LATEST ECONOMIC BRIEFINGS
EMIRATES: ABU DHABI | 02.09.2010
Regulations enforcing higher capital standards in the UAE’s overcrowded insurance market have reduced the amount of insurance brokers, while slower growth in commercial business means the sector is looking to opportunities in the retail segment.
BAHRAIN | 30.08.2010
Bahrain is working hard to bolster its medical services, investing in new facilities and looking to increase the number of trained health professionals, though a rapidly growing population and an increase in lifestyle-related illnesses will continue to add to the demands placed on the nation’s health care resources.
BULGARIA | 30.08.2010
Prospective investors took note when it was announced in late July 2010 that Bulgaria’s largest steelmaker, Kremikovtzi, will be up for sale in mid-September 2010. The news comes four months after the company went into liquidation and a year after major creditors refused to approve a rescue plan for the ailing company.
EGYPT | 30.08.2010
The Egyptian Exchange 30 (EGX30), Cairo’s main stock market index, has had something of a volatile year in 2010, as it rallied through the first quarter, declined through much of the second and began to stage a moderate recovery in the third.
KUWAIT | 30.08.2010
Despite its relatively small population, Kuwait is firmly placed among the world’s most attractive and popular markets for international retail franchises. With a strong consumer and shopping culture and a young, growing and affluent population with an affinity for international brands, Kuwait offers an attractive market for leading retailers seeking to expand their footprint.
COUNTRY COVERAGE
Improving Logistics
Morocco, Volume 100
21.06.2006
21.06.2006
By seizing the opportunity to increase the efficiency of trade logistics, as highlighted by a recent World Bank study, Morocco will improve its competitiveness in the global market.
Under the title "Morocco's trade logistics and competitiveness", the study examined the strengths and weaknesses of the logistics chain in the kingdom's key economic sectors and distribution networks. It was given to the Moroccan government this week, ahead of the Logistics Forum that will gather officials, professionals, unions and analysts on June 21 in Casablanca.
The survey, the preliminary conclusions of which were disputed by transport officials a year ago, is presented as groundwork for the implementation of the World Bank's 2005-2009 co-operation strategy. Its objective is to "convert logistics into an asset to increase the competitiveness of the Moroccan economy". Indeed, with Morocco taking position as a key supplier of the EU in a number of industries, analysts have long pointed out to the need to overhaul freight operation to and from the EU, which accounts for over 60% of Morocco's international trade.
Dubbed the "Emergence" programme, the kingdom's industrial strategy aims at positioning Morocco as a key supplier of the EU in a number of value-added industries, namely electronics, automotive and aeronautics, textiles, and food processing. This strategy, based on Morocco's proximity to Europe, allows it to withstand Asian competition by offering shorter delivery times and on-demand supply. As such, the kingdom is aware it needs to boost its comparative advantage by streamlining the logistics chain and bringing freight charges down.
To help Moroccan businesses remain competitive in the global market place, the priority is to reduce the burden of logistics costs, which currently account for some 20% of GDP - a figure to be compared with 15 to 17% in large emerging economies such as China, Mexico and Brazil, and 10 to 16% in the EU.
With 98% of Morocco's international trade channelled by sea, the study underlines the need to make maritime transport more competitive. Handling costs in Casablanca - the country's largest port, with 40% of the country's freight volume - remain too high. Indeed, the survey compares handling costs for a 40-foot container, between Casablanca and a number of Mediterranean ports such as Barcelona, Genoa and Istanbul, and concludes that Morocco's main port is relatively expensive, a detail that had already been established by a previous survey on the country's merchant marine conducted by the UK's Drewry Shipping Consultants.
A number of analysts pin this cost issue on the state-owned port operator, the Office d'Exploitation des Ports (ODEP), which still enjoys a monopoly on handling operations in 15 of the country's commercial ports, including Casablanca.
While the strength of the dockers' unions has played a role in the ODEP's salary burden, the main cause of the office's difficulty to lower handling costs stems from the current organisation, with independent stevedoring companies in charge of handling operations on board, while the ODEP takes care of handling on the wharf. This gap in the chain hampers efficiency, while the lack of competition within the stevedoring corporation also increases costs.
The port reform, currently underway, aims at addressing this issue by changing the rules of the game. In line with Morocco's commitment to liberalisation, ODEP will be converted into a state-owned commercial company, the Société d'Exploitation des Ports (SODEP), while its public prerogatives will be transferred to a new body, the National Ports Agency (ANP), which will be in charge of regulation and control, as well as granting concessions and maintaining the infrastructure.
In addition, as some terminals are working under capacity, their traffic will be grouped so as to free a number of terminals that will be offered as concessions to stevedoring companies, with the aim of spurring competition between these and SODEP. The objective is to introduce competition between ports, as well as competition between terminals of the same port, with the ANP in charge of promoting fair competition by ensuring there is no collusion or dumping.
Reform is also expected to allow Moroccan ports to decrease their handling times, as containers currently remain eight days, on average, in the Casablanca port, while trailers typically have to wait one day in Tangiers to cross the Strait of Gibraltar. While EU-based freight companies have addressed this issue by creating shuttles that link Casablanca and Paris in two-and-a-half days, there are concerns that this delay will increase if Morocco applies the EU regulation that forbids international transport trucks to move during weekends.
Another issue for Morocco is the high price of maritime transport to and from its ports, which is mostly due to the weakness of its manufactured exports. With at least 30% of imported containers leaving the country empty, and Morocco off the main global shipping routes, transport costs between Casablanca and Marseille are around $500 for a 20-feet container - a figure to be compared to $310 between Tunis and Marseille.
The good news is that the new Tanger Med port is expected to relieve the logistics burden when it opens next summer. Managed by a specific agency in co-operation with high-profile international partners, this is expected to unlock the current bottleneck at the Strait of Gibraltar, offer much more competitive handling fares, and entice shipping companies to open new routes, thus pushing transport costs down and cutting down delays.
Morocco faces the challenge of reorganising its internal transport system to seamlessly integrate the new port and move ahead with the ongoing port reform. The kingdom's effort to improve its transport logistic chain is a step closer to a more competitive economy.
Under the title "Morocco's trade logistics and competitiveness", the study examined the strengths and weaknesses of the logistics chain in the kingdom's key economic sectors and distribution networks. It was given to the Moroccan government this week, ahead of the Logistics Forum that will gather officials, professionals, unions and analysts on June 21 in Casablanca.
The survey, the preliminary conclusions of which were disputed by transport officials a year ago, is presented as groundwork for the implementation of the World Bank's 2005-2009 co-operation strategy. Its objective is to "convert logistics into an asset to increase the competitiveness of the Moroccan economy". Indeed, with Morocco taking position as a key supplier of the EU in a number of industries, analysts have long pointed out to the need to overhaul freight operation to and from the EU, which accounts for over 60% of Morocco's international trade.
Dubbed the "Emergence" programme, the kingdom's industrial strategy aims at positioning Morocco as a key supplier of the EU in a number of value-added industries, namely electronics, automotive and aeronautics, textiles, and food processing. This strategy, based on Morocco's proximity to Europe, allows it to withstand Asian competition by offering shorter delivery times and on-demand supply. As such, the kingdom is aware it needs to boost its comparative advantage by streamlining the logistics chain and bringing freight charges down.
To help Moroccan businesses remain competitive in the global market place, the priority is to reduce the burden of logistics costs, which currently account for some 20% of GDP - a figure to be compared with 15 to 17% in large emerging economies such as China, Mexico and Brazil, and 10 to 16% in the EU.
With 98% of Morocco's international trade channelled by sea, the study underlines the need to make maritime transport more competitive. Handling costs in Casablanca - the country's largest port, with 40% of the country's freight volume - remain too high. Indeed, the survey compares handling costs for a 40-foot container, between Casablanca and a number of Mediterranean ports such as Barcelona, Genoa and Istanbul, and concludes that Morocco's main port is relatively expensive, a detail that had already been established by a previous survey on the country's merchant marine conducted by the UK's Drewry Shipping Consultants.
A number of analysts pin this cost issue on the state-owned port operator, the Office d'Exploitation des Ports (ODEP), which still enjoys a monopoly on handling operations in 15 of the country's commercial ports, including Casablanca.
While the strength of the dockers' unions has played a role in the ODEP's salary burden, the main cause of the office's difficulty to lower handling costs stems from the current organisation, with independent stevedoring companies in charge of handling operations on board, while the ODEP takes care of handling on the wharf. This gap in the chain hampers efficiency, while the lack of competition within the stevedoring corporation also increases costs.
The port reform, currently underway, aims at addressing this issue by changing the rules of the game. In line with Morocco's commitment to liberalisation, ODEP will be converted into a state-owned commercial company, the Société d'Exploitation des Ports (SODEP), while its public prerogatives will be transferred to a new body, the National Ports Agency (ANP), which will be in charge of regulation and control, as well as granting concessions and maintaining the infrastructure.
In addition, as some terminals are working under capacity, their traffic will be grouped so as to free a number of terminals that will be offered as concessions to stevedoring companies, with the aim of spurring competition between these and SODEP. The objective is to introduce competition between ports, as well as competition between terminals of the same port, with the ANP in charge of promoting fair competition by ensuring there is no collusion or dumping.
Reform is also expected to allow Moroccan ports to decrease their handling times, as containers currently remain eight days, on average, in the Casablanca port, while trailers typically have to wait one day in Tangiers to cross the Strait of Gibraltar. While EU-based freight companies have addressed this issue by creating shuttles that link Casablanca and Paris in two-and-a-half days, there are concerns that this delay will increase if Morocco applies the EU regulation that forbids international transport trucks to move during weekends.
Another issue for Morocco is the high price of maritime transport to and from its ports, which is mostly due to the weakness of its manufactured exports. With at least 30% of imported containers leaving the country empty, and Morocco off the main global shipping routes, transport costs between Casablanca and Marseille are around $500 for a 20-feet container - a figure to be compared to $310 between Tunis and Marseille.
The good news is that the new Tanger Med port is expected to relieve the logistics burden when it opens next summer. Managed by a specific agency in co-operation with high-profile international partners, this is expected to unlock the current bottleneck at the Strait of Gibraltar, offer much more competitive handling fares, and entice shipping companies to open new routes, thus pushing transport costs down and cutting down delays.
Morocco faces the challenge of reorganising its internal transport system to seamlessly integrate the new port and move ahead with the ongoing port reform. The kingdom's effort to improve its transport logistic chain is a step closer to a more competitive economy.
