Airfreight is a huge part of Africa’s growth narrative
19 April 2018
Facilitating the fast movement of airfreight is at the heart of the work being done by the teams at Durban’s Dube Cargo Terminal. The airfreight that is processed through facilities like these in every airport around the world is critical to opening new trade flows, linking local markets to international supply chains that deliver goods and economic prosperity.
“The backbone of South Africa’s economy relies heavily on transport for the movement of our imports and exports,” says Hamish Erskine, CEO of Dube TradePort Corporation, who has been working since 2003 on the project to deliver a globally competitive manufacturing and air logistics platform in Southern Africa.
“By investing in transport infrastructure, South Africa is creating efficiencies in its logistics and supply chains, which improve the overall competitiveness of doing business within our borders.”
King Shaka International Airport and its 3.7-kilometre runway are at the heart of the expansive Dube TradePort development, which stretches over a landmass that exceeds 3,000 hectares, and is earmarked for the development of manufacturing facilities and other support services that will be rolled out in phases over the next 50 years.
The International Air Transport Association (IATA) forecasts a stronger economic growth in African region that is expected to support a growth in demand of 8.0% in 2018 in the airline industry. Last year African carriers' posted the fastest growth in year-on-year freight volumes, which were up 15.6% in December with a capacity increase of 7.9%. This contributed to an annual growth in freight demand of 24.8% in 2017 – the fastest growth rate of all regions. This is only the second time African airlines have topped the global demand growth chart since 1990.
Given this outlook and the recent performance of airlines, the continent needs to capitalize on the promise this year holds for growth in the airfreight sector, which traditionally has seen growth remaining low as a result of a variety of factors that have adversely affected the air cargo market.
Given Durban’s position, Dube Cargo Terminal is however already looking ahead and catering to the future airfreight demand with its 100,000 ton per annum capacity from its catchment area in KwaZulu-Natal; which has seen it achieve an almost 14% growth in cargo throughput last quarter. Dube Cargo Terminal’s staple commodities are automotive goods, fashion items, Ship spares, electronics, pharmaceutical products as well as various components for machinery.
New trade policies in Africa are also set to address the challenge posed by small and fragmented markets by promoting intra-African trade, which will strengthen regional cooperation, opening new markets with over 1 billion people and a combined GDP of $2.6 trillion. Airfreight will be one of the means by which those 1 billion will be able to receive their goods, as air connectivity creates quick and efficient corridors between countries.
“New international and regional air routes open up new opportunities across a full spectrum of sectors including tourism and leisure, business and commercial, and cargo and manufacturing,” Erskine says
Having been designated a Special Economic Zone, Dube TradePort is poised to open new opportunities for manufacturers to get their products into new markets in the rest of the continent. Located within the city of Durban which has traditionally been a hub for processing and value adding of chemicals and petrochemicals, food and beverage as well as agricultural products, this has ensured that the area has developed to have the right infrastructure, trained talent, packaging and logistics solutions to handle highly sensitive goods, like pharmaceuticals. In addition to this, the port of Durban is the largest and busiest in Southern Africa, meaning there are already established routes into the rest of the subcontinent from the city, making it an ideal post to serve the continent through highly efficient airfreight.
Upon completion, Dube TradePort will be a fully fledged airfreight and passenger hub surrounded by industrial and agricultural developments - the continent’s only precinct combining an international airport, a dedicated cargo terminal, warehousing, agriculture, as well as commercial office and retail real-estate. The ultimate aim is to develop Durban into a major logistics gateway with seamless connecting road, rail, air and sea into a platform to efficiently serve the rest of the African subcontinent.