Context
A mid-sized logistics company in Ivory Côte d'Ivoire sought to expand its inland container depot (ICD) network to improve trade efficiency between the port of Abidjan and landlocked neighboring countries.
The $8.5M project involved developing a new ICD hub with customs clearance facilities, bonded warehouses, and digital tracking systems.
The company lacked both the operational expertise in customs integration and the financial leverage to secure the required investment. A strategic partnership was essential to unlock the project’s potential.
Challenges Identified
1 – Limited Operational Synergies
- No established partnerships with shipping lines, freight forwarders, or customs authorities.
2 – Financial Gaps
- Insufficient equity to secure commercial bank loans without significant collateral.
3 – Technology Integration Issues
- Lack of digital systems for cargo tracking, billing automation, and customs clearance integration.
4 – Risk Perception from Investors
- Concerns about market volatility and dependency on regional trade volumes.
CARMINVEST Advisory Approach
Step 1 – Strategic Partner Identification
- Identified potential joint venture partners including a regional freight forwarding firm and a private equity logistics fund.
- Structured partnership terms ensuring aligned incentives and shared risk.
Step 2 – Business Model Optimization
- Redesigned revenue streams to include storage fees, customs brokerage services, and value-added logistics services.
- Implemented a performance-based contract structure with service-level guarantees.
Step 3 – Financial Structuring
- Proposed funding mix:
- 40% equity contribution from joint venture partners.
- 40% development loan from a regional trade finance bank.
- 20% grant funding from a trade facilitation program.
Step 4 – Technology & ESG Integration
- Integrated a digital logistics management platform with real-time tracking and customs API connectivity.
- Implemented an ESG framework to measure reduced CO₂ emissions through optimized cargo handling and reduced truck idle time.
Impact
- Reduction of cargo dwell time from 12 days to 5 days.
- Annual handling capacity increased by 150,000 TEUs.
- Creation of 85 direct jobs and 250 indirect jobs.
- Reduction of over 1,200 tons of CO₂ annually through improved logistics efficiency.