewhere in the world in a free zone to return to sell in the UEMOA zone because it is cheaper than producing it locally.

Some fresh products such as pineapple are kept for a short period of time and can therefore find a more important place in subregional trade with a development of actions to encourage operators in this direction and develop finished products manufactured locally to be sold regionally as explained in the “Doing business in Benin” sale at this 2018 CEO Forum.

MSC, thanks to its regional network, already supports this transition and African companies to better transport their products from one country to another more easily and quickly. You can now directly export products from Cameroon to Dakar, from Dakar to Benin, from Togo to Côte d’Ivoire, from Lagos to Togo etc.

In fact, are you in timing with the ZLEC that has just been signed by the African heads of state?

I do not master the subject yet. It seems that it is a good initiative to eliminate barriers to regional and continental trade if we consider the fairly large membership of the countries. There are rules to harmonize at the regional level such as the weight on the chassis on the trucks that is underway or the height of the cargo on the trucks. ECOWAS set the height at 4.5m and WAEMU at 4m. A truck leaving Nigeria complying with ECOWAS standards will no longer be able to drive in UEMOA countries like Benin and Togo to go to Ghana or Côte d’Ivoire. If the CFTA is to facilitate these harmonizations, it will surely encourage the development of trade and therefore of inter-regional transport. In addition, bringing trade rules into line with each other and standardizing tariffs and customs remain key elements for promoting regional trade.

To get back to the freight, how do you explain the distortion between the international market and the destinations Africa?

We are talking more about the law of supply and demand. The size of the market, the balance between the incoming and outgoing volumes related to the needs of importers and exporters at a given period in a given country, the level of competitiveness on a given destination, etc … There are many elements that I think contribute to setting the price of freight in any market. Customers from landlocked countries such as Niger, Burkina Faso or Mali often tell us their problem that the price of sea freight from a container coming from far away as from Asia can often prove to be much cheaper in Asia. in Africa from the port where it lands in the subregion to the final destination city in the Sahelian countries by truck.

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