SeaRail is into business
Botswana Guardian’s KOOBONYE RAMOKOPELWA interviews SEA RAIL acting MD, Derik Mokgatle
Botswana Guardian: Kindly introduce Sea Rail to our readers.
Derick Mokgatle: Sea Rail ( Botswana) ( Pty) is a transport and Logistics company founded in 2013 to develop and operate a Dry Port land, leased by the Government of Botswana in Walvis Bay, Namibia. The company is a wholly owned subsidiary of Botswana Railways. The dry port measures 3.6 hectares and is located within the boundaries of the Port of Walvis Bay, known as ‘ Namport’. It was opened for operations in September 2014 and serves as a staging facility ( or temporary storage for further processing) for import and export cargo to various destinations within SADC and abroad. Beyond the dry port services of bonded storage facilities and cargo handling, SeaRail offers freight forwarding solutions that include transport and customs clearing to make it a one stop shop for cross border clients, wishing to route their goods via the Port of Walvis Bay.
BG: How much has the Sea Rail shareholder invested on its formation?
Mokgatle: As at March 31st 2021, Botswana Railways has invested BWP75 million towards the developments and operations of the company with the aim of 60percent going towards infrastructure and operating equipment and 40percent towards the initial operations.
BG: What initial challenges did the company experience when setting up?
Mokgatle: After opening for operations in September 2014, the company could not handle containers at the dry port due to the conditions attached for the Environmental Clearance Certificate ( ECC) that was issued by the Ministry of Environment and Tourism in Namibia. There was a condition that should containers be handled at the dry port, a noise barrier should be built on the perimeter fence adjacent to households neighboring the facility. The condition was later lifted in February 2016 after protracted negotiations with the Authorities. At the time the dry port became popular with only handling second vehicles imported into the region more especially from the UK. The company experienced a delay in fully operationalizing the facility by purchasing basic operating equipment as well as developing other envisaged infrastructure within the dry port.
BG: How supportive is the Namibian private sector on your operations?
Mokgatle: the Namibian private sector forms around 80percent of Sea Rail’s clientele. This is largely Clearing and Forwarding Agents for cargo through various corridors, including cargo to and from Namibia, Zimbabwe, Zambia and DRC. Traffic is expected to grow through these relationships that have been nurtured throughout the years. We continue to raise awareness about the dry port so that it is not viewed as competition but rather a facilitator in the transport and logistics industry to enable ease of cargo consolidation and distribution of cargo to the region at large.
BG: How has been the company’s overall performance in the past 5 years?
Mokgatle; The company’s throughput volumes had been growing year on year before the disruption by the COVID- 19 pandemic. As at March 31st 2021 container volumes were 139 TEUs dropped from 427 of the previous year. On the other hand, vehicle volumes grew by 53percent to 2, 147 at the end of March 2021 compared to the previous year.
BG: How is competition in the sector you are operating in?
Mokgatle: Competition is high in Walvis Bay for depot services which is good factor to bring about the best service in the corridor. It is critical for SeaRail therefore to build strong relationships and offer excellent service with the clients so that they can be retained. Opportunities for value added services are always explored to differentiate our services from the competition. SeaRail also continuously explores opportunities for synergies with other agents for partnership relationships rather competitors.
BG: How has COVID- 19 affected the company in
Mokgatle: The COVID- 19 pandemic disrupted supply chains globally. At Walvis Bay, we experienced a shortage of containers required to pack and export cargo. In addition, vessels scheduled for Walvis Bay were disrupted and delays of cargo on sea was experienced as well as a drastic increase in ocean freight rates especially for the east. Some of SeaRail clientele who could normally ship around 30 containers a month that were stuffed at the dry port, lost their oversea clients.
BG: How has the company managed to deal with problems posed by COVID- 19?
Mokgatle: As it relates to challenges of shortage of containers, we are promoting the use of bulk vessels for export of minerals and for imported containers we are promoting the unpacking of containers at the dry port to transship cargo to inland destinations in order to cut transport costs by the need to return empty containers back to the port and also improve container availability.
BG: What are some of the major projects that the company has completed in the past few years?
Mokgatle: In the past two years, we constructed and commissioned a reefer station and an underroof storage shed in December 2019 and December 2020 respectively. The reefer station has 48 plug- in points and has enabled the dry port to store and handle perishables such as fish, chicken, meat, fruits and vegetables. While the underroof shed has a capacity of 3000 square meters and enables the dry port to attract more volumes for high value commodities such as FMCGs and copper.
BG: What infrastructural projects is the company planning to further strengthen its capacity?
Mokgatle: The intention is to increase volumes to fully utilize the current capacity and business should determine where there is need to add extra capacity.
BG: We understand you have a 3000 square metre warehouse. How is this warehousing helping you with business operations?
Mokgatle: So far, we have handled 2000 tons of copper through the warehouse and we expect to grow traffic for the dry port through this facility. It has attracted a lot of enquiries which will eventually turn into continuous anchor business for SeaRail.
BG: How much of a business is the company getting from SADC countries?
Mokgatle: Currently from April to October 2021, we have received the 76 TEUs of reefers through the dry port destined for the DRC as one of the growing volumes through the dry port. Before COVID- 19, we used to handle about 30 TEUs per month for timber from Zambia. This business is expected to start again in early 2022. On vehicles, SeaRail used to handle around 100 vehicles a month, 90percent of which were going to Zimbabwe.
BG: Botswana is experiencing a boom on mining projects. How has the company positioned themselves to benefit from these?
Mokgatle: The company is promoting the use of 50 000 - 60 000 ton bulk vessels through the port of Walvis Bay and working on solutions to transship ore from Botswana at Gobabis to be railed up to Walvis Bay. Botswana Railways signed a MoU with Transmit in 2019 to develop a dry port facility at the Gobabis rail head. SeaRail in collaboration with the Walvis Bay Corridor Group are planning a road show to tour all the mines in Botswana in February 2022 as well as to hold an information session in conjunction with the Botswana Chamber of Mines in Gaborone to promote the Walvis Bay route.
BG: What other opportunities are available for the company?
Mokgatle: Growth is expected in the short term in the reefers for imports and exports of perishables like fish and chicken. There is a lot of room to increase in volumes in and out of Botswana through the dry port and Sea Rail’s value proposition which is for quicker transit times, safety and security of cargo through the trans- Kalahari corridor will play a huge factor in growing these volumes. The promotion of containers being unpacked at the dry port then transport breakbulk to inland destinations is expected to grow volumes since it will reduce transport costs by about 15percent.
BG: What strategic partnerships does the company has?
Mokgatle: SeaRail has partnered with BITC to explore opportunities for easing Botswana exports into the lucrative DRC market through infrastructure and transport solutions. We also have a MoU that was signed in February 2020, which amongst others is for BITC to refer investors wishing to set up in Botswana to liaise with SeaRail for logistics solutions via Walvis Bay. We are also working on MoUs with SEZA and other stakeholders in Botswana.
BG: What does the future hold for Sea Rail? Mokgatle:
- Turnaround Development Strategy: SeaRail is embarking on the development of a 5- year Turnaround Strategic Plan. A consultancy tender for the project is expected to be awarded in the fourth quarter of 2021/ 22. Branch Office in Gaborone, Botswana: in order to cultivate more business on the Botswana market and in an effort to divert Botswana cargo through other regional ports to Walvis Bay, the company is working on establishing an office in Gaborone by June 2022. The target is for SeaRail to control over 50percent of market share on container volumes going to Botswana.- Gobabis Dry Port Development: the company is exploring a solution to put some of the cargo on rail between Walvis Bay and Gobabis is being explored for high volume commodities like coal and iron ore from Botswana. This is meant to cut the distance on road by around 650 km on the Trans- Kalahari corridor and eventually reduce inland transport costs. Engagements with mines and Trans- Namib are on- going for a dry port at the Gobabis rail head. Strategic Partnerships: SeaRail is determined to grow partnerships with clients and other stakeholders to grow volumes for the dry port and these include transporters, and institutions like BITC, SEZA and other parastatals and non- governmental organizations.