Connect and conquer: Boosting logistics is central to long-term sector improvement

The development of the logistics sector is the final step in the government’s 10-year plan to develop Morocco’s transport sector. Morocco has invested heavily in transport infrastructure since 2003, and it is now poised to reap the benefits from expanded airport and maritime infrastructure, a more comprehensive highway network and increased rail capacity. Authorities are now turning to the development of the national logistics network in order to maximise the potential of this infrastructure, encourage private investment and establish Morocco as a regional centre for trade and transport. Public and private authorities agreed in 2010 on a National Strategy for the Development of Logistics Competitiveness, which aims to build a nationwide network of integrated logistics platforms, streamline the flow of goods and strengthen logistics providers.

ECONOMIC IMPACT: The logistics sector has considerable potential to boost the value added of manufacturing, mineral processing, agriculture and other key industries. However, the sector is at a relatively low level of development, both in terms of infrastructure and the quality of many transport firms. The prevalence of informal road transporters and an insufficient number of logistics platforms means that domestic transport costs remain high. Currently, logistics costs as a percentage of GDP hover around 20% in Morocco, which is closer to the sub-Saharan average of 20-25% than to the 15-17% average seen in emerging countries such as Mexico, Brazil and China, according to the National Federation of Road Transport. Within the first five years of the national logistics development plan, the government aims to reduce logistics costs to 15% of GDP.

The state plans to establish 70 logistics platforms grouped into 18 integrated logistics zones in key production and consumption zones nationwide. The Ministry of Equipment and Transport aims to launch work on half of these zones by 2015, on a total of 2080 ha of land to be mobilised by the state. By 2030, logistics platforms are expected to occupy a total of 3300 ha. Each logistics platform will be dedicated to one of five activities: distribution and subcontracting, containers, agricultural and agro-industry products, construction materials and grain platforms. Each of the 18 logistics zones will include a combination of these platforms, corresponding to local activity. “The national logistics plan has helped to professionalise ground transport and expand stocking capacity, but full implementation of the plan has been slow so far,” Mohamed Abdeljalil, the CEO of Marsa Maroc, told OBG.

The five different types of logistics platforms were selected in order to have the maximum economic impact. Morocco is heavily dependent on imports of wheat and other cereals. The installation of 13 cereals platforms is expected to increase national storage capacity by 15m tonnes, allowing the country to better ensure wheat stocks. It will also permit wheat to be stocked near consumption and milling zones, as opposed to their storage at port facilities.

DOMESTIC DISTRIBUTION: The domestic distribution channels process 20m-25m tonnes of goods per year, and therefore the cost of the flow of goods has an important impact on purchasing power. The system is not yet optimised, as it entails heavy truck traffic through urban areas and lacks sufficient intermediary stockage areas.

The development plan will introduce 720 ha of distribution platforms to streamline this process. In addition, 17 platforms dedicated to construction materials will be developed in order to increase the volume and decrease the cost of the flow of goods to construction sites across the country. The plan provides for the creation of 540 ha of construction materials platforms by 2015, to be extended to 780 ha by 2030.

The country’s agricultural production, diverse and highly fragmented, demands a higher level of logistics services than currently available. The collection of domestic production is complicated by the fact that 70% of farms are smaller than 5 ha. The sector has considerable needs for refrigerated transport, speedy market access in commercialisation periods and sufficient storage facilities near consumption zones. In order to meet these needs, the national plan aims to build 14 platforms for the distribution and commercialisation of fresh produce, ultimately to cover 725 ha. The Ministry of Equipment and Transport estimates that once the logistics zones are in place, they will accelerate GDP growth by 0.5% per year over the next 10 years, which corresponds to a direct value of Dh20bn (€1.78bn). Implementation of the plan will require a total investment of Dh60bn (€5.33bn), most of which is expected to come from the private sector, and is meant to help create 36,000 jobs by 2015.

SECTOR ACTORS: Firms such as DHL, Chronopost, Aramex and Fedex, in particular, dominate international courier services. Moroccan firm Société Nationale du Transport et de Logistique (SNTL) is also established in the sector and is the market leader for the volume of goods transported domestically. SNTL is also in the process of building its relationships with partner countries, strengthening Morocco’s role as a logistics provider.

Domestically, growth in the trade and logistics sectors has begun to attract a handful of new operations. Geodis, the logistics subsidiary of French railway company Société Nationale des Chemins de Fer and a major provider of logistics services in Europe, launched a new platform in the Ain Sebaa area outside of Casablanca in September 2012. The platform, spanning 16,000 sq metres with an 18,000-pallet capacity, is expected to create 150 jobs and provide a variety of distribution, storage and packing services. In addition, the Swiss logistics group Kuehne & Nagel established operations outside of Casablanca in May 2012, with plans to enter into the niche of global and multi-modal logistics linking ground, maritime and air freight. The company’s Moroccan subsidiary is its 14th operation on the continent, but its first in North Africa.

FIRST STEPS: To guide the implementation of the national logistics strategy, a 2010-15 contract programme was signed by the state and members of the private sector. The national plan gives particular priority to logistics zones in the greater Casablanca region, the country’s economic hub, which contains the primary airport and the second-largest port, in terms of container traffic. The region is set to receive 978 ha of logistics platforms under the national programme. The first two zones, in surrounding areas of Zenata and Mita, are already in the early stages of operation.

In April 2012 work was launched on a coastal road to connect Casablanca to the logistics zone in Zenata, a new residential and industrial currently under development. The Zenata logistics zone is the largest proposed under the national plan, with 323 ha dedicated to containers, wheat, and distribution and logistical sub-contracting activities. The ministry also begun constructing the Mita logistics platform in 2012, which will be managed by the ONCF.

Phase I will cover 32 ha for distribution and subcontracting activities. So far, implementation has entailed public and private investment of Dh2.4bn (€213.36m), including the cost of road construction between Casablanca and Zenata (Dh700m, or €62.23m), the acquisition of land for the Zenata zone (Dh864m, or €76.81m) and the completion of the SNTL platform in Zenata (Dh533m, or €47.38m). The completion of the ONCF’s platform in Mita rounds out the investment with a cost of Dh350m (€31.12m), including construction of an inland port for railway container traffic.

CONSTRAINTS: Given the volume of actors involved in the logistics sector and the dispersion of planned sites, implementation of the national logistics programme will be difficult. The state provided for the creation of the Moroccan Agency for the Development of Logistics, which will be responsible for mobilising the land resources and coordinating with local authorities to ensure the programme’s implementation. However, in the short term, the relatively high cost of port processing and of land acquisition for the installation of logistics platforms, especially in Casablanca, Agadir, Meknès and Nador, will remain an obstacle for smaller operators. Established foreign operators and domestic firms are better positioned to take advantage of new opportunities. The sector continues to attract investment from global logistics firms, and a policy to construct over 35 logistics platforms by 2015 represents a solid step.