Interview: Freight Reach Services CEO
Freight Reach Services has an ambitious plan to become a leading player in the African logistics sector, according to CEO B. Rajagopalan.
What is the history of Freight Reach Services?
Freight Reach Services was launched in July 2010 as a niche entrant to the Middle East logistics industry, backed by a team of people with more than 40 years of global experience. We can arrange warehousing and value-added services for various products and temperature requirements through our warehouses in Jebel Ali Free Zone and Al Aweer in Dubai, together with a facility in the Kenyan city of Nairobi. In addition, we offer a comprehensive range of services for air, sea and road freight, or multi-modal transportation.
Does the company have a primary focus?
Yes, our focus area is the Africa trade lane. Initially we are looking at East Africa, although there are plans to expand into West Africa and Central Africa in the next year, such as Nigeria and Ghana. Our facilities in Jebel Ali Free Zone and Al Aweer are already supported by a warehouse and office in Nairobi, together with offices in Mombasa, Dar es Salaam, and Kampala. This means we can use Dubai as a transit hub and consolidation centre for shipments between the Far East and Africa, on top of export shipments from Dubai into Africa. Our team has a lot of experience in this market too. I was group managing director of Swift Freight until March 2010, which has a major focus on Africa, while the rest of my team also have impressive experience in this regard.
What prompted this focus on Africa?
A number of markets are still climbing out of the global recession, such as Europe and North America, and to some extent, the Middle East as well. But with Africa, it’s a really attractive market at the moment. Although competition has increased in the continent, there have been a significant amount of developments in terms of transportation infrastructure and that will continue in the coming years too. And this is not limited to the more developed countries, such as Kenya, but also the likes of Angola and South Sudan, which are emerging markets in their own right.
Are there particular industries fuelling demand for logistics services in Africa?
The development of transportation infrastructure that I mentioned before will need logistical support, which is a huge potential market for our company, whether it’s the upgrading of airports and seaports, or construction of brand new projects. But we’re also looking at non-government projects, such as those by the United Nations, World Bank and other NGOs. It’s very important that we get involved in these projects too.
What are your initial targets for the company, and what challenges do you expect to face in achieving these?
We are looking at a turnover of AED 60 million a year and there have already been positive signs of growth. We started with three people in this company, and within a relatively short period of time, this has increased to 26 people in Dubai alone and 45 people on a global scale. However, there are some bottlenecks ahead. Money is tight in Africa and the biggest challenge is ensuring that cash control is kept in place. It’s also a competitive market, so we want to remain selective and do business that makes sense. We want to expand in such a way that customer service in not comprised, so rather than focus on huge volumes, we want to adopt a niche approach.
Are you planning an expansion into other Middle Eastern markets or other countries around the world?
Since we are focused on the Africa trade lane, which can be efficiently served through our facilities in Dubai, it’s not part of our immediate plans to expand into other Middle Eastern countries at this stage. We would prefer to work with a network of agents and partners in those countries. However, we formalised a partnership with Globalwings Logistics recently, which is one of the fastest-growing companies in the China market and also specialises in Africa. This supports our focus, because they operate branches in Guangzhou and Hong Kong, both significant trader markets with Africa, so we benefit from their operations and experience, while they benefit from ours. Similar partnerships could be formed in South Asia over the next couple of years and while the US and Europe trade lanes are important, there are no plans to open there for now. Maybe we will have marketing and sales representation instead.