In Angola, finding strength in flexibility

Angola

Fred Silva, group administrator of Navilog Group, talks to The Energy Year about the advantages Angola’s local logistics companies hold over larger international players, challenges faced in the country’s shipping sector and the company’s strategy for sustaining business in a difficult market. Navilog is a provider of integrated logistics and freight services.

What is Navilog’s competitive advantage?
We provide high-quality, reliable service and professionalism with competitive costs and services. As a company, we have grown based on those standards since 2015. Our idea was that big logistics companies would have problems in Angola because their structure is not very flexible, being managed from overseas. I saw the opportunity to operate as a flexible, local agent. We have 20 employees and two offices, one in Luanda and one in Cabinda.
We have a very clean line of operation. If there is an issue, clients call me and we find the best solution for them. We communicate by phone or email, so we don’t have to go through meetings and approvals. Our flexibility is our strength because the market in Angola can be erratic and it changes very fast, especially the laws. We have new procedures from immigration, IMPA and operators every week.

When are local logistics companies more efficient than larger international players?
As we have been forced to separate freight forwarders and shipping companies, this opens an opportunity for local companies to get IMPA [Maritime and Ports Institute of Angola] authorisation for the vessels coming to operate in Angola.
It can be difficult for foreign companies to operate or talk to government institutions, especially with IMPA.
IMPA still do things the way they did 20 years ago and that can be challenging for a foreign agent to understand. Sometimes it’s easier for locals to have a conversation with an inspector or to book a visit to the boats than for a big multinational company. Our advantage as a local company is that I can go to the office myself to talk to IMPA or other public institutions.
I understand the locals as I am one too. We speak the same Portuguese language, share the same culture and live the same real-life issues.
It’s difficult to arrive from overseas with a new company and decide to do marine services here. It can be very complicated for foreigners as they don’t have the same rights, employees, perspectives or systems.

What are the major challenges in the development of Angola’s shipping sector?
One major challenge is the lack of procedures in IMPA and other institutions for companies wanting to do shipping for oil and gas clients. They have laws and procedures, but they don’t follow or apply them. For example, if you need to bring a vessel into Angola and you apply one month ahead for the entry authorisation, you may not have the authorisation even two days before your boat arrives in Angolan waters. We need to fix this documentation and timing problem.

How do shipping companies manage credit given to operators?
Over many years, the big, older oil and gas players got used to effectively being financed by their suppliers. If I as a supplier have a contract for USD 1 million, of course I’m going to give the client the request for payment every day. But even if we assign a payment within 30 days, the client will push it to 60 days and easily 90 days. However, you cannot complain too much because you might lose the client. Operators have a habit of jumping from service provider to service provider continuously.

Can you give us an overview of the group’s activity?
Navilog is our shipping company, doing vessel management, which is the bridge between the vessel owners and IMPA. We deal with IMPA entry authorisation, inspection for the vessels and obtaining licences for painting or welding, for example.
Our company SLTI [Integra Logistics and Transport Services] does local freight forwarding. We do “meet and greets” at the airport, and we handle visa requirements and cargo Customs clearance.
We do not own vehicles; I’m free to go to the market and rent. Sometimes I pay more, but this allows me to try different truck companies as long as they have the right qualifications and certifications that the client requires. I have that flexibility.

What contracts do you have right now in the oil, gas and energy sectors?
At the moment, we have three or four small ones. We work with a vessel company from Louisiana, Chouest Inn. We do the meet and greet and work visas as well as small airfreight Customs clearances services for Prezioso. We do vessel management services and IMPA entry authorisation for Petro Services. We also work for Seadrill, doing vessel entry authorisation and IMPA inspection.

What are your expectations for the 2021 licensing round?
Normally, we go to the bids when we’re invited. For example, we won’t go to bid for Total because I understand that we’re a smaller player compared to others in the market. However, we will bid with Total’s suppliers. We’re not first league yet; we operate more in the third league. If you have financial power, you can participate. Otherwise, you have to go slowly and build up. We’ll get there eventually.

How is Navilog navigating the challenging market?
Our aim is to differentiate ourselves through providing quality and reliable services. We invoice on time as much as possible and make sure that all backups are invoiced correctly so the client doesn’t have a reason to say they can’t pay. Normally clients push for credit, but that’s the name of the game in some situations. Of course for big investments, we’ll ask for a down payment, but with normal services, we have to cover it.

What are your goals for the next few years?
Despite the uncertainty caused by Covid-19, we aim to get more clients. But our strategy from the beginning has always been to have good clients. We don’t care if they are small. We service oil and gas and the general public. If you need to get your yacht out of Angola or import your car, we will do it. Our goal is to provide solutions to clients based on what they can afford.

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