Tunisia, Algeria, Morocco – the Militzer & Münch Group is registering a marked increase in transports to the Maghreb region. In the past two years, the Militzer & Münch road transports from Germany to Morocco doubled, shipments to Tunisia even grew threefold. Customers also show increasing interest in transports from and to Algeria.

Association Agreements are in place between the European Union and Tunisia, Morocco and Algeria. Step by step, they are to be expanded and turned into Free Trade Agreements along the lines of a “Deep and Comprehensive Free Trade Area”. The relations between the EU and the Maghreb states Morocco and Tunisia are particularly close, although the two countries differ a lot in their economic setup:

• Tunisia is highly industrialized and has good infrastructure. As per gross domestic product, industry is the second most important economic sector. According to the German-Tunisian Chamber of Industry and Commerce, the textile and garment industry is the strategically most important industry segment. 83.6 percent of the textiles produced in Tunisia are destined for export.
• As a business location, Morocco boasts modern infrastructure and low production costs. Especially the automotive industry has grown over the past few years. The development of renewable energy sources is advancing steadily, too.
• The economy in Algeria relies essentially on the production and export of oil and gas. At this time, the exports from the oil and gas sector account for about 98 percent of the country’s foreign exchange revenue. The government aims at creating more jobs outside this sector.

The French concept for success

Militzer & Münch started its activities in the Maghreb region already 35 years ago. “Especially the France-Maghreb trade lane is an important pillar of the Militzer & Münch Group”, says Dr. Lothar Thoma, CEO M&M Militzer & Münch International Holding AG. Marseille is the Militzer & Münch Tunisia hub – Bordeaux and Pusignan (Lyon) serve, among others, as trans-loading terminals for Morocco. A substantial share of the Militzer & Münch France transports is routed via the France-Maghreb trade lane. “What our French organization has already implemented successfully, we plan to transfer also to our units in Germany and Switzerland”, says Dr. Lothar Thoma. “With the business development team that was appointed for these two countries in September 2016, we expect good progress for both trade lanes.”

In addition, Militzer & Münch sees high potential for traffics to Algeria. In August 2016, the Algerian government passed a new investment law which offers incentives to foreign investors. Especially customers who are active in plant engineering for the oil and gas industry, more frequently enquire about Militzer & Münch transports. At this time already, goods destined for Algeria are consolidated in Marseille, loaded into containers, and shipped to Algiers regularly. Other direct departures are offered to the Algerian ports of Oran, Bejaia and Skikda.

Eichenzell, the pivotal point

In Germany, the Maghreb transports are mainly handled via the branch office at Eichenzell. Under the direction of Uwe Bierfreund, Branch Manager at Militzer & Münch Stockstadt and Eichenzell, the Eichenzell team controls the operational processes as well as sales activities, and prepares offers. “Compared to the Far East, the proximity of the Maghreb region to Western Europe is a big advantage, especially for the textile and automotive industries”, says Uwe Bierfreund. “We mostly opt for truck transports, but offer our customers air freight and ocean freight solutions as well.” For the most part, Militzer & Münch handles transports for the automotive, machine engineering, chemical and pharmaceutical industries. The cargo consists of medical equipment and electronics as well as upstream products for textiles, and finished textile products.

Groupage shipments and larger part loads are mostly transported door-to-door via road. For example, the Eichenzell team consolidates the goods for Morocco by Thursday evening. On Friday, the truck departs for the port of Algeciras. The transport reaches Tangier in the night from Saturday to Sunday. The Tunisia shipments process is similar. From Marseille or Genova to Tunis the goods are transported via ferry. There are additional departures for dangerous goods transports.

Investing locally

“The goods that are consolidated at Eichenzell for the Maghreb do not come exclusively from Germany, but also from neighboring procurement countries such as Poland or Finland”, Uwe Bierfreund explains. The Militzer & Münch Group continually invested in company-owned infrastructure in the Maghreb over the past years in order to continue offering customers comprehensive services. Among others, Militzer & Münch built a customs terminal in Tangier, Morocco in 2016. With 10,000 square meters, the terminal offers additional warehousing capacity and enables fast customs clearance.

The solid infrastructure and in-depth know-how of the Militzer & Münch units in Tunisia and Morocco are important pillars of strength for the growing business in the Maghreb. “For Militzer & Münch, the Maghreb states are, and will remain, one of our core markets”, says Dr. Lothar Thoma. “With our experienced teams in the Maghreb, Turkey, France, Germany and Switzerland, we will continue to be optimally positioned, to offer individually tailored transport solutions for the different industries.”

China is well versed in mammoth projects. What the Chinese accomplished several centuries ago with the Great Wall is to be repeated in a similar way now. A gigantic investment package has been dedicated to the improvement of the transport network between Asia and Europe. Benefiting from the opportunities this entails, Militzer & Münch is developing new locations and road transport services in China and Central Asia. In some of the countries Militzer & Münch has already been operating for over 20 years.

The project to revive the Silk Road runs under the name One Belt, One Road (OBOR). For OBOR, China has set aside more than 100 billion dollars for the coming years. With this initiative – for the Chinese government, part economic and part political strategy – the Silk Road, which goes back to 2,100 years ago, is gaining importance again for today’s global transports. In ancient times, the route was already used for the goods trade between China and Europe. Yet it was not, as the name suggests, just one road strictly speaking, rather than a network of paths, major roads and secondary roads. They traversed countries that today are known as China, India, Pakistan, Afghanistan, Tajikistan, Kyrgyzstan, Turkmenistan, Uzbekistan and Turkey.

At that time, selling, forwarding and exchanging goods could take several years. Today, goods can be shipped from one continent to the other in just under 15 days. In ancient times, camels were the means of transport for overland transportation. Nowadays, they have been replaced by trucks and trains. An essential component of the OBOR initiative is the development of infrastructure. It comprises railway lines, roads, pipelines and deep sea ports. Moreover, huge industrial complexes are being built along the Silk Road, in China as well as in Central Asia.

In the Central Asian countries and in the Trans-Caucasian region, Militzer & Münch employs a staff of 200 – in China, the number of employees is 100. Militzer & Münch has a strong presence in China with seven operating branch offices, especially the longstanding branch office in Urumqi is an optimal gate for transports to Kazakhstan and Uzbekistan. The company aims at further reinforcing its presence in China and Central Asia as well as intensifying the traffics between the regions.

Bulking up business in China

By appointing new specialists to the management team, Militzer & Münch China took the first step towards expanding business along the New Silk Road. In September 2016 Glenn Bai was appointed Managing Director of the Chinese Militzer & Münch organization. At the beginning of the year, new colleagues were taken on board. Among them, industry experts Eric Wang, Director Rail Freight China, and Philip Wang, Director North China.

To further support the team, Militzer & Münch China hired Trade Lane Sales Manager Anna Boro in February. The focus of the Russian-born expert is set on the development of business between China, Russia and Central Asia along the Silk Road.

A new product has already been realized on the route from China to Central Asia: A container block train connects Xuzhou in Eastern China and the capital of Uzbekistan, Tashkent. For an industrial project, three transports were handled from China to Uzbekistan in January and February. The block trains carried steel coils in 20-foot -containers. Each transport only took 10 to 12 days from Xuzhou in the Jiangsu Province to Tashkent. On these orders, Militzer & Münch cooperated closely with sister company InterRail. Last year alone, InterRail operated approximately 280 trains from China to Europe along the New Silk Road.

“The One Belt, One Road initiative and the large sums invested in this context, we can expect to see numerous infrastructure projects in and around Central Asia”, says Glenn Bai. “We will take advantage of the opportunities to exploit the full potential of this highly promising market. Therefore we will cooperate with the Militzer & Münch organizations in Central Asia.”

Countries and projects

Militzer & Münch is one of the leading transport and forwarding service providers in Central Asia with locations in Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan. On February 1, Militzer & Münch set up a presence in Azerbaijan, too: A two-man delegation now handles local business. The market has good potential, mainly in standard transport business.

In Tajikistan, Militzer & Münch recently won two big projects. One is a long-term contract that comprises the delivery of the merchandise for a bed and furniture chain with six or more truckloads per month. In the initial phase in December and January, Militzer & Münch Tajikistan handled 17 road transports from Poland to Tajikistan.

The second project is for a hydropower station for which Militzer & Münch transports components. The water power dam is being built on the River Vakhsh that crosses Tajikistan from North to Southwest – it constitutes an important energy source for the country. Militzer & Münch will transport about 180 to 200 truckloads to Tajikistan, 30 of which with an over height of 3.4 meters (cf. “News in brief” in the PROJECTS section.)

In Kazakhstan, the economic situation is turning back to normal after the devaluation of the Kazakh tenge. “The market has become stable again and Militzer & Münch profits from the fact that transports are slowly increasing”, says Nikolaus Kohler, Regional Managing Director Middle East / Central Asia. “We feel optimistic that, especially after the World’s Fair Expo 2017 in Kazakhstan, project business will gather speed again.” In view of big Chinese e-commerce companies, which also count the inhabitants of Kazakhstan among their customers, the B2B business sector is growing. With its own CEP service in Kazakhstan, Militzer & Münch is optimally positioned for a growing number of shipments in this segment.

The logistics industry looks to Uzbekistan with optimism, too. Although owing to currency regulations, so far there has been scarcely any security for foreign investors. One can assume that new paths are opening up for the country under the leadership of the new President who was voted into office in December 2016. “Our hope is for the currently existing capital constraints to be relaxed step by step, which again would pave the way for investments”, says Nikolaus Kohler.

Overland transports save time and money

The Chinese government has already convinced more than 60 countries of its OBOR project. The overland route boasts two clear advantages over sea and air transport: Shipments by train take about 20 days less than by vessel and are much cheaper than by plane.

While precious fabrics, porcelain and oriental spices were transported along the old Silk Road, the New Silk Road is meant for the transport of electronics, branded products, automotive parts, textiles and many more goods. At this time, there are ten departures a week for the full container loads that Militzer & Münch and InterRail are transporting via rail from China to Europe and vice versa.