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Transportation and Logistics: The New Frontier for a Sustainable Supply Chain
In March 2019, I was lucky to travel with a Dutch delegation to Côte d’Ivoire and Ghana for their first cocoa trade mission in a decade. The Netherlands is deeply connected to these two African countries through the trade of cocoa beans. The cocoa mission was organized by Port of Amsterdam International, a member of the World Cocoa Foundation.
Improving cocoa logistics was high on the agenda as part of a shared ambition to further develop a sustainable cocoa supply chain.
Cocoa Mission 2019
A majority of the beans go to the port of Amsterdam, where beans are processed into derivative products like powder, liquor, and butter in various grinding facilities located in the nearby Zaanstreek area. The purpose of this cocoa-focused commercial mission was promoting both trade and development. These widely endorsed objectives were reflected in the broad scope of the delegates, which included 46 representatives from provincial government, municipal councils, the business community, the port, research and educational institutions, and non-governmental organizations (NGOs). During the five-day program several meetings took place with (e.g.) government representatives, the Conseil du Café Cacao in Côte d’Ivoire, the Ghana Cocoa Board, and authorities of the Ivorian ports of Abidjan and San Pedro.
Cocoa Supply Chain Logistical Challenges
Participants were excited by the Ivorian Government plans to make large investments to improve transport and logistic systems. Dr. Abdel El Makhloufi of the Amsterdam University of Applied Sciences in the Netherlands noted that these investments are much needed. For the World Bank, Dr. El Makhloufi studied the logistics of the cocoa supply chain in Côte d’Ivoire, focusing on the leg from the farmer/production locations to the port of San Pedro. He noticed that the cocoa sector in Côte d’Ivoire faces major logistical challenges. The main reasons for the disrupted accessibility between the farms and the port are:
- The inadequate physical conditions of roads.
- The inefficiency of freight transport by road: once the cocoa is dropped off, the trucks return empty.
- Unnecessary checkpoints along the road, resulting in delay and congestion.
- The low speed of the trucks with on average 35 km an hour on primary roads.
Transportation challenges also affects the carbon footprint of the supply chain: the majority of trucks transporting cocoa are second-hand and have low quality fuels and high maintenance costs. This results in high greenhouse gas emissions.
From the Farm to the Port
There are more than 102,000 farmers in the region of San Pedro who rely on cocoa for their main source of income. How do they sell their cocoa beans? El Makhloufi’s study shows a complex configuration and structure of the supply chain, which is composed of three main multiple logistics chains and networks, with each their own structure, functions, challenges, and opportunities: sales of the beans goes via ‘pisteurs’ (middlemen), cooperatives, and exporters or processing companies.
On March 13, 2019, El Makhloufi presented his findings to representatives of the Port of San Pedro and local government, as well as the Dutch delegation of the cocoa mission. The positive message was that if improvements to road infrastructure are to be made, growth in both volume and value will be substantial. Simulation models show that reducing checkpoint frequency can lead to a value growth of up to $800,000 in just one year. Improving the road infrastructure can lead to an increase in productivity by 27%. Both measurements will also reduce pollution.
Conclusion
Port of Amsterdam International works together with the Port of San Pedro to improve reliability and efficiency in the cocoa chain, in association with supply-chain partners. The next step is to continue studying the challenges of the cocoa supply chain. An interesting opportunity is to map the carbon footprint of the transport of cocoa beans from the production location to the port of San Pedro. Local transportation is an important and under-emphasized part of the supply chain which can lead to significant improvements in terms of sustainability.
Read the ‘Towards A Sustainable Agro-logistics in Developing Countries: The Case of Cocoa Supply Chain in San Pedro Region in Côte d’Ivoire’ report here.
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