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Presenters at South Africa's 8th State of Logistic
survey in Johannesburg: (from left) Zane Simpson (Stellenbosch University); Dr Cornelius Ruiters (CSIR); Nadia Viljoen (CSIR); Hans Ittmann (HWI Consulting); and Cobus Rossouw (IMPERIAL Logistics). |
The long and short from the survey is that South Africa’s economy stand to benefit from the continent's growth, but entrenched dependence on road transport makes the region's economy very vulnerable.
The survey was jointly released by the CSIR, IMPERIAL Logistics and Stellenbosch University.
Nadia Viljoen, scientific editor of the survey and a researcher at the CSIR, said in a press release accompanying the survey that South Africa must urgently address critical issues relating to the road freight sector; shift from road to rail; and address rampant skills shortages and misalignment in the logistics sector.
International standing
“This survey is one of only a handful of studies worldwide that quantify logistics costs using a modelling approach. The South African State of Logistics survey is recognised nationally and abroad as a premier reference for macro-level logistics trends in South Africa,” said Viljoen.
She added the 8th edition tracked trends of a number of important logistics factors within the country and is valuable to decision makers and industry strategists in the logistics arena.
Investment
Dr Cornelius Ruiters, executive director of the CSIR’s Built Environment research domain said the South African government’s plan to invest more than R260 billion on transport and logistics projects .
“The effective maintenance, expansion and management of our country’s infrastructure will enable South Africa to compete at a higher level globally,” Ruiters notes.
Against the trend
Going against the prevailing thinking that all transport is a cost and not a value add, Cobus Rossouw, Chief Integration Officer of Imperial Logistics argued that logistics is not the result of other market activity, but a value creator.
He implied these values were the solutions that South Africa has created in complex, emerging and dynamic logistics environments, which include geographical impediments, severe skills shortages and lack of economies of scale. The trailers made by Afrit for the longest road trains operating in Africa are a case in point.
Top three challenges in the transport industry
For the survey, data obtained from a broad range of industry and government stakeholders identified the key challenges in the South African road freight sector.
Respondents felt the top three challenges in the logistics industry are.
- poor road conditions (64%),
- the cost of fuel (52%) and
- a lack of law enforcement and prevalent non-compliance (43%)
Potholes/Slaggate
The condition of the country’s roads is also regarded as a critical cost driver by 73% of the respondents.
The survey furthermore reports that the contribution of poor road conditions to fatal accidents shows that the effect of bad roads stretches much further than increased vehicle operating costs. Road-related factors contribute to 5–15% of fatal road accidents, of which 28% can be attributed to poor road surface conditions.
The total cost of fatal accidents caused by poor road conditions in 2010/2011 is estimated at between R207 million and R621 million.
The shift required from transporting cargo by road to rail remains a concern. Dr Jan Havenga and Zane Simpson of Stellenbosch University have identified the uncertainty and risk relating to the fuel price as an important risk for South Africa’s transport costs. Simpson states, “A solution to mitigating the risk associated with transport costs is a significant modal shift from road to rail, but consideration should also be given to reducing transport demand.”
Maritime connectivity is a strategic issue, with not only volumes of cargo being important, but enhanced access being key. South Africa ranks 30th out of 162 coastal countries. It is in the same league as Brazil and India, and outperforms coastal SADC countries by far in terms of maritime connectivity. This is according to the United Nations Conference on Trade and Development. In addition, the Georgia Institute of Technology found that Durban and Mauritius are far better globally connected than other ports in SADC, with Durban being on par with the ports of Mumbai and Rio de Janeiro.
A case study measured the range of vibrations that fruit cargo undergoes when being transported from growers in Limpopo on gravel, provincial and national roads to Pretoria and Johannesburg. Small-scale farmers are more vulnerable to fruit cargo damage - they often do not have insurance and cannot absorb losses as easily as larger concerns. A second case study found an incremental loss of income due to wheat-loss when transported on bad as opposed to good roads. The wheat-loss due to vibrations is estimated to amount to R2.5 million per year for South Africa.
Imperial listed its green logistics hub project in the Western Cape as an example of sustainable energy use. A photovoltaic system will power the logistics hub site for the next 20 years; solar geysers supply all hot water; and the office building design maximises sunlight use. The payback period for the power system installation is less than seven years and an annual energy saving of 44% is reported.
