Union Logistics Uganda: Logistics, Freight Forwarding, Warehousing and Customs Clearing Solutions

Interview with Hitesh Shah, Managing Director of Union Logistics Uganda Ltd

What is your assessment of the logistics and transport sector in Uganda? What are the latest trends? Is the sector competitive?

The logistics and transport sector is extremely competitive here. Uganda is a landlocked country. Kenya and Tanzania neighbor us and both have ports – Mombasa in Kenya and Dar es Salaam in Tanzania – which gives them competitive advantages. In Uganda, there is less infrastructure and less logistics and transport capacity. There are also several government authorities involved in the sector here such as URA, UNBS, NEMA, NDA, etc. In order for customers’ cargo to be cleared we have to deal with all these organizations, procedures, and systems. This makes the industry quite competitive in Uganda.

Are there many companies competing in the sector?

There are many companies ranging from large internationals to small. These companies develop the level of activities and things they can do. Big companies, international companies, and companies like our Group can provide the whole range of logistics and freight forwarding services. We provide sea freight, air freight, road freight, all modes of transport door to door, worldwide. A smaller company might only be able to provide local clearing within Uganda.

How do you stand out from the competition? What makes you different?

There are a few factors which make us unique and separate us from the competition, including international players. The first is that our major focus, our primary motto, and our primary belief is service excellence. Secondly, we are resource based within East Africa so were are less dependent on outside service providers. Thirdly, we have full coverage. We have an international partner, as well as regional associates and partners who are also resource based companies. We are very strong locally. We provide the whole range of logistics services and freight forwarding services from sea freight to air freight to road freight for project cargo, bulk cargo, 20 and 40 ft containers, commercial cargo, LCL. We also have warehousing and distribution services. We provide all of this worldwide, regionally, and locally.

What is an example of this?

We can handle any type of cargo anywhere in the world. DSV is one of the top three global freight forwarding companies worldwide and we represent them as their agent in Uganda. Therefore, we have access to all the DSV offices worldwide.

Because of our focus on service excellence, there are worldwide international companies which are very focused on quality of service that are quite interested in working with us. This is their reputation more at stake than our own if we fail. They want to deal with companies where they can be 100% assured that we can provide services that will meet and exceed their expectations. We handle several projects in logistics and transportation, infrastructure, hydropower, mining, and handling biological substances that are very time and temperature sensitive for various mining companies such as Kibali Gold Mines and other companies such as World Courier. If we delay, their entire project would be delayed. Project delay costs for these companies can be very high. Based on our time sensitivity, quality of service, and our efficiency, they prefer to use us. We do not compromise on quality of service and this makes us unique and we are quite reputed for it.

What is one of your success stories?

We handle several projects. Recently, we handled a project with which was a big 35-ton shipment by air. It came by chartered Ilyushin Il-76 to Entebbe. We transferred it to our Group and associates and handled the clearing and transportation up to the site in DRC. As a Group, we and our associates have handled oil and gas mining projects, oil drill rigs, and several other big items like transformers, turbines, etc. We specialize in handling project cargo, but we are experts in handling commercial cargo as well.

What is your relationship with DSV?

Recently, we were appointed as an agent of DSV. DSV is one of the top three freight forwarding companies in the world. They operate worldwide. They are a large company and they are experts in logistics and freight forwarding. We are now their agent in Uganda. Most of their cargo to and from Uganda will be handled by us. This will include everything from commercial cargo to project cargo.

Are you interested in looking for investors or partnerships?

In Uganda, the cost of doing business is still quite high. When obtaining financing from banks, the rate of interest is almost 19%. It is extremely high for any business to borrow money. You need to have a lot of working capital. That affects your business in terms of liquidity and having your own capital. We can really expand in this country if there is more liquidity and more finance.

What is your international reach?

We can handle any type of cargo anywhere in the world. DSV is one of the top three global freight forwarding companies worldwide and we represent them as their agent in Uganda. Therefore, we have access to all the DSV offices worldwide. We are also very strong regionally within the African space. We can give complete logistics, freight forwarding, warehousing, and customs clearing solutions regionally, locally, and worldwide.

What are your current projects for developing the company?

We are considering having our own full-fledged ICDs, inland container depots, which is a place where you store all your clients’ container cargo and then deliver cargo when the client has paid their duties and taxes. You return the empty containers to shipping depots in Kampala, Mombasa, or elsewhere. We want to build state of the art warehouses, a parking lot, a workshop for truck repair and maintenance, and bonded (under customs control) and non-bonded (duty paid cargo) warehouses in Uganda. We already have a transit yard in Arua where we have our own 50-ton crane and forklifts. We want to have similar operations in Kampala as well.

Project yourself two to three years’ time. What is your vision for the company?

In the next three years, we want to triple our revenue. To do that, we have several plans to execute. We will be focusing more on those projects as well as securing new projects. We will also add more resources here so our capabilities will be enhanced in terms of buying a trucking fleet, having our own ICT, putting up warehouses, and having our own handling equipment and specialty equipment. We want to grow as well, so in the short term, the next three to six months, we are planning to restructure and introduce shareholding so our Group can become bigger and stronger in Uganda.

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