High logistics costs damage SA’s international competitiveness
Thématique :
sud afrique
South Africa needed to evaluate its high internal logistics costs across all levels, and address issues of inland and cross-border transportation if it was to improve its ranking on the World Bank’s Logistics Performance Index, which ranked the country 24th out of 150 countries.
In terms of logistics expenditure, however, South Africa ranked 124th out of the 150 countries reviewed.
This was attributed to a number of logistics hurdles, including inadequate infrastructure and processes at ports and borders, but mainly to the rising fuel costs, increased road freight volumes, and South Africa’s competitiveness in overland transportation, the Council for Scientific and Industrial Research’s (CSIR’s) fourth ‘State of Logistics’ survey indicated.
The survey, which was conducted in collaboration with Imperial Logistics, confirmed that a number of companies were expanding into Africa, and were using third-party logistic providers to manage their logistics activities when operating across borders.
All companies surveyed used road transport as the main transport means, and border-post delays were highlighted as the main challenge to overcome. Low uptake of information and communications technology also needed to be addressed.
Solutions proposed included standard electronic clearing systems, longer border post operating hours, improved training of personnel, and improved communication between key role players.
“Seamless, paperless systems should be the goal of each country to optimise logistics processes,” the survey researchers argued.
The CSIR said that the South African government had, since the release of the 2005 survey, identified strategic nodes and corridors that required special attention, but that it had struggled to implement noteworthy changes.
The major advantages of using using third-party logistics providers when exporting, included the reduction of risk in the foreign environment, supply chain complexity was kept to a minimum, geographical coverage could be expanded and transportation costs could be reduced, as well as the fact that extensive supply chain support was available and less time was required to establish a distribution network.
The CSIR report suggested that South Africa had enormous potential to become the Southern African Development Community (SADC) region’s logistics hub, as both import and export markets were growing at a fast pace, and eight of the top 20 trading partners were SADC countries.
South Africa was also the leading economy in the region, contributing 67% of the total regions gross domestic product.
The one major inadequacy was the lack of intermodal facilities and integration between transport modes, which would need to be rectified before South Africa could be seen as a true regional logistics hub.
“We need to urgently develop our Southern African ports and rail infrastructure to handle the increased demand for freight and transportation in the most cost-effective and efficient way,” said CSIR built environment researcher Hans Ittmann.
This would be required to maintain the growth in logistics transportation and ocean freight, which underlined positive economic growth and development in South Africa.
The survey noted that the situation would continue to be strained in the short- to medium-term, and would require intelligent solutions from logistics and supply chain managers, until such time as the fruits of investments in infrastructure materialised.
State-owned transport utility Transnet planned to spend some R80-billion over the next five years to expand capacity at its ports, railways and pipelines. “This is expected to significantly improve South Africa’s port and rail infrastructure, while decreasing congestion on the roads in metropolitan areas,” said the CSIR.
"Growth in trade and logistics is an on-going trend, and delivering goods is increasingly becoming more expensive. We are continuously challenged to work smarter and manage our costs, it's important to monitor our performance and put learnings into practice," said Imperial Logistics CEO Marius Swanepoel.
In terms of logistics expenditure, however, South Africa ranked 124th out of the 150 countries reviewed.
This was attributed to a number of logistics hurdles, including inadequate infrastructure and processes at ports and borders, but mainly to the rising fuel costs, increased road freight volumes, and South Africa’s competitiveness in overland transportation, the Council for Scientific and Industrial Research’s (CSIR’s) fourth ‘State of Logistics’ survey indicated.
The survey, which was conducted in collaboration with Imperial Logistics, confirmed that a number of companies were expanding into Africa, and were using third-party logistic providers to manage their logistics activities when operating across borders.
All companies surveyed used road transport as the main transport means, and border-post delays were highlighted as the main challenge to overcome. Low uptake of information and communications technology also needed to be addressed.
Solutions proposed included standard electronic clearing systems, longer border post operating hours, improved training of personnel, and improved communication between key role players.
“Seamless, paperless systems should be the goal of each country to optimise logistics processes,” the survey researchers argued.
The CSIR said that the South African government had, since the release of the 2005 survey, identified strategic nodes and corridors that required special attention, but that it had struggled to implement noteworthy changes.
The major advantages of using using third-party logistics providers when exporting, included the reduction of risk in the foreign environment, supply chain complexity was kept to a minimum, geographical coverage could be expanded and transportation costs could be reduced, as well as the fact that extensive supply chain support was available and less time was required to establish a distribution network.
The CSIR report suggested that South Africa had enormous potential to become the Southern African Development Community (SADC) region’s logistics hub, as both import and export markets were growing at a fast pace, and eight of the top 20 trading partners were SADC countries.
South Africa was also the leading economy in the region, contributing 67% of the total regions gross domestic product.
The one major inadequacy was the lack of intermodal facilities and integration between transport modes, which would need to be rectified before South Africa could be seen as a true regional logistics hub.
“We need to urgently develop our Southern African ports and rail infrastructure to handle the increased demand for freight and transportation in the most cost-effective and efficient way,” said CSIR built environment researcher Hans Ittmann.
This would be required to maintain the growth in logistics transportation and ocean freight, which underlined positive economic growth and development in South Africa.
The survey noted that the situation would continue to be strained in the short- to medium-term, and would require intelligent solutions from logistics and supply chain managers, until such time as the fruits of investments in infrastructure materialised.
State-owned transport utility Transnet planned to spend some R80-billion over the next five years to expand capacity at its ports, railways and pipelines. “This is expected to significantly improve South Africa’s port and rail infrastructure, while decreasing congestion on the roads in metropolitan areas,” said the CSIR.
"Growth in trade and logistics is an on-going trend, and delivering goods is increasingly becoming more expensive. We are continuously challenged to work smarter and manage our costs, it's important to monitor our performance and put learnings into practice," said Imperial Logistics CEO Marius Swanepoel.
