Mozambique

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Saving costs on logistics in Tete

Saving costs on logistics in Tete

Transport and logistics are the life blood of Tete, Mozambique
Transport and logistics are the life blood of Tete, Mozambique
GIGI GUIMBEAU

 

By : Frank and Lei Von Habsburg

www.prointelafrica.com

frank@prointelafrica.com

lei@prointelafrica.com

Companies in Tete have become well aware that when it comes to business, the old adage still applies – location, location, and location. It is our location, in this mineral- and resource-rich area, which has fuelled much of the recent growth of business. But by the same token, the location has also contributed to the recent decline and too many challenges that operators face – for example it is extremely difficult to get products to the market, urgent spares in quickly or large items in efficiently. There are ways, however that businesses can optimise logistics processes to reduce costs.

The best option in this current climate is to seek a seamless door-to-door service through the use of an experienced freight forwarder or transporter in conjunction with an effective clearing agent in Mozambique. Every operation needs planning, co-ordination and excellent communication, to ensure that all parties are aligned and moving in the same direction.

Planning is the next essential step in a successful logistics operation. Pre-shipping review of necessary documentation by both the freight forwarder and Mozambique clearing agent is essential to ensure documentation is correctly prepared. This review should include identifying standard tariff codes (which must be consistent with ones used by the export country), which in turn will allow your clearing agent to prepare a quotation, and this will then allow you to have funds available in-country to pay duties and VAT prior to cargo arriving. This will help you avoid demurrage and storage fees. Careful consideration must also be given to your choice of route. Whereas one route may seem to be the most direct, there may be more cost-effective options available when considering efficiencies at ports, borders or clearance location.

Duty Free exemption and SADC certificates, if applicable, are another way to maximise your cash flow and cut costs. Duty free and VAT exemptions are granted to companies holding Investment Centre (CPI) approvals and special economic zone certificates.  These give full exemption, but mostly on capital goods. Duty free exemptions can take two to three weeks to obtain so forward planning is required. From 2015, an SADC certificate grants full duty exemptions on all goods, however VAT is still payable. Care needs to be taken, however, that SADC-exempt goods are placed on separate invoices from non-SADC goods. Care also needs to be taken that all SADC goods are actually made in the SADC region, as discovery of one single non-SADC item on customs inspection can lead to invalidation of the whole exemption.

Effective customs clearing also plays an important role in saving money. The role of the Mozambique clearing agent begins at the very start of the process. After careful review of the pre-alert documentation, a Contra Marca or Mozambique Customs Manifest number is raised on the Single Electronic Mozambique Customs System - SEW (issued by shipping line or airline for sea and air cargo respectively). This will allow a truck to proceed through the border to the customs clearing point. Once entries are processed, customs dues can be paid.

Since the introduction of the SEW, enormous opportunities have come about to speed up the clearing process, none more so than when it comes to paying customs dues. Both clearing agents and importers may make direct EFT payments, taking just a few minutes and reflecting immediately with customs, through most Mozambican banks. Three working days is how long it used to take to clear a cheque between different banks. A good clearing agent may therefore bring down his cargo release time to anything from one day to a maximum of three days. Quick final document delivery is what will differentiate good and bad agents, and reduce overall costs.