Socio-economic development, significantly enabled by logistics and supply chain management efficiencies is stimulated by extensive, modern and properly-maintained infrastructure. For southern Africa, which faces significant challenges in this regard, solutions that effectively balance road, rail and air are critical.
“Solutions that optimise southern Africa’s end-to-end supply chain must be identified and critically, must be supported by cost effective and efficiency-driven infrastructure,” says Abrie de Swardt, IMPERIAL Logistics Marketing Director. “Greater use of multi-modal logistics solutions would contribute significantly to heightened regional competitiveness.”
He explains that this approach to freight transport leverages a combination of transportation modes. “The primary benefit is a reduction in total landed costs. In addition, through reduced cargo handling, security is improved and damages and losses reduced,” he says.
Challenging regional context
Of the 12 pillars that shape the World Economic Forum Global Competitiveness Report, infrastructure, macroeconomic environment, goods market efficiency, labour market efficiency, technological readiness, business sophistication and innovation all have a bearing within logistics.
“Logistics performance is impacted by efficiencies in customs clearance processes, ease of arranging competitively priced shipments, competence and quality of logistics services and critically, the quality of trade and transport-related infrastructure,” says de Swardt.
He adds that Logistics Service Providers (LSPs) operate within a challenging context due to inadequate rail capacity, bad road quality and extensive skills shortages. Furthermore, South Africa, a leading economy within the region maintains high total cost of logistics. This cost is compounded by growing demand for transportation, as well as high and volatile fuel costs.
“In South Africa, commodity transportation has been constrained by rail and port issues, and the primary road network has only recently been focused on in terms of maintenance planning,” he says. This is significant because the country’s freight transportation needs are largely addressed via road, an expensive and unsustainable solution for certain products and geographical areas.
“By aligning objectives, companies within the region can alleviate pressure on the road system, bringing back to rail heavy duty commodities such as coal, iron-ore and manganese, and containers best suited for rail transport,” notes de Swardt. “It is important for road and rail sectors to complement each other through applying an optimum split between the two transport modes.”
Dualistic national strategy
Over and above this change in approach to the transportation mix, de Swardt says that a different approach for freight corridors is necessary. “Within South Africa, a dualistic national strategy that addresses both main freight corridor and rural services should be considered, with the ultimate objective being to reduce the country’s total cost of logistics.”
Rural freight, extensively serviced by the secondary road network is expected to exhibit strong growth moving forward. The 7th Annual State of Logistics™ survey states, “The potential effects of deteriorating road quality extend far beyond increased vehicle maintenance and repair costs. Trucks travelling on bad roads experience more vibrations that could increase damage to transported cargo.”
Professor Jackie Walters, HOD: Department of Transport and Supply Chain Management (University of Johannesburg) and Director: Institute for Transport and Logistics Studies (ITLS) (Africa) projects that road freight will continue to dominate both the corridor and rural freight transport market, internationally and locally.
He indicates that “although most of government’s focus is on ‘rebalancing’ road/rail modal shares, we are losing the plot on the rural services,” which has seen an 85% increase in tonnage over the past five years. Comparatively, corridor tonnage has only increased by 39.5%.
Southern Africa ‘corridor talk’
Supply chain failure could have a significant impact on the health of the regional economy. “The development and upgrading of Africa’s sub-Saharan Africa transport corridors is critical to strengthen the value proposition of the region’s logistics offering,” says de Swardt.
“Multi-modal solutions will increasingly incorporate the likes of Namibia’s infrastructure, which is currently seeing major investment in the likes of Namport,” he says. The port is an alternate to the often congested Cape Town and Durban ports.
The Trans Kalahari, Walvis Bay and Maputo Corridors are growing the region’s strategic importance,” says de Swardt, citing the example of the Maputo and Walvis Bay ports, which he says shows significant potential as an economic driver. Traffic volume of the Trans Kalahari corridor alone has tripled in three years, largely due to goods coming in and then going to Angola.
Greater public-private collaboration
Regional expansion, enabled through more successful collaboration is not a choice but a necessity. Such expansion will likely be focused on consumer and commodity markets. “The economic growth of the region depends on consistently greater movement of goods, with these two markets offering substantial growth opportunities,” says de Swardt.
In addition, collaborative investment, both financially and in terms of resources must focus on ensuring on-going maintenance and operational improvement of the region’s transportation network infrastructure. LSPs can offer particular value to the public sector in terms of driving operational improvement.
“Infrastructure is the springboard for growth and development. Business, governments and regional bodies must work together to ensure that the return on investment delivers sustainable benefits to the regional economy. The contribution of logistics to economic growth is optimally leveraged to this end,” concludes de Swardt.
About IMPERIAL Logistics
IMPERIAL Logistics is a global logistics and supply chain leader that moves business and industry through innovation, inspiration and foresight. Through its established Southern African and International divisions, IMPERIAL Logistics’ service delivery comprises fundamental logistics and end-to-end supply chain management solutions to blue chip customers in almost every industry. As a preferred logistics outsource provider, IMPERIAL Logistics positions itself as an extension of its customer’s business, building its customer’s brand alongside its own. IMPERIAL Logistics Southern Africa is a multi-branded business, categorised into five key divisions, namely Transport and Warehousing, Consumer Products, Specialised Freight, Integration Services and Africa. IMPERIAL Logistics International comprises four operating units, namely Panopa Logistik, neska, IMPERIAL Reederei and Brouwer Shipping. For further information, please visit www.imperiallogistics.co.za.