Local firms outmuscled in freight business

Indigenous freight forwarders, mainly engaged in customs brokerage, ship husbandry and ancillary port services, are losing business to foreign competitors operating in the country largely because of unfair trade practices.

“We have seen contracts of Ghanaian freight forwarders cancelled not because of non-performance but simply on account of privileged information and undercutting offers that are offered by shipping lines to their agents to beat the competition.

Currently, foreign entities in the freight logistics sector are pushing to be free from equity ceilings and to have access on a non-discriminatory basis to all port and ancillary services,” Kwabena Ofosu-Appiah, President of the Ghana Institute of Freight Forwarders (GIFF) said at the 20th Annual General Meeting of the Institute.

According to him, in the face of current market liberalisation in the global freight business, the paucity of resources has come as a handicap to local industry players as any policy of non-discrimination to foreign entities is, in reality, discrimination against indigenous firms.

He bemoaned the lack of an effective institutional oversight that has led to the abuse of market power by foreign entities in the country’s trade setup.

“Governments all over the world shield, nourish and grant indigenous businesses certain benefits to enable them to ward off non-native competition and it is in this regard that we are calling for regulatory reforms to strengthen governance capabilities in the direction of international trade,” he said.

Ghanaian companies that used to be at the forefront of the shipping agency business, he said, are now being outmuscled by their foreign competitors as a result of certain unfair trade practices.

There are several instances, Mr. Ofosu-Appiah said, where shipping companies with affiliates engaged in haulage locally have been offered exclusive rebates and other incentives to the disadvantage of the indigenous competitors.

According to the GIFF boss, the Ghanaian freight forwarder, as it stands now, is largely at a disadvantage as a result of the cheap, long-term capital and diplomatic support that foreign businesses that are operating in the domestic freight logistics sector enjoy.

Trade and Industry Minister, Ekwow Spio-Garbrah, in a speech read on his behalf, confirmed that his ministry had identified the need to develop a competition policy to manage the current situation.

He said efforts at promoting the development of indigenous small and medium enterprises in the freights logistics industries has become necessary as a result of the high levels of concentration and conglomerate structure of transnational companies operating in the sector.

“There is a very strong indication of the need to introduce measures that foster competition in the country to facilitate the attainment of the social objectives associated with development.

The passing of a Competition Act is the very first step; this will be followed by the creation of an institutional and human capacity needed for effective enforcement,” the minister said.