Logistics and adaptation

Angola

TOGY talks to Egidio Monteiro, managing director of DHL Express Angola, about the challenges they face, how oil and gas companies can go further to reduce their logistics costs and the secret to running a successful company in Angola. DHL Express Angola established its Angolan branch in 1982, and since then has offered logistical services to both onshore and offshore hydrocarbons players from its 10 service stations.

What is the importance of Angola to DHL?
Angola is an important country overall, not just for logistics. It is a country that plays an important role in southern Africa for many reasons. Angola is a big player within the oil industry, while political stability and how it plays around the region is also very important. DHL takes advantage of Angola’s development, growth and positioning within Africa.

How can companies, oil companies in particular, reduce their logistics costs and how could DHL help?
Logistics is the base for a successful company, especially in the oil industry, if you have your logistics well organised and partner with true partners.
The main reason people have high costs in logistics is a lack of understanding of logistics. If you understand the logistics around your business, it helps you to contract the right services, to save time and money and apply processes that allow you to achieve your goals while avoiding heavy investment.
DHL has been in the market for quite a while, we work with all of the oil and gas companies, where we have been providing our services in a very sustainable way. We are not just focused on the price but also on value in line with industry demands. We partner in win-win relationships. If there is a need to advance our tariffs, our services or customer expectations, we are always ready to do so. We are ready to help the oil and gas companies.
One of the things we are planning to do with our partners is to come up with workshops, to debate on ways of making our service more flexible and more understandable. When you go to oil and gas companies today you find good professionals that do understand logistics. However, logistics is what we do on a daily basis. If you are an oil and gas company, you should be focusing on your core business and have partners like us supporting and helping you understand how you can run your logistics in an even more efficient and less costly way. When our partners need our support, we are always there to support them.

Which parts of the value chain does DHL provide services for mostly?
We work with all the players in oil and gas in Angola, directly and indirectly. DHL has evolved everywhere. We work with all their operations. While we mainly focus on express business, and we do have an express service for oil and gas, we also provide other services. We are no longer just an express company.
DHL has become the global leader for logistic services. We now have supply chain, express, freight forwarding, husbandry etc. We can provide a diversity of services. We are not just involved in the upstream, we also have operations in Customs clearance. We partner with local Customs and brokers to provide those services. We go through due diligence and we make sure we get solid, reliable and good partners. We also work very intensively with the Customs authorities to understand the process and to make sure we are doing the right thing.

How can oil and gas companies go further in terms of reducing costs or increasing efficiencies?
Double check what you have implemented so far, get key players to sit with you and ask questions, and you will be surprised at the things that you can improve. There is always room for improvement. Either you are doing the right thing but you can improve, or you can implement the right process. To do that, get together with companies like DHL, not necessarily for a service, it can just be a request. The way forward is through sitting and discussing.
I have not seen many logistics debates or workshops in Angola. This is unsatisfactory because in any business we do, if you do not have your logistics well implemented and if you spend too much time on logistics instead of focusing on your core business, you have a problem. Logistics is the base of your business. If you have good logistics, everything else will fall into place. Logistics is one of the things any oil and gas company should now go back and look at. How are they managing their logistics, where can they save costs?

How has the falling oil price affected your operations in Angola?
We have been preparing ourselves for the impact for quite a while. We have been discussing it with our customers. It is clear to all of us that volumes have been reduced quite substantially, in air freight and sea freight. There has been a huge reduction of imports, although exports are actually increasing because of the rotation of material, especially in the oil and gas industry. It is tough but you can still do business. The country is still functioning. As long as the country is there, you just have to adapt your business.

How do you deal with the forex situation?
You just have to accept it, first of all. Do not try and make other assumptions. We do have an issue, yes. Now, we need to maintain focus and adapt our concept and our business to meet these difficulties.
Of course, we work with our partners for support, we are also carefully following the news and the efforts the government is dedicating to this situation, but it is a problem and there is not much we can do about it.

What are the difficulties of running a logistic company here?
Angola’s logistic issues are not surprising compared to any country in Africa. Some countries are better than others, South Africa and Namibia are quite developed in terms of infrastructure, but Angola is not the worst if you take into consideration some West and Central African countries. There is a need for improvements, but it has come a long way. Customs, roads and airport infrastructure is far better than it used to be. I believe we can operate better than we used to.
Angolan logistics infrastructure today doesn’t compare with the infrastructure just a couple of years ago. When we started DHL here, we only had an office at the airport. The challenges we used to have delivering a good service are not the same challenges we have today. We have to admit that. I believe the government needs to do more of what they are already doing.
Companies also need to offer some support. DHL is looking at making a new investment here in Angola, building a new warehouse, bringing in new workers, creating a setup we can deliver. We cannot wait for the government to build all the infrastructure. Our companies need to be responsible and make investments too and this is what we are doing.

What is the timeline for your current warehouse build?
If everything goes well, it should be in place within the next seven or eight months. We are also waiting for the inauguration of Angola’s new airport before we can fully set up a centre there. We understand it will be next year. We keep goods on behalf of our customers but use a transfer type of modus operandi. Shipments must get in, get here and get delivered. Anything that stays with us for above what is required by law, we hand over to the authorities.

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