Prosper

The cargo business

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Charles Kareba stressesa point about his entrepreneurial journey during an interview at his offices in Kampala. PHOTO BY Dominic Bukenya 

By Dorothy Nakaweesi

Posted  Tuesday, July 22   2014 at  01:00

In Summary

Growing the company. Charles Kareba started the company with a total of Shs5 million and this has seen company’s annual earnings rise to more than Shs500 million depending on a good year of business.

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A principled gentleman, judging from his respect for time and neatness of his office at Buganda Road, is Mr Charles Kareba, the managing director and founder of Kargo International Ltd, a Clearing and Forwarding Company. A job he has been doing all his work-life of 42 years.
Kareba was born in 1949 in Ntungamo District. He is the last-born in a family of six. Kareba and his elder brother who later became his guardian are the only surviving children in their family.
In 1956, his elder brother who is a school bursar at Kings College Budo visited his parents and realised the young Kareba as a spoilt child because he was the last born. He decided to take him away from his parents.
He took him to school to raise him in a decent environment away from the village life of keeping around their father.
“Our father was illiterate and only knew about his cows and two wives,” Kareba narrates.
Since then, Kareba became the elder ‘son’ in the home of his brother who took him to Mbarara Junior School, Kings College Budo, Teso College and later to Helsinki School of Economics and Business in Finland where he pursued a diploma in export marketing.

First job
When he returned to Uganda, he got a job with Uganda Co-operative Central Union-which was the apex body catering for all unions in the country then. He was heading the export division.
Later when former President Idi Amin took over power, an opportunity came up at Trans-Ocean Uganda where jobs were advertised.
“I applied for the post of exports manager and got the job. Since then, I have never looked back,” he recalls.
Since 1973, Kareba has been clearing and forwarding imports and exports.

Experience
It was a policy at Trans-Ocean that export managers had to be based at the port to get hands-on experience on how to clear cargo.
“We used to clear cargo using fork-lifts and by then, there were no containers yet. At times, one would use their hands to lift cargo. We would work 24-hours and it was normal to be at the port at 4:00 a.m.,” Kareba recalls.
The beauty then, they were operating under the first East African Community with no border posts, or road blocks to delay cargo from being transited to the respective destination.
The training skills he got prepared him to start his own company.

Scope of work
Working at the ports then taught him how to operate fork-lifts, drive trucks and lift cargo because the business of sitting in office and waiting for others to do the job were not there even when you were a manager.
“Work was smooth, as there was no bribery of any nature, however things changed after the collapse of the first East African Community and corruption started creeping into the operation,” he recalls.
As a manager, he would earn Shs3,200 which was enough for one to afford a car and also live a decent life. Because of this good pay, everybody concentrated on performing and delivering.
He adds: “What hurts me was the collapse of the EAC. A train would leave Kasese heading to Mombasa without anybody asking where it was going; there was one currency (East African Currency) with a single exchange which never changed.”
When the old EAC collapsed, people had to look for work permits to be able to operate in the neighbouring country.

Kargo International Ltd starts
While with Trans-Ocean, he had an opportunity to work at the Port of Mombasa until 1987 when there was a political problem between Uganda and Kenya. Because of this, Kareba’s employers transferred him to work at the Port of Dar es Salaam until 1992 when came back to Uganda.
His dream of becoming his own boss came to fruition in 1994 in April. Together with his friend, they established Kargo International Ltd (KIL).
They have been operating at their office at Buganda Road-Opposite Buganda Road Court for the last 20 years.
However, because his colleague was more involved in communication, he later became a dormant partner. So Kareba was left to run the business.

Capital
He started the company with a total of Shs5 million and this has seen company’s annual earnings rise to more than Shs500 million depending on a good year of business. He currently employs 18 people to do the work. Among these employees, some have been there since inception while others have worked with him for more than 10 years.
He deployed one at Malaba Port; four at Entebbe airport and the rest are based at his office in Kampala.
However, what they were getting would have tripled but when Uganda Revenue Authority streamlined its operations, many people went underground and this has affected business.
“We would earn over Shs130 million from just one client a month then. But now, we earn about Shs40 million. Business has gone down,” Kareba adds.
He explains that 2013 was his worst year because Uganda’s economy went through several challenges.
Luckily, business has picked up.

Clients
The company has a chain of clients they offer their services. Currently, they have 21 clients including; Toyota, Civil Aviation Authority, CMC Motors Group Ltd and Kilembe Mines, among others. The company also represents companies (Cargo Associates) from outside Uganda whom they help to handle their cargo imported into the country.

Who is kareba?

He is the chairman of Uganda Freight Forwarders Association.
He is also a Trustee of the regional body FEAFFA. He sits on the Board of Directors of the Central Corridor whose Secretariat is based in Dar-es-Salaam.
He represents Uganda in EAC, COMESA, and WTO
KIL is Fellow Institute of Freight Professionals.
Membership
FIATA (International Federation of Freight Forwarders Associations)
UFFA (Uganda Freight Forwarders Association) -USC (Uganda Shippers Council)
FEAFFA (Federation of East Africa Freight Forwarders Association)
KIL is one of Monitor Publications Limited Top 100 Mid-Size Company Winners
Awards
Rated 6th in the 100 Top Mid-sized companies in Uganda
Awarded Top 100 Companies trophy

Challenges

His biggest challenge in doing business has been dealing with incompetent customs officers, but he appreciates that URA has come out to train its employees although more needs to be done.
He says most of the traders he works with are still ignorant about the clearing business yet go ahead to pay huge sums of money and end up being duped.
Expensive loans to help one run a business especially when they receive big orders is the other challenge he experiences as a clearing agent.
“Getting a loan to beef-up your operations is very expensive in Uganda now. Borrowing money at 18 percent is too much, so you end up working for the bank through high interest,” Kareba shares.

Advice

Kareba advises that to start a clearing and forwarding business, look out for trained people and understand the business. This will save you from making unnecessary mistakes.
“This business involves service delivery and accountability so if you happen to lodge in documentations with mistakes, it impacts on your credibility before your clients,” he stresses.
Secondly, a clearing and forwarding business will prosper if you choose your clients carefully.
“Many would want to take short-cuts but this will tarnish your name,” he warns
Additionally, the location of business has to be accessible to your clients and communication should be your priority.
Asked how he has managed to keep this business afloat over these years, he says his secret has been in hiring and retaining his employees.
“I have had the same employees who are now experts in doing their work and clients understand them,” Kareba shares.
Have a location. Kareba says it is important to deal with someone who has a physical address rather than depending on briefcase agents.

dnakaweesi@ug.nationmedia.com