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PIL's Moll: Egypt needs to get off the news

Owner Representative of PIL Logistics Urs Moll talks about logistics-trends in Egypt & how democracy is a luxury that very few countries can afford.

In January 2012, the Agility Emerging Markets Logistics Index reported a decline in Egypt’s “logistics efficiency”, although Egypt offers one of the top 10 sea freight trade lanes and is expected to have a bright future in this segment.

Egypt Business Directory decided to get some advice on how to enhance this particular sector and other pillars of the economy.

After finishing his apprenticeship in Europe, Urs Moll voluntarily left Switzerland to work in the Middle East, and finally ended up as the Owner’s Representative of Pacific International Lines Pte (PIL) for the East Mediterranean and Black Sea Region. Having worked in Egypt’s logistics sector for over 30 years, Moll has slightly different insights on the Egyptian status quo than other expats.

He recalls a time when there were only three companies in Egypt dealing with clearing and forwarding – back in 1975. The only tasks those organizations received were from embassies and institutes, because there was no private sector at the time. When former President Anwar ElSadat introduced the open-door-policy, the logistics-business started to grow, especially in cooperation with the petroleum sector.

Currently, the future lies in Third-Party-Logistics - the outsourced logistics activity that goes beyond the classical clearing and forwarding that people have been doing for the past 100 years. Today, forwarders try to control the cargo from origin and arrange the shipping from beginning to end.

“Companies do not want to waste their effort away from their core activity. A firm in the fashion-industry – for instance – does not want to worry about organizing the packaging and distribution of its products, but it wants to create something that sells,” Moll explains. This is why more and more local companies hire forwarders, following the example of the experienced multinational companies.

When talking about the shipping sector, Moll advises Egypt to focus on building one mega-port that would serve the Suez Canal and the Mediterranean Region. “Currently, the country has too many little ports, with too little capacity and a lack of efficiency. Egypt should invest in one big port that can handle the traffic, just like Singapore. For instance, why are shopping malls a success? Because a mall is a concentration of one certain service. The competition is all in one place, but they’re all making money because the mall attracts people and is efficient. Same goes for ports.”

When asked about the main challenges that face the local logistics sector at the moment, Moll confidently explains that in the logistics sector every problem is an opportunity – otherwise, companies would not need logistics companies to take some load off their shoulders. On the contrary, logistics firms flourish in countries where there are a lot of transportation problems, and obstacles are mostly the reason behind their success.

Yet, bureaucracy and the civil servants’ attitude in governmental organizations today are the main factors that need to be enhanced and worked on. “Egyptians always complain about their governments not doing anything for them, especially with those appointed in the past two years, but actually the people’s attitude needs to change first,” Moll highlights. “Egyptians are not born corrupt, but civil servants are forced into corruption due to their gaunt salaries. The attitude itself can only be treated and fixed from the grassroots upwards.”

However, this does not mean that the government has no responsibilities in the business sector in the coming period: “The government needs to turn a page with the businesses, be more pragmatic with the subsidies that they are giving and be determined with their decisions and actions.” Moll admits that the main industrialists and business tycoons in Egypt were very much associated with the old regime, but he believes that all Egyptians were guilty of using their influence in one way or another. “It does not matter how these people made their money until now, because they created something that is employing people and stimulating the economy. If you chase these people away, they will go abroad.”

He also believes that the solution to all political problems in Egypt can be found in a stable economy: “The government should talk much more about the economy than they are now, and much less about all the other stuff. If they bring forward the economy, they can do whatever they want and nobody will care, even if they bring a Salafist as a president. Democracy is a luxury that only very few countries can afford and the foundation of any democracy is a stable economy.”

“Same goes for investors: Foreign investors do not really care about the type of government that is ruling Egypt, but rather about the country’s stability. They want to see a climate that brings this country forward,” Moll adds. “Simply, Egypt needs to get off the news.”

He concludes by stating that what Egypt is experiencing at the moment is a natural process, and in the future, one will look back on it as a speed-bump. “Egyptians love the drama and keep putting themselves down by focusing on their negative aspects and traits. This is wrong. There are so many positive factors in this country and it is about time to focus on them.”