Major developments in logistics

Namibia's logistics sector is performing well but developments are needed if it is to reach maximum potential.

08 March 2019 | Transport

Although Namibia's logistics sector grew by 16.1% between 2007 and 2017, major developments are needed if the country is to become a logistics hub for SADC by 2025.

According to the Namibia State of Logistics Report 2018, these developments include the completion and the commissioning of the South Port Development Project at Walvis Bay.

Others are the completion of the North Port at Walvis Bay, the SADC Gateway Development, and a significant expansion of the country's railway network.

The completion of port and rail infrastructure at Lüderitz, the commencement of manganese exports through the port and the implementation of Namibia-Botswana cross-border railway cooperation are also needed.

According to the report Namibia's logistics costs declined by 11.4% to stand at 15.6% in relation to the GDP in 2017, having peaked at 17.6% in 2016.

It says Namibia's railway network transports approximately 1.2 billion tonne-kilometres of cargo annually. The railway system moved 1.58 million tonnes of various commodities (both bulk and containerised freight) in 2017.

“Owing to limited capacity the existing railway system can only manage to haul 15 to 20% of the total freight market.”

However, with improvements in volumes it could almost double within the next five years to 3 million tonnes, representing one third of the national freight traffic volumes, says the report.

That would require significantly increasing the percentage share of cargo for which rail has a distinct advantage, such as liquid bulk, dry bulk, containers, construction material and project cargo.

Secondly, capacity should be increased to absorb more traffic generated from seaports, cross-border traffic, mines, agricultural and manufacturing centres on the five TransNamib corridors.

“Thirdly, there is no trans-loading near the border (with South Africa). Only crew interchange takes place at the border crossing and the process takes maximum one hour. There is potential to link with other networks such as Botswana, Zambia, Angola, DR Congo and Zimbabwe.”

The Port of Walvis Bay, the main commercial port in Namibia, handled 93.1% of the total cargo transiting to and from neighbouring countries in 2017.

Zambia, Angola, the Democratic of Congo (DRC), Botswana and Zimbabwe are the main markets for transit by volume.

Zambia is the dominant market for transit cargo among these countries, accounting for 51.8% of all inbound transit cargo through the port in 2017, up from 47.9% in 2016.

Zambian exports, comprising mostly copper and wooden products, accounted for 85.7% of total outbound transit cargo by volume, up from 72.5% in 2016.

However, the report says there is slower growth and in most cases negative growth in the contribution of other countries' volume of imports and exports transiting through the port.

Surprisingly, volumes transported to and from Botswana are quite low. However, the situation could improve significantly following reports that Botswana Railways intends to establish dry ports to facilitate import and export activities within the SADC region.

Transit volumes to and from South Africa are also quite low. “However, given that South Africa has a number of seaports, this is not very surprising.”

The same rationale applies to Angola. Cargo flows to and from other countries, notably Congo (Brazzaville), Malawi, Tanzania, and Mozambique, are also generally quite low, and can thus be considered as “random flows”.

“The trade link to Zambia seems to be stable and in terms of volumes currently the most important one for Walvis Bay. Measures should be taken to secure and improve this level,” says the report.

The report says the capacity of the Port of Walvis Bay is expected to increase as a result of ongoing projects. Thus, greater attention is required in managing international logistics sustainably to ensure that Namibia could become a logistics hub for the SADC region by 2025.

Road freight accounted for more than 80% of goods transported in Namibia, including transit cargo. Of the three corridors connecting Walvis Bay with countries in SADC, the Walvis Bay-Ndola- Lubumbashi-Development Corridor is the busiest, followed by the Trans-Cunene and Trans-Kalahari corridors.


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