As the Moroccan transport sector has taken off in recent years, the government has embarked on an ambitious plan to cut costs and improve the sector, expanding port capacity, creating logistical zones and improving domestic distribution infrastructure, including Customs systems, multimodal connections and dry ports.
Emphasis On Costs & Time
In 2010 the country launched the National Strategy for the Development of Logistics Competitiveness, a plan seeking to reduce logistics costs from 20% of the kingdom’s GDP to 15% in the medium term and ensure the sector contributes 0.5% to GDP annually, the equivalent of around Dh20bn (€1.8bn).
According to the World Bank’s “Doing Business 2016” report, border compliance while performing an export cost $247, and documentary compliance incurred costs of $107, for a combined total of $354. The cost is an improvement from 2015, when the average cost to export a container was $595, and is far lower than the MENA average of $445 for border compliance and $351 for documentary compliance in 2016.
In terms of imports, border compliance while performing an import cost $746, and documentary compliance cost $116 for a total of $862, a decrease from $970 in 2015. The MENA region’s average import costs were $594 for border compliance and $385 for documentary compliance in 2016. Despite Morocco’s considerable improvements, the gap between export and import costs remains a serious impediment to growth.
As a result, the government has poured significant amounts of capital and resources into the sector. Since 1998, combined investment in transport and logistics infrastructure has multiplied six-fold, according to recent statistics from the Moroccan Agency for Logistics Development (Agence Marocaine du Développement de la Logistique, AMDL), which was created in 2012 and is tasked with overseeing the implementation of the country’s logistics strategy.
A total of Dh166bn (€15.2bn) was invested in transport and logistics in 2012-16, nearly double the Dh90bn (€8.3bn) spent in the period between 2008 and 2012. According to the Ministry of Transport, Equipment and Logistics, between 2012 and 2016, Dh63bn (€5.8bn) will have been invested in the logistics sector alone.
In 2011 the government rolled out PortNet, a single window system for Customs processing, that enables cargo to be released faster, which in turn saves costs and time. According to World Bank data, time to import into Morocco has decreased from 16 days in the 2012 to a total of 226 hours, or just over nine days, including documentary and border compliance, as of 2016. “PortNet is a great tool to dematerialise, to remove the paper flow. It facilitated the process, and we can give it to the back office, so we can focus on our customers,” Otmane Sentissi, director of client services at Maersk Maroc, told OBG. “We can release cargo by email in Morocco today. This is not possible in Algeria or Tunisia. In terms of opening up Customs transparency, we are ahead.”
Government Policy & Vision
The National Strategy for the Development of Logistics Competitiveness consists of five key points for the development of the logistics sector: providing the country with efficient logistics infrastructure through the establishment of a network of logistics areas; accelerating the modernisation of the sector through action plans to optimise logistics flows; taking action to promote the emergence of integrated and efficient logistics; providing a comprehensive national plan for the development of skills in logistics; and strengthening sector governance through the establishment of dedicated bodies (AMDL and the Moroccan Observatory of Logistics Competitiveness).
Logistics zones will be established by 2030, with 2700 ha of the 3300-ha total already set aside. According to AMDL, among the 2700 ha, roughly 1000 ha has been identified around Casablanca and another 1700 ha in the cities of Agadir, Meknès, Fez and Tangiers.
In Casablanca the land is to be divided into nine different logistics areas. The Zenata logistics zone, the first of the two zones being built in Casablanca, includes 10 warehouses with a total area of 60,000 sq metres. The zone will include 200 ha of land owned by the National Port Authority, 95 ha by the National Railways Agency (Office National des Chemins de Fer, ONCF) and 28 ha by the National Society of Transport and Logistics. The zone will be dedicated to wheat containers, distribution, logistical subcontracting activities and other related activities.
A Dh1.3bn (€119.2m) road connecting the port of Casablanca and the Zenata logistics zone has been constructed and the maritime portion of construction work is currently under way, with an investment of Dh700m (€64.2m).
Maintenance and repairs of existing roads has posed a challenge to the country in the past few years. Recent engineering studies carried out by the Ministry of Equipment, Transport and Logistics showed 100 bridges throughout the country were in need of critical care and 200 more deserved specific attention. To date an estimated Dh3bn (€275m) has been allocated to repairing bridges across the nation, local media reported. The focus on modernising the road network should cut costs for suppliers and customers.
The second logistics zone located in Casablanca is Mita, which will be managed by ONCF and will cover a total area of 32 ha. Completed in 2013, the first tranche of the zone, with a storage capacity of 300 twenty-foot equivalent units, includes 28,000 sq metres of warehouse and office storage, 4000 sq metres of postal warehouse and 4500 sq metres of office space.
The success of the strategy to cut logistics costs will hinge on the involvement of private and foreign partners, particularly in light of the more austere government budget, but this will also involve addressing sectoral challenges with fragmentation and informal operators.
Logistics operators wishing to settle in Morocco report difficulties in finding sufficient reliable companies – particularly in terms of road transport – to outsource transport operations to. “Especially in trucking, our business is affected by this informal sector,” said Antoine de Mirbeck, managing partner at Ipsen Logistics. “It’s very hard to be competitive today if you want to invest in trucks because of the informal sector.”
Efforts to bolster the logistics sector seem to be paying off, and the kingdom has increased its competitiveness on an international level. On the World Bank’s logistics competitiveness index 2014, the latest edition of the benchmarking tool that compares the sector in 160 countries, Morocco leaped to 50th place from 90th place five years earlier, a testament to its efforts to improve. However, the country experienced a setback in 2016, when it fell back to 86th place. The recently announced strategic plans should help it improve.