Transport and Logistics in Ghana: McDan Group, Freight Forwarding Specialist

Interview with Dr. Daniel McKorley, Executive Chairman of McDan Group

You offer many services such as warehouse services, cargo handling, and custom brokerage. What are the general trends in the sector here in Ghana? How would you assess your segment?

The general industry is an emerging industry. We are offering service in a total logistics industry. We go end to end. West Africa is an emerging economy in terms of logistics. Comparatively, we have just arrived and we are just coming up. The government has done very well and we have one of the best systems in the world in terms of freight forwarding.

Why do you have one of the best in the world? Other than the government investing strongly, what else contributes to this?

I have gone north, south, east, and west and the systems we have here in terms of clearing from the various ports you can get in only a few countries, even the US does not have it. Singapore and only one or two other places have what we have. Just the human element is what is creating that, but with the system we have, you can get your cargo out of the port within a few hours.

Is this due to investment?

Yes, the government has invested heavily in the GCNet (Ghana Community Network Services Limited) system and also the Ghana Revenue Authority has invested heavily into sanitizing the port and limiting the delays in the port.

Does this make Ghana an ideal entry point for West Africa? How do you compete with other countries like Côte d’Ivoire which is right next door and quite large?

Ghana is a place to be in terms of moving your cargo to other parts of Africa in terms of a landlocked country. That is the reason why it is very difficult to compare. It is so hard to do at cost. Coming through the Ghanaian port is a bit expensive compared to Côte d’Ivoire. Cost wise, we are not competitive.

Can this be improved?

That has been seriously worked on. It is simply because the shipping lines and other auxiliary charges are on the higher side. In terms of cost, we are not competitive, but in terms of efficiency, we are one of the most efficient ports in Africa.

What are the main competitive advantages your company can offer?

We are a 100% indigenous company. The major international companies cannot compete with us on the ground because we understand the terrain. We move cargo and that is the competitive advantage we have over our competitors.

Which segment are you the strongest in?

We started with a single office freight forwarding company, custom brokerage, and we grew organically to this level. In terms of warehousing, we are highly competitive because we own our own warehouses. In terms of haulage, we own our own fleet. We have close to 200 trucks on the road. By this time next year, we should have 100,000 m² of warehouse space. Currently, we have close to 50,000 covered space and over 58,000 m² uncovered space. We are strong in custom brokerage as well. Our field of specialty is project cargo. We enjoy doing projects because time and cost is our priority. There are a lot of projects coming to this part of the world in water, the energy sector and the construction sector, which have timelines. We normally get a contract from end to end. If you want to do a project in Ghana, Sierra Leone, Liberia, Equatorial Guinea, all you need to do is contact us. We will pick up the cargo at your factory and bring it right away to your site. All we need is a timeframe for when you need your cargo. That is our strength.

You are based here in Ghana, but where are your other facilities?

Ghana is our home base. We are operating from 2,400 ports mainly through our network partners. We have our own offices in Sierra Leone, Liberia, and Equatorial Guinea. We now go to South Africa and Nigeria. We operate from China and the US through our own offices.

What is the advantage of having this international base compared to others that are only in Ghana?

It sets us apart. In our freight forwarding, our total logistics is to make the world like a village. There should be no complications when you are able to hire the right people and the right companies. Most companies are outsourcing freight forwarding, so it is quite interesting.

You are looking for technical or international investors. What are the areas, what do you want to attract, and what type of financing are you looking for?

Currently, we are doing the whole chain. We are not limited in any other way to keep growing. At the rate at which we are growing, we will need an international partner, not only for the finance, but also technically. When it comes to this type of business, one plus one does not equal two anymore. One plus one becomes three. So, we want an international partner in technical and finance so that we will be able to control Africa.

At DHL, they have offices everywhere. How can you compete with them if you look at the geographic implementation? Why should someone choose you over them?

We are a 100% indigenous company. The major international companies cannot compete with us on the ground because we understand the terrain.

If you go to DHL, it would be very difficult for you to see the CEO. You walk into McDan and you meet the man himself, you meet the project managers who will be on the ground. The other advantage we have is that we take our clients very seriously. We deal with the right people when we deal with clients. When it comes to prefinancing and financing, DHL has a very long and rigid system for their projects. These are some of the advantages you will get with us. We understand the terrain and cost. With most projects, your logistics cost come between 15-25%, so you must be able to reduce that kind of cost. The only way to reduce is when you choose the right freight forwarding logistics partner. The ports are charging higher demurrage, the shipping lines are charging demurrage, and so the cost element is very high. If you do not hire the right partner, you end up spending money on hidden costs.

What projects are you focused on at the moment?

Right now, we are focused on projects such as McDan Aviation, we have the FPO, we are running the port, we have the cargo handling licenses, we have the ground handling licenses, we have all the licenses that it takes to manage the ports. That is one of our biggest projects we are running. We are expanding our territory. We are talking to some global players in the aviation industry. We are building our own hangar at the port. We have our own launches for our private jets coming in.

Project yourself two to three years’ time in the medium term. What is your mission for the company?

For now, we want to be a global player. We want to control the logistics business in Africa. That is our basic plan. In Ghana and internationally, we have won almost every award that a freight forwarding company should win. We are the International Freight Forwarding Company of the Year. It tells you the good work we are doing. We have a reputation to protect. We have integrity to protect. In the next two or three years, we should see ourselves as a bigger player in Africa.

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