FT. (Djibouti) - There is a striking view from the road leading to Doraleh Container Terminal, in the east African state of Djibouti. The terminal, the first phase of which opened this year and will cost $400m to develop fully, lies on an artificial island in water deep enough to accommodate the latest large container ships. The approach is along a new, kilometre-long causeway. The huge, state-of-the-art container cranes at the end stand in stark contrast to the rest of run-down Djibouti City.

Back on the mainland, however, other parts of Djibouti’s logistics sector are still struggling with the bureaucracy and poor infrastructure more typical of Africa. DP World, the Dubai-based company that runs the Doraleh terminal and the old city-centre Port of Djibouti, has had to build a container yard away from the port to store boxes awaiting collection.

Containers bound for neighbouring, landlocked Ethiopia have recently had to wait an average 109 days as the consignees grapple with the bureaucratic, financial and logistical problems of sending trucks from Ethiopia to collect them. A line of waiting vessels in the sea outside the old port testifies to the congestion these delays create.

The question for Africa’s logistics sector is which of the two scenes will be more typical of its future – the modern, efficient container terminal or the congested, chaotic old port.

Anil Singh, managing director of DP World’s Africa region, says there is a recognition of the need to improve Africa’s logistics links. But he goes on: “There are so many links in the chain it’s difficult to get that chain together in a coherent way.”

At the heart of the interest in Africa of companies such as DP World, Hong Kong’s Hutchison Ports, the logistics arm of France’s Bolloré group and some large container lines is its largely untapped potential. Competition for business is less fierce because there are fewer operators. Investments in ports or other businesses are likely to experience more rapid growth than in more mature markets such as western Europe or north America.

Nicolas Santini, a senior executive at France’s CMA CGM, the world number three container line, says the resilience of Africa in the current economic slowdown has been striking.

“This was probably the market in which the slowdown was coming after all the others,” he says. “It’s slowing slower and not so much.”

Dominique Lafont, Bolloré Africa Logistics’ chief executive, says business in Africa will confront difficulties. But he adds: “We think that nothing can block or hinder African development.”

One of the main areas of potential improvement is obvious during a visit to Djibouti’s old port. Hundreds of workers are swarming over the Servet Y, a bulk carrier, as it loads its cargo of Ethiopian sugar. Purple sacks are lugged one-by-one on to slings on the quayside, hoisted aboard then individually thrown into the vessel’s holds. The whole operation could be more efficiently, safely and quickly carried out if the sugar were moved in containers.

Where ports have sufficient container terminal capacity and equipment to handle such equipment the change is under way, according to Mr Lafont. It is less likely in places such as Djibouti’s old port, where operations depend on vessels’ own, slow cranes. Bolloré has been awarded a concession to build and run a still larger, more expensive container port than the Doraleh facility at Point Noire in Congo-Brazzaville.

“In some more advanced ports in Africa now you can see sugar being moved in containers – and tropical timber is being containerised in places,” Mr Lafont says. “So we see a steady trend.”

Mr Santini particularly calls for infrastructure improvements to stamp out congestion problems such as those at the port of Luanda, in Angola, where ships often wait 30 to 35 days offshore for a berth.

However, there remain still more intractable problems in areas where government involvement is traditionally heavier. They include roads – though some private road projects are now starting – and customs.

Mr Singh says DP World sees problems such as the hold-ups to containers bound for Ethiopia across Africa. Reform of the manual systems used by many customs services is vital.

The port operators and logistics companies have some scope to intervene. Bolloré has pushed the Ugandan authorities to improve their customs service and has agreed to be a pilot user of a new, updated system, Mr Lafont says. Part of DP World’s parent Dubai World group has taken over running Djibouti’s customs service as a contractor.

However, the yards for marooned containers at Djibouti and other African ports look unlikely to be able to close soon. That will require a decisive, continent-wide change of approach.

By Robert Wright, Transport Correspondent

The Financial Times

Copyright The Financial Times Limited 2009