Namibia is a net importer of goods and sometimes critical services and as such has allowed the competitive market forces within the transport sector as a whole, to be the ferries of goods from other countries. Namibia is also providing a vital transshipment service to landlocked countries, like Botswana, Zimbabwe and Zambia. There are more than 30 road transportation companies in the country who are competition for services and contracts to transport goods from Namibia and/or to other countries from the ports of Walvis Bay and Lüderitz.
Historically, before the independence of Namibia (South West Africa) was under South African administration and at that time the communication networks of the country were determined by South Africa. The wars of independence were not encouraging the development of local companies and therefore most transportation organizations were from South Africa in the main.
This was also a time when the Railways, Airways and Road Haulage were under the auspices of the then South African Railway and Habours Company now aptly renamed Transnet in the country and totally segregated from the conglomerate it was then.
The transformative years can be described as those years in the 1985 – 1995 for both Namibia and South Africa in the sense that these were not just the years of political transformation for these countries, but also a time for true economic liberalization and the opening up of market participation by the private sector.
Legislations relaxation was by and large the order of the day and this consequently allowed for true competition to pervade the transportation market. On top of it all, the State could no longer sustain loss making operations as it was fighting the effects of sanctions and internal social and labour unrests within its markets. It must be noted at this juncture that the then South African government utilized public utilities as a safety net for poor and uneducated white community in an attempt to unrealistically sustain apartheid and white domination within the two countries. Government Tenders were by and large also allocated to these communities for obvious reasons.
3. Critical evaluation of current strategy for an acceptable customer service quality
The prevailing market conditions remained in that the country needed to import goods from South Africa and that those goods needed to reach Namibia faster than ever before. The virtual collapse of the railways system allowed for ever more increases in road haulage companies in the country.
The market is ever expanding with novices trying to make inroads into the sector by operating on the niche markets. But the dichotomy of the market is that the more work (in terms of contracted work) becomes available the more casualties were are observing. It is therefore at this point that the author will delve into the question to critically evaluate current business strategy for maintaining market position and competitive advantage of our selected organization.
I had mentioned in my introduction in earlier paragraphs that one can loosely segment the transportation market in Namibia into big, medium small and specialist players. Historically we have seen the reason for constraints placed on the sector and with the removal of those constraints we are able to see to the benefits that accrued to large companies; My essay will address these factors in the following paragraphs, but also explain the need why some to remain in a particular segment and to compete within that segment of their market.
Big is better:
I spoke to the owners of several of the haulage companies and they all have diverse views of the market and generally detest each other although most of them are friends to each other. These are some of the big companies by size.
(a) FP Du Toit: This company was formed in the 1980’s and created a standard of being the best in all forms of transportations, be it furniture, frozen goods and or machinery and equipment, they were a bona fide South west African company which transitioned well into the new independent Namibia and had a strategic advantage in the sector. This company at its peak had a fleet of 300 trucks and was able to deliver locally in the country with smaller trucks.
(b) Wesbank Transport: Remains as one of the largest transport companies in Namibia to date and has been for more than 30 years. Their merger with former Etosha Transport further enhanced their operations, but also reduced competition in the market by taking out an old rival – Etosha Transport. Wesbank specialized in all goods except frozen goods and perishable food stuffs.
(c) Absolute Logistics: Recently entered the market in 2003 and showed exceptional growth and market presence and dominance. This company started with 2 trucks but has a fleet of more than 60 trucks and trailers. Today it carriers a significant advantage both in terms of operational effectiveness and is poised to be the next market dominant company.
It is the latter company I want to evaluate and share its experience with the reader, but would also juxtapose it against what is happening to smaller and specialized operators in the market.
I asked Holi of Absolute logistics what were the factors that helped me grow so fast? This is what he had to say “Max, the transport business is lucrative and addictive; lucrative in the sense that everybody needs something from somewhere and one has to be at the right place to make sure one can clinch the deal for at the right price. Our growth has been rapid due to small and incremental successes were able to show during the early days of the business.
The business network partners we have built up over the years was both strategic and deliberate for our own learning and success. The important thing about the business is to ensure highest quality of reliability and competence. The customer must not wait for nonsense but must have the assurance that we will deliver on time. I have made sure I have a team of good administrators, drivers, mechanics and even clearing agents. Our in-house clearing agents, both in South Africa and Namibia understand our business model and can therefore operate efficiently and effectively. We as a result can price our service optimally knowing we don’t have external dependencies. Importantly to all this, I’ve come to realize is the size of the business, bigger is better. The business is addictive in the sense that one wants to increase doing the best every time you get a new client. ”
Customers is the most valuable stakeholder in any organization and must be treated with highest priority. Trucking companies in Namibia is a lot and competition is very high hence customer can easily move from one transporter to another one if the service delivery is not satisfactory. Constantly maintaining customer satisfaction is key to the organization and must not be neglected for a minute. It is imperative to impress your customer first and keep open communication and build and retained the good relationship.
4. Suggest plans to implement to improve service quality in above ID areas
My observation with a smaller but specialist market player revealed some obvious concerns. The matter being still a legal, I opt to call this company U Turn Transport to conceal its real name. U turn is a black owned company that applied for a loan at the Development Bank Namibia and with only one prospective contract in place. It was granted the loan to purchase 3 trucks and trailers for the transportation of processed uranium from a mining site to the Harbour for export. But soon after the loan was approved, the mining company which had awarded U Turn the contract was forced to shelve its mining operations due to international commodity price fluctuations but more directly as a result of the effects of the Tsunami that hit japan with the consequent melt down of their nuclear reactor. It was therefore no more feasible to mine Uranium as price had fallen. The resultant effect to the U Turn company was dramatic; Management failed to secure new contracts and/or diversify operations to other non-mining sectors; their crisis continued to grow in that the bank wanted its money back. The trucks were idle for more than six months and the bank eventually foreclosed on the loan, repossessed the trucks and sold them at auction.