Abstract
The growing number of studies on the impact of transportation to tourism is often discussed without any mention of freight management companies. In Nigeria, the contributions of these companies are grossly misunderstood or even understudied. This paper highlightsthis gap in understanding by studying two prominent freight management companies in Nigeria, drawing lessons from their story to understand how these companies impact Nigeria’s transportation sector and the entire tourism economy. Adopting a documentary research approach, the study will draw insights from two Transport/Freight companies – Tropical Gates Limited (TGL) and Kratos Marinus Global Services Limited (KMGS), presenting practical implications for public and private sector policymakers, as they navigate this precarious time and chart a new path for transportation and tourism in Nigeria.
Keywords: Transportation, Freight Management, Tourism, TGL, KMGS.
Introduction
Nigeria, like many nations of the world, has had its fair share of the pains presented by the COVID-19 pandemic, which resulted in a nationwide lockdown that crippled economic activities for much of 2020 and left businesses with many doubts on how to navigate the recovering economic landscape in 2021. Since March 23, 2020 when Nigeria confirmed its first case of the disease, Government at different levels have continued to play their part in setting restrictions and providing different strategies to curb the disease’s spread.These restrictions included limiting religious, political and other gathering of more than 10 persons, closure of schools, ban on international and inter-state travels. Other such measures included guidelines for operating malls, offices and other public premises and the establishment of quarantine protocols for immigrants and travellers from high-risk nations and states (Dixit, Ogundeji &Onwujekwe, 2020).
Moving goods and people from one place to another is critical to economic prosperity and national cohesion. With a population estimate of 200 million people, a land area of 910,768 sq. km and a GDP-growth rate of about 6% per annum (World Bank, 2020), the significance of Nigeria’s transportation sector is readily seen. All these were set back by the COVID-19 pandemic, which brought the movement of people from one place to another to a staggering halt. Nigeria’s transportation infrastructure, which was already in a dismal state before the pandemic was hit hard by the lock downs that characterised much of 2020. Globally, Nigeria ranks low in the quality of its infrastructure which impacts the ease of doing business (World Bank, 2020). Government corruption and low investment in the transport sector resulted in the current infrastructural deficit. An estimated $15billion is required annually to adequately fund Nigeria‘s infrastructural deficits (Okeola and Salami, 2012). This prompted the Nigerian government to adopt the use of Private-Public Partnership (PPP) initiative in line with global trends for the revitalisation ofNigeria’s transport infrastructure. This initiative has allowed private individuals to begin investing towards the development of the transport sector. The development of road infrastructure via the PPP model remains the most prominent, while that of rail has just kicked off. Nigeria has also started the concessioning of its aviation industry, while its seaports industry has been more successful (Oghojafor, Kuye&Alaneme, 2012). The concessioning of seaports and waterways allowed for an environment where freight companies like Tropical Gates Limited (TGL) and Kratos Maximus Global ServicesLimited (KMGSL) can operate and excel, as testament to the increasing investment in the sector by private individuals.
In light of Nigeria’s economic crises expressed in its infrastructural deficit and exacerbated by the travel restrictions presented by the COVID-19 pandemic, what is the future of the transport sector? How do transport companies contribute to Nigeria’s transport sector and how can these contributions be sustained or improved upon in the post-COVID-19 era? What goals should Nigeria set for its transportation infrastructure? This article seeks to address these questions using the insights from two companies – Tropical Gates Limited and Kratos Maximus Global Services. Ideally, the future of the transport system, which is integral to tourism, should return to normalcy and even witness a boom as people and tourists regain their desire and freedom to travel or move goods and services.This article fills a gap in the understanding of how the COVID-19 pandemic impacted Nigeria’s transport system and freight management. It recognises that Nigeria, as a developing country, have socioeconomic difficulties that preceded the pandemic and it evaluates the current situation of transportation in Nigeria and the post-COVID-19 implications. Adopting a documentary research approach, the study will draw insights from two Transport/Freight companies – Tropical Gates Limited (TGL) and Kratos Maximus Global Services Limited (KMGS), presenting practical implications for public and private sector policymakers, as they navigate this precarious time and chart a new path for transportation and tourism in Nigeria.
Background Information on Tropical Gates Limited (TGL) and Kratos Marinus Global Services Limited (KMGSL)
Tropical Gates Limited (TGL) Tropical Gate was founded in September of 2004 by Apostle Mbaigbo Nnamdi as an accountable logistic Agent. At the initial stage, it took him the values of hard work and dedication to service as the founding principles of Tropical Gate Ltd. Tropical Gate headquartered in Lagos, Nigeria, has been providing logistic services for over 15 years. Initially founded as a traditional truckload carrier, Tropical Gate has diversified itself as a true logistic solutions provider and technology innovator, committed to delivering unique, high-value and customized solutions to its customers. Throughout the mid to late 2005, Tropical Gate expanded its core territory to cover the entire Mid-Atlantic region, growing both organically and through acquisition; as well as offering its customers logistic services. By 2006, Tropical Gate was operating in different states and had finished completion of its current corporate headquarters in Lagos, Nigeria. It was at this time that Tropical Gate Ltd broadened its services by unveiling a non-asset-based Logistics division to offer customers from 36 states of the federation capabilities through a strategic partner network. In 2006, Tropical Gate Ltd announced its intentions to merge with privately held LTL carrier, PITT OHIO, to offer both customer bases an unmatched network of asset and non-asset-based services for both LTL and Truckload.
The customer centric philosophies that brought the companies together serve as a backbone of the partnership, which continues to evolve today. Understanding the critical link in the customer supply chain, Tropical Gate Limited introduced on-board computing systems in each of its tractors in late 2007. This breakthrough enabled Tropical Gate customers the ability to track and trace their freight in real time on the company website; as well as providing up to the minute critical data events via email and electronic data interchange (EDI). Today, Tropical Gate Limited operates more than 50 tractors and 300 trailers in its terminal network throughout the West coast region. Our hybrid approach to logistic services provides our customers the flexibility in their supply chain to meet even their toughest challenges. Tropical Gate’s customer centric philosophy is centred on delivering high-value, cost effective logistic solutions that are truly customized to your needs.
KMGSL, on the other hand, was established by the same owner of TGL, Apostle Nnamdi Mbaigbo to carry on any business of general logistics services, transportation (except air and water transport), haulage contractors, garage operators, owners and charters of motor vehicles of every description, and carriers of goods and passengers by road. KMGSL is also carries on all over in Nigeria the business of importers, exporters, commission agents, general contractors, generaldistributors, business promoters, merchandise of all kinds including raw materials, finished or semi-finished products, solid mineral products, manufactured goods and petrochemicals.The company also engages in agriculture, including general farming and animal husbandry like fish farming, poultry, pig and snail farming, food processing and canning/packaging for the teaming populace.
The company’s filings with Nigeria’s regulatory body, the Corporate Affairs Commission, show that KMGSL is allowed to: engage the services of qualified personnel to build, fit and furnish any property for the purposes of letting same to visitors or guests whether in single rooms, suits, chalets, caravans, moveable structure, colleges or otherwise, to carry on all or any business of merchants and deals in motor vehicles, motorcycles, tricycles, or any automobile including trucks, trailers, equipment, caterpillars, earthmoving machines etc.; to carry on business of general automobile sale,importation, marketing and distribution of motor and its spare parts, to assemble, construct, manufacture, buy, hire and rent of all types of passenger’s cars, commercial vehicles and motorcycles of all kinds; and to borrow or raise money in such manner as the company shall deem fit, and in particular by the issue of debentures or debenture stock (perpetual or otherwise) and to secure the repayment of any money borrowed.
Literature Review The introduction of railway laid the foundation for modern tourism, followed by the revolution of the automobile, which changed the style of regional and inter-regional tourism. International tourism was made possible soon thereafter by innovations in long-haul air transportation, which allowed for tourism in previously unreachable destinations (Chew, 1987). New modes of transportation have revolutionized the tourism industry by improving distance-travel capabilities, travel speed, travel time, and comfort level. It has been noted that while different forms of motorized transportation are preferred for modern travel because they save so much time, cycling or walking at the destination can provide tourists with satisfactory on-site experiences (Lumsdon 2000). Water transportation, especially ferries and cruise ships, have also gained increasing patronage from tourists who not only view them as means of transportation but as tourism destinations (Tang and Jang 2010, Davenportand Davenport 2006, Hanh 2006).
The exact impact of transportation on the tourism industry is sometimes underestimated largely due to the absence of empirical evidence until recently. Van Truong and Shimizu (2017) offered a proper assessment of this impact by reviewing the application of computable general equilibrium (CGE) models in empirical studies, assessing the impact of transportation factors on tourism. They reviewed 69 research articles papers that were searched via Google Scholar, Web of Science, and Scopus, with publication dates ranging from 1960 to 2015. Among the 69 papers they reviewed, they found that only 2 papers (3%) assessed the direct interaction between transportation and tourism, exposing the dearth of research in this area.Transportation is integral to the development and success of the tourism industry. According to Sorupia (2005), transportation is responsible for bringing tourists to a destination, taking them around the place and helps the tourists return at the end of their trip.Transportation provides access to tourism sites and tourism experience can be impacted by the transport system of a tourist destination, which also impacts tourists’ decisions on how and where to tour (Page and Lumsdon, 2004). On the other hand, Sheffi (1985) noted a paradoxical scenario where improving transportation infrastructure may decrease accessibility to tourist destinations, as there could be higher costs of this new system of transportation (e.g., rail, or flight). But in general, access to a tourist destination is usually improved when the transportation infrastructure network is developed (Ana-Maria, 2018; Litman, 2008).
Although the role of transportation in tourism has been widely acknowledged in the preceding literatures, research measuring the contributions of freight companies on tourism development, especially in a post-pandemic era is scarce.
Contributions of TGL and KMGS to Nigeria’s Transport/Freight Management System
Freight refers to any item, goods or cargo transported by train, ship, airplane or truck often over long distances. Freight management involves the strategic and efficient moving of freight from a point of origin to a desired destination. Freight management companies are on the lookout for opportunities to optimize the movement of cargo to reduce cost, reduce transit time and improve delivery performance for themselves and their clients. From these definitions, it is not hard to understand how freight management systems impact the tourism industry. According to the International Air Transport Association (IATA), in 2014, airlines transported 3.3 billion people across a network of almost 50,000 routes, generating 58 million jobs and $2.4 trillion in business activity (International Air Transport Association, 2014a).This number unfortunately doesn’t give the exact figures for the number of goods and cargo transported by air. Considering that freight management covers all modes of transport, one can rightly imagine the enormous impact this can have on the movement of tourists’ cargo and other goods used by the desired destination to make the tourists comfortable. In Nigeria, in particular, where the freight management system is being driven mostly by private entities like Tropical Gate Limited (TGL) and Kratos Maximus Global Services (KMGS), there have been notable benefits to the tourism industry. In the subsequent pages, these benefits will be discussed in the context of the services provided by both companies. They include enhanced accessibility/mobility, proper logistics management, employment, efficiency.
• Accessibility/Mobility
The primary and most important aspect of an economic activity is mobility. The reason is that it satisfies the vital need or desire of going from one place to the other. There is also the need for mobility that is shared by passengers, freight and information. Most regions in the world do not share the same level of mobility and this is because other regions are more developed than the others in regard to the different modes of transport in those regions. Economies that possess greater mobility are often those with better opportunities to develop than those with scarce mobility.Where there is reduced mobility, it is evident that development and enhancement of regional integration will be hindered while greater mobility is a catalyst for development and regional integration. In any given region, economic development and regional integration is indicated by the mobility levels in that region. To provide this sort of mobility to the different players in the economy in providing employment, offering services to customers, investing the capital and generating income, great strides have been achieved by companies like TGL and KMGS.By using a combination of sea and air freight, both companies bring added flexibility to the supply chain. Agility helps companies find the right cost-time balance, maximizing the affordability of ocean movements and the speed of air shipments. TGL and KMGS have partnerships with the world’s most reliable sea and air carriers, so they can offer seamless shipping from origin to destination, for one rate, under a single document. Their freight professionals identify the forwarding and logistics services that are best to help clients like tourist destinations and tour operators meet their objectives. They also offer personal services and a broader range of freight products to ensure clients’ supply chains find the best balance between urgency and cost.
For example, where a tour company wants to transport 100 vehicles, special transport or heavy-duty transport, on the national overland route or across borders – TGL and KMGS can provide them with the following professional and reliable transport solutions: Fleet of more than 150 trucks including mega trailers, Transport with open double-decker trucks, Transport with closed trucks, Transport by low-loader truck, Collection by the lessee and Telematics systems. They also take care of customs clearance and arrange transport insurance. They also handle combined sea and air imports from Asia, Middle East and Oceania, offering fast and reliable services. Their range of maritime transport services includes customs clearance of all kinds (import and export), the organization of on-carriage and off-carriage, the arrangement of transport insurance, terminal processing, and the booking of shipping space or chartering, through to ship spare parts logistics. Finally, they can take care of the regular transport between warehouse and production for clients, as well as internal transport. Naturally, freight companies synchronize the schedules precisely with the timing of production and adhere to them. Employing modern fleet vehicles, Kratos Maximus Global Services (KMGS) and Tropical Gate Limited (TGL) selects the optimal means of transport depending on requirements, size, and functions. They then develop an individual concept for clients that are tailored to local conditions, such as existing ramps, roofing, or space requirements.
Accessibility can be measured as the quantity of economic or social activities that can be reached using the transport system. Improvement in accessibility will increase the market size for manufacturing, tourism and/or labour, leading to increased competition and/or centralization. On the other hand, the impact for the region concerned could be both positive and negative, depending on its initial level of competitiveness. The economic importance of freight companies can be assessed from a macroeconomic and microeconomic perspective. In many cases, the objective of transport infrastructure investment is to improve the accessibility of a given region by reducing travel time or increasing the potential to travel, and freight companies like TGL and KMGS have shown they can contribute significantly.
• Logistics
Modern logistics is more than the smooth exchange of goods and information. Smart and sustainable business requires the skills of logistics experts who are able to think ahead. Professional full-service logistics providers like TGL and KMGS live this approach. From procurement to delivery and from individual shipments to mass distribution, they develop individual solutions for the entire supply chain. Carefully thought-out, tailor-made logistics solutions and a perfectly synchronised transport network guarantee a decisive competitive head start. Intelligent warehouse logistics also ensures optimal stock levels as well as a rapid flow of goods. Tropical Gate Limited (TGL) and Kratos Maximus Global Services (KMGS) have complete and scalable service of logistic procurement and administration that ensures safe delivery of freight ontime.
TGL and KMGS offer an effective suite of logistic services by leveraging large volume and established contracts with a national network of carriers. These solutions include centralized visibility to track and trace data and standardized operating procedures. Another unique aspect is that performance standards are written into every carrier contract, leaving no guesswork about their customer requirements.TGL and KMGS partners with top companies like Hexagon, Royal Resort, Construction Solutions, Plusinfinity and Overseas Transport to ensure that they take care of all logistic needs of their clients. Clients may decide to outsource their fleet in order to achieve higher efficiency and better focus on their core business. TGL and KMGS have experienced team of logistics professionals across all functional areas, including operations, finance, load planning, dispatch, customer service, and carrier management, ensuring the consolidation of clients’ loads and shipments.
• Employment
Employment is one key area where transportation companies like TGL and KMGS generate as part of their corporate social responsibility to the society. Direct and indirect employment linked to the operation and maintenance of freight management infrastructure is largely related to the level of patronage.The additional value and employment effects of transport services usually go beyond employment and the additional value generated by that activity; indirect effects are significant. A case in point is where a transport company opts to acquire a part of their inputs from a local supplier. The production of these inputs generates additional value, market and employment in the regional economy and the suppliers in turn purchase goods and services from other local companies in the region. Likewise, households that receive earnings from employment in the transport industry also use some of that income on goods and services produced locally. Because of this sort of spending, more local jobs are created for the youth and therefore growing the economy of the member countries which ultimately grow and enhance regional integration. Generally, the economic impacts of transportation can produce direct, indirect and related employment opportunities.
• Efficiency
In the freight management industry, efficiency is determined by mobility from one point to another. The time taken to access various points of production and cost savings arising from the transport infrastructure would allow productivity gains to be achieved by improving their production and distribution. Another important determinant of efficiency is the ability to package goods and services being transported from place to place. Transport packaging must take into account the possibility of multiple stages in transit before the product reaches its final destination. This includes multiple off-loading, re-packaging, re-loading and possibly storage of the product(s). Thus, TGL and KMGS ensure that packaging is made versatile enough to facilitate this process when necessary. First and foremost, transport packaging serves to protect goods in transit. Given the nature of road and rail infrastructure, transport packaging is being manufactured to absorb unintended shocks, impacts or accidents of any kind, as well as protect against the elements such as humidity, excessive temperatures or heavy weather. Both companies ensure the packaging and the product itself are a perfect match, in terms of the product’s size and dimensions.
Warehousing is another yardstick for measuring efficiency in the freight management business. The Storage and 3PL services offered by Kratos Maximus Global Services (KMGS) and Tropical Gate Limited (TGL) have become an integral part of their client’s requirements. As clients continue to demand increased savings and efficiencies in their businesses, and as supply chains have become shorter with ‘Value Added’ services becoming standard practice, the multi task functions carried out by both TGL and KMGS include warehousing and storage. Their specialty includes providing customised storage solutions for customers – available warehousing space across their global network. Whether one requires short-, medium or long-term warehousing, their multi-user facilities provide scalable solutions that share the cost of resources. They take care of warehouse operations and labour functions, making the most of the client’s facility while the client is able to focus on their core business. Their complex network of branches and agents in Europe and overseas can provide global freight forwarding services. Interestingly, TGL and KMGS both have agents trained in air safety to ensure the smooth handling of their air freight. From the order confirmation, to project cargo, through to customs clearance, their ISO-certified, competent and multilingual team can help advice clients professionally.
Conclusion
This theoretical commentary has explored the contributions of freight management companies to the transportation and tourism sector in Nigeria. Having recognised the unique situation of the country as the financial hub of an emerging economy that is highly populated, contains a poor transportation infrastructure and a huge informal economy, this paper shines light on Tropical Gate Limited and Kratos Maximus Global Services, two freight management companies, and the implications of their services on tourism destinations, tour operators and tourists themselves. Globally, as people’s lives and livelihoods are being affected as a result of restrictions on movement due to COVID-19 (Mogaji, 2020), it is important to consider the roles freight management companies can play as alternative forms of transportation and as key players in the supply chain of every nation’s economy. This study contributes to the academic literature on the less-discussed contributions of freight management companies on the transportation sector and Nigeria’s wider tourism industry.
