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As global supply chains face ongoing disruptions, European companies are rethinking their sourcing strategies. According to Maersk, a recent whitepaper revealed that over 64% of European firms have changed how they source materials to deal with supply chain instability. Beyond shortening supply chains, companies want more flexibility and less reliance on single sources.
In this context, Morocco has emerged as an alternative sourcing location for 4% of European companies. Located on the periphery of Europe, Morocco is the third African exporter to the EU. Yet the North African country runs a trade deficit, with $71.51 billion in imports and $41.15 billion in exports to the EU in 2022.
Morocco’s Growth Prospects
In African trade, Morocco is becoming a strategic hub for the North Africa region and the entire continent. It holds the continent’s 5th largest GDP, which is projected to grow 4.8% by 2026 after overcoming a downturn in 2016.
Low labor costs and business-friendly policies aided its recovery. Although Morocco accounts for just 1% of total EU goods trade, 56% of its exports go to the EU. From manufactured goods to agriculture and fuel, Morocco can be a cost-effective partner for various European industries in need of regional suppliers.
Despite the existence of a free trade area between the EU and Morocco for over 20 years, there is still room for trade expansion.
Supply chain turmoil from COVID-19, geopolitical tensions, and recession have made African countries more attractive, especially given continental free trade pacts. But for European firms to capitalize, connectivity between Europe and Morocco must improve.
Bridging Morocco and Europe
With over 96% of Morocco’s international trade by sea, ocean transport was key for linking to Europe. As home to the increasingly critical Tanger Med Port, the second largest African container port, Morocco has infrastructure to connect its north and south. However, its Logistics Performance Index of 2.54 indicates room for inland connectivity growth.
Maersk’s new Morocco Bridge solution addresses this need, argued Emilio de la Cruz, Managing Director of South West Europe. “We wanted to find synergies within the current network and our current customers and identify where we can add the piece that is missing,” he explained.
This multimodal service combines rail and truck transport across Morocco with a thrice-weekly ocean shuttle from Tangier to Algeciras, Spain. It then connects to the continent via additional multimodal services. By reducing congestion and emissions without sacrificing speed, this new route can unlock EU-Morocco trade growth.
“Our customers doing business between the EU and Morocco work in specialty industries with tight deadlines and short lead times, and our solution had to reflect that – we needed to switch from talking days of lead time to hours,” de la Cruz noted.
Besides the short-sea shuttle, Maersk launched a new Barcelona-Southern France rail offering. It also continues investing in special equipment to mirror cargo flows into the continent. “Our goal is to work within the existing infrastructure to connect the dots and better connect not just Morocco and Spain, but also the rest of southern Europe,” de la Cruz concluded.
