Experts chart path to rail transport, haulage growth
Experts in the haulage and logistic business have stressed the need for operators within the sector to collaborate with government and financial institutions as part of efforts to improve the industry.
According to them, the collaboration would help the sector to focus on achieving business results, aligning authority, information and decision making thereby creating higher value for its clients.
They revealed that rail haulage has enjoyed stronger growth than road transportation in the last five years, albeit road remains the dominant mode of haulage accounting for as much as 90 per cent of freight in the industry.
Speaking at the 2017 edition of Haulage and Logistics Magazine Annual Conference & Exhibition (HAULMACE) in Lagos, Managing Director and Chief Executive Officer of Transport Services Limited, Deji Wright, said in terms of tonnage, road haulage grew on average by four per cent between 2013 and 2015 but declined by three per cent in 2016 due to economic recession.
Wright said growth in rail haulage has been driven by increased investment in rail infrastructure in the country.
According to him, transport industry stood at N809 billion in 2016 and grew only by 0.4 per cent. However, he said stronger growth is expected in 2017 as H1 2017 gross domestic product (GDP) grew by two per cent over the same period in 2016.
He said the haulage industry in Nigeria is mostly informal hence many of the players have limited structure and are unregistered, stating that in terms of fleet size, it is estimated that the top six companies logistics companies control more than 10,000 trucks.
He listed some of the challenges faced by the haulage industry to include, high cost of financing, supply chain disruption, high cost of doing business, inconsistent government regulations among others.
According to him, the ongoing economic rejuvenation and diversification by the Federal Government will drive growth in the industry, stating that investment in infrastructure repairs and upgrade will positively impact trade and haulage sector.
“Anticipated economic growth will have a positive impact on trade volumes and the haulage business in Nigeria; Macro and micro-economic trends will significantly transform the industry over the next five years,” Wright said.
Executive Director, Operations Doreo Partners Limited, Appolo Goma, said the downturn in the Nigerian economy since the 80s poses a lot of challenges to her haulage industry. This has led to sharp decline in the volume of imported freights, manufacturing companies shutting down, among others.
Managing Director, MRS Oil Nigeria Plc, Andrew Gbodume, said its experience in managing haulage engagement over the years has been a very turbulent one.
He said it was an experience that put its logistic team on its toes because of the issues they have to contend with which are not new to operators.
“We see the challenges in the haulage segment of our supply chain as the weakest link in the chain that needs to be strengthened for optimal performance,” Gbodume said.
In his remarks, Convener, Haulmace, Alfred Okugbeni, said the conference is an annual event aimed at solving issues and providing solutions to challenges faced by operators in the industry.
Okugbeni noted that the haulage business has evolved with emerging trends over the years hence the need for operators to understand the innovation thereby collaborates to ensure development.
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