Logistics Sector in Uganda: An Overview of Logistics Expert Bro Group Holdings

Interview with Geoffrey Bihamaiso Baitwa, Group Managing Director of Bro Group Holdings

What is your assessment of the logistics sector in Uganda? What are the challenges? What are the latest trends?

The logistics sector in Uganda has been growing over the years. From the time we set up this business about 22 years ago, there has been a lot of transformation in this sector. At that time, we had very few Ugandan players doing the actual transportation, movement of goods and cargo forwarding. Now, we have a number of Ugandan companies involved in the actual transportation and forwarding of cargo. Previously, we mainly relied on multinationals like Bolloré, who was known as SDV Transami in those days, Spedag Interfreight, etc. The key players in the market were mainly overseas but we now have quite a few regional players from Kenya and Tanzania that have joined. Today, there is quite a span of indigenous, local, foreign, and regional players in the market and the sector is still growing. Transport and logistics plays a large role in any developed or mature economy. Movement of goods and people will always be there. Uganda is quite well located as a country. We may not be at the coast, but we are at the center of a number of neighbors. We have South Sudan which is a developing country. The eastern part of DRC is so huge it is almost the size of Western Europe. We have Rwanda and Burundi in the south. Uganda is well located to be a logistics hub to help whoever wants to trade in this part of Africa. I see a lot of interest in Uganda and a lot of players coming in. Hopefully, when the roads and other infrastructures are developed, this country will be able to serve as a hub to these growing economies.

What does Bro Group do?

Uganda is well located to be a logistics hub to help whoever wants to trade in this part of Africa. I see a lot of interest in Uganda and a lot of players coming in.

Bro Group is a conglomerate of companies. It is the holding company for my three logistics companies. We have the cargo freight forwarder, Threeways Shipping Services. They do most of the marketing, finding business, and contracts. We look for asset-based business as well. Without any asset base, it sometimes becomes difficult to wrestle your position in the market. To attain a level of reliability and control, we invested in some assets, mainly long-distance heavy haulage trucks which are operated by our other company, Transtrac. Then, we have the light commercial trucks under Threeways Distribution. They mainly do the local and regional distribution transport services. Transtrac also handles our heavy lifting arm. Those entities control the assets side and Threeways Shipping is basically a third-party logistics provider. At the 3PL level, you do not own an asset but you subcontract all the required activities. At Threeways, we look for the business then subcontract to our entities, do the same to the assets with Transtrac, and then Distribution to do the other work which is light commercial transport.

What makes you stand out from the competition?

Some of the key pillars that differentiate us from the rest of the competition are reliability of service, innovativeness, and going the extra mile. In whatever we do, we give 101%. If you do that, you are more than reliable and you develop relationships. We have relationship-driven business engagements. Our business is not only transactional where we just transport the cargo and get paid and that is all. We try to develop relationships with whoever we deal with so we can understand the nature of their business and they can understand how we work. We understand how they want their things priced, their requirements, and expectations. If you go the extra mile all the time, then you have reliable, consistent service and you will blossom.

What are some of your projects that are success stories?

Regarding innovativeness, you should always try to create a difference in whatever space you are in. The difference is in how people appreciate and take on the service you are giving them. When we set up here 22 years ago, cargo would come into Uganda, but there was no interaction between the client and the provider other than being called and told the cargo had arrived. You could not see the progress of your cargo or where the cargo was. In many cases, we used to go to some of these players and sit out in reception to try to see someone and they would hide or tell you to come back tomorrow. We realized that there was a lot of anarchy and agony in the entire process. We began to send out clients daily status reports by fax. We told them where their cargo was, if the vessel had arrived, if it was still under clearance or in port, if it was in transit, where exactly it was on the road, etc. We introduced that into the market and it was simple, but we churned out reports all day. When technology changed to computers, we switched to emails. Now, everyone is doing that. Secondly, people did not know how much money to put aside to pay for their taxes. So, prior to the client’s cargo arrival, we would prepare a worksheet of the tax amount they were going to pay and a breakdown of the various taxes, import, VAT, withholding. If they had any dispute or disagreed with us at that time in the classification of the cargo, they would have ample time to get back to us and if they agreed with everything, they would give us the money. That is now very common among players in the sector. Now, we have introduced a flow chart so that when the cargo arrives, we are able to give the customer a report on the progress of the cargo for each day. If there is a dispute somewhere for storage charges or delays, you are able to account for everything. On the execution side, we have tried to have innovations in the way that we manage our fleets and in the way that we execute the service to the customer.

How are you going to develop the company in terms of international reach?

Right now, we are a regional player and we are trying to increase our footprint regionally in Uganda, Tanzania, and Kenya. We tried to enter South Sudan, but the effects of the instability there have made it quite difficult for us to operate there currently. We have also looked at operating in DRC, Burundi, and Rwanda. Trade among East African countries has been quite minimal, mainly arising out of remoteness resulting from a lack of infrastructure. As these populations increase and infrastructure improves, we see trade among East African countries picking up. It will be nice to be a regional player and beyond East Africa to facilitate movement of goods across East and Central Africa to eventually include Mozambique, Malawi, Zambia, Zimbabwe, and possibly Botswana. Obviously, South Africa is on its own because it is a very mature market. Now, we are focusing on Kenya and Tanzania because Uganda, South Sudan, DRC, and the other landlocked countries here rely on these two ports for their imports so there is assured business. Beyond that, we want to play into the local markets of Kenya and Tanzania. We want to interlock the three and enhance movement of goods through trade among the various players in those countries.

Project yourself three years into the future. What is your vision and what do you want Bro Group to achieve?

In three years’ time, we want to maintain first and foremost the current trajectory we are on. We want to split the business into a logistics side and an ecommerce side. One of the things we are looking at on the ecommerce side is a trading platform. Also, there are quite a number of platforms such as transport, etc. On the logistics side, we will be looking at more third-party platforms for the services that enhance our logistics activities but also cut across to the actual trading to allow people to sell their goods offline. We have a number of small industries in this part of the world. Some of them are not even noticed, but they have quite good products to offer. There is lack of visibility, lack of outreach. People are now using phones and internet services in this part of the world because they are readily available so there is an opportunity on the ecommerce side in the regional aspect. For the ecommerce players on the global scene- Amazon, Alibaba, etc.- the only way to drive trade is by creating a localized aspect of that. In three years’ time, we want to be a player there and be facilitated by our own logistics entity to be able to have a good grip on that area. In addition, in three to five years’ time, we also want to list on the stock exchange to create more value for the shareholders.

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