How would you describe the evolution of IPSEN Logistics since starting activities in Morocco in 1995 under the name of Compagnie d'Emballage et Transport Maritime?
I arrived in Morocco when I was just 23. I was sent by the IPSEN Group to set up the business in Casablanca. The group had a clear focus on this region with an existing office in Tunisia and Algeria, and it wanted to open in Morocco. I started from scratch here with two people. In the beginning, we were extremely specialized in conventional sea freight and cargo, as well as project cargo. Over the years, we grew to 15 people, and now we have reached a setup of 120 people. We have developed many services, and much of that is in supply chain. We have our own logistics warehouse as well. Some 12 years ago, we shifted our focus to logistics with an investment of EUR10 million with a local bank partner. We are also a customs broker via our subsidiary IGT (Ipsen Group Transit) that was set up in 2003 to follow the growth of our customers and handle new high value industrial project.. Now, we are heavily involved in the entire supply chain; when a product is moving, we are involved. We transport either by sea, air, or truck. We have a trucking business that travels all around Europe. We have consolidation hubs in Europe for pickup, stuffing, and moving products around. We can move products from all over Europe with main hub in Gelsenkirchen, Stuttgart, Milan, Lyon, Paris, Madrid, Barcelona, or Marseilles on a weekly basis to Morocco. We also have our own bonded warehouse in Casablanca with a customs officer on site. The focus is on transporting, clearing, storing, and distribution. We have our own trucks for local distribution and logistics customers. When you talk about the supply chain, we are actually a one-stop shop solution.
As of January 2020, the logistics sector represents 6% of the national economy. What has your strategy been since the COVID-19 outbreak?
COVID-19 was completely unexpected, and we had to take some drastic measures to cope with it. You cannot stop the supply chain, logistics, or the transport of goods. We had to focus internally on all aspects such as sanitizers and masks. We also have a doctor on our staff who visits once a week. We made a mapping of all of our facilities and offices, and we trained our people so that they would respect social distancing and work with masks correctly, for example. In addition, 80% of our office staff have begun working from home. In the warehouse, things are more complicated, but we could not take any risks; we had 50% of the staff at home on a rotating three-shift basis. People do not come into contact with each other as much. If we discover a case, we can easily isolate the entire shift and bring another shift on. As far as business is concerned, international transport has dropped evenly. If you are not able to pick up cargo, you can't transport it, so we have seen a drop of about 35% in volume and activity. We also have a de facto drop in customs operations since all transport has a customs clearance file along with it. The positive sign is that logistics is still booming significantly; we are working heavily in logistics. We consider it a good thing that we have involved ourselves in all these different segments; when one drops, another climbs. The fact is our warehouses are full. It was a huge investment of EUR10 million, and we are still paying for that over 15 years, though we are certain it was the right decision to be made. This economic crisis pushes our innovation further. Very recently we developed a specific department dedicated to our e-commerce customers for the last mile delivery.
How would you describe the digitalization of IPSEN and the sector in Morocco?
IPSEN is extremely well digitalized in terms of its level of IT and computer usage. We have our own system for transporting, accounting, and customer service. All of these are linked to our server and the cloud, and we can all communicate easily with all our offices. With digitalization, some specific applications will come later on for some particular bases. We do not have any digital applications that all our employees use, though it is something we think about down the line. Morocco has been pushing hard for digitalization, especially from the customs authorities. Increasingly, we are sending package invoices and commercial documents into its online system. Even release orders, which are the titles of the properties of the cargo, are done digitally. It is available in the customs system, which we call PortNet. Morocco is a year ahead of what it expected with this digital advancement, and we attended weekly training sessions with the customs authorities to ensure a smooth adoption of the new technology. We are also a member of a circle of experts who diagnose and solve problems in the system. It is certainly improving significantly.
How do you evaluate the logistics sector in Morocco compared to the rest of the region?
One problem we are facing is the price of land and the cost of real estate. The Logistics Development Association of Morocco (AMDL) is currently in the process of identifying several zones with high priority and asking us if we are interested in some land there. AMDL is a major part of our focus in coming years, because it will be able to provide us land at an affordable cost and restructure logistics in Morocco by putting us in a dedicated zone. In Casablanca or Tangier for example, everyone has their warehouse, whether close to the city or far away in an industrial area, and for many years, there has been no focus on where we need to set up. Now, that is changing, which is a positive thing. It will mean that making an investment will be safe when you know you are in the right zone. The land will be affordable and we can focus on our business plan rather than scoping out expensive land in a zone we are not certain about. I am in close contact with the general manager of AMDL as well as all structured logistics operators, and we all give a lot of input to its strategy. It has open arms to everyone in logistics so that it can come up with the best solution for the next 10 years. The sector is definitely on track in this respect.
What are your goals for the year ahead?
In Morocco, there is a great deal of competition. There are perhaps 2,000 freight forwarding competitors in Casablanca alone. There are 800 competitors in customs clearance, 300 in logistics, and possibly 1,000 when it comes to local tracking and distribution. For many years, and still to date, the informal market is hurting us. It is working but does not pay any VAT, social security, or retirement plans. This is our first obstacle, which is extremely tricky, and we hope that in the coming years the authorities will focus on eradicating such activity. We cannot sell a container from Shanghai for USD2,000 when there is someone selling it for USD1,800 since they do not pay social security, and when they are caught, they closes down and open something new. Hopefully, the sector will be more formalized. We see it happening with the Association of Freight Forwarding of Morocco (AFFM). We have to focus on the fields where there is less competition and where we can provide the best added value for customers. We can figure out the best niche that will allow us to follow their growth. On a daily basis, we are investing in IT, maintenance, space, people, and everything else for our customers. This is the best focus for us for the next five years. We want to grow every day, increase our margins, buy better, get more trucks, and have a bigger space. The focus with AMDL is to sell our current warehouse so that we can build a bigger warehouse in a dedicated area. We will move from 20,000sqm to 50,000sqm, but it is a huge project that will cost a large sum of money and take a long time with banks. However, the bigger we are, the more we can reduce costs. The future of our scope is to be able to concentrate all our activities in the same area with customs process, logistics warehouse, bonded warehouse, free zone warehouse, distribution and dispatch center, etc,… that way, we can offer to the market all supply chain answers and mutualize the resources and costs to a high scale.