The shipping line has just opened an office in Kampala, Uganda – its first in a landlocked country on the African continent. More are to follow, announced Thomas Orting Jorgensen, Senior Director Trade Management Africa, Hapag-Lloyd, in a bilateral meeting with CargoForwarder Global. This will happen successively, the executive says.
He points out that roughly 25% of all goods loaded or discharged at the Kenyan port of Mombasa come from Uganda, which has no direct access to the Indian Ocean.
The majority of Uganda’s imports and exports are transported by truck to or from two key East African ports: Mombasa in Kenya, and Dar es Salaam in Tanzania. Approximately 95% of Uganda’s cargo passes through Mombasa, while the remaining 5% is handled by Dar es Salaam. Despite the insecure situation in the entire region, road transports are not escorted by security people or special guards, nor do the trucks travel in convoys so that the drivers can protect each other in the event of attacks – though this may vary for other sensitive cargo or for other hinterland locations.
GPS trackers provide protection
At Hapag-Lloyd, they rely on a different system: “Our entire container fleet is equipped with GPS trackers. So, in the case of briberies or ambush attacks, we get the information immediately and can alert the local authorities or security forces,” says Thomas Jorgensen. “Up to now,” the Danish national knocks on wood, “this hasn’t happened, and I hope this will remain so.”
The opening of a station in Uganda is fully in line with the company’s strategic plan to continuously expand its footprint across Africa. Apart from exporting its own products, Uganda’s importance also lies in its role as a business hub for packaging and consolidating a diverse range of commodities that move throughout the region. Key exports passing through Uganda include timber logs from South Sudan, cocoa, minerals and timber from the Democratic Republic of Congo, as well as some coffee from Rwanda.
Establishing an early presence in emerging markets
These flows highlight Uganda’s growing impact on East African exports and its potential for facilitating trade across borders, states Hapag-Lloyd in a release. “Uganda plays a vital role in the export landscape of Africa and continues to see economic growth,” says Lars Sorensen, Senior Managing Director Region Middle East at Hapag-Lloyd. “Opening our office in Kampala is part of our long-term strategy to establish an early presence in emerging markets with high potential. With Kampala as our new hub, we can strengthen our position in the African market, improve service delivery, and better meet the needs of our customers both in Uganda and in neighboring regions.”
Increasing economic power
Currently, Africa accounts for 5% to 6% of Hapag-Lloyd’s global sales. “This, we aim to double in the near future,” states Thomas Jorgensen. Trade within Africa but also with Europe, the Middle East and the Far East is growing faster than the global market. Incomes are rising, so more people are becoming an active part of regional ecosystems, and the population is growing very strongly, as demographic data shows. In contrast to Europe, Africa is a young continent with increasing economic power but threatened by the impact of the climate crisis on agricultural production, and repeated political and religious unrest in parts of the continent.
Now Uganda. In which landlocked African country will Hapag-Lloyd fly its flag next? CargoForwarder Global wants to know: Zambia, Botswana, Burkina Faso or Malawi? Thomas Jorgensen remains tight lipped. He refers to a list in which the steps are outlined, but which is currently ‘for internal use’ only.
Africa is not part of the Gemini pact
Instead, he stresses that Hapag-Lloyd will call at additional ports in Africa and/or increase the liner’s shipping frequencies. The company is extremely well positioned to tackle this task. In 2021, Hapag-Lloyd acquired NileDutch, a shipping company serving mainly ports along the West African coast. The company was well established with offices in Angola, Cameroon and Congo. After the acquisition, these offices became Hapag-Lloyd offices and there are more to come in the region. Asked about the role of the upcoming Gemini cooperation between Hapag-Lloyd and Danish box carrier, Maersk, Jorgensen says that African trade lanes are not covered by the maritime pact. “We run two hubs, Tangier and Port Said, where transshipments from the intercontinental fleet to feeder vessels serving Africa take place.” However, due to the hazardous situation in the Red Sea caused by the Yemeni Houthi regime forcing Hapag-Lloyd to circumvent Africa instead of crossing the Suez Canal, only Tangier in Morocco will be used by his company and partner, Maersk, as a joint maritime hub on the African continent, he explains.
