Provincial logistics costs in South Africa’s Western Cape province: Microcosm of national freight logistics challenges (original) (raw)
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This survey highlights that South Africa's core structural problems are far worse than expected: Logistics cost represents a considerable percentage of the GDP (14.7% or R180bn). We spend more on transport than generally expected and much more than we should; The "normal" macro economic model is to transport long-distance corridor freight on rail, with feeder and distribution services provided by road. Structural investment mypoia caused an unhealthy situation in South Africa, with three quarters of long-haul tonnage on road; Our dense long-haul road corridors are intrinsically more expensive than a possible intermodal solution (even more so if extrinsic costs are considered). An overarching investment strategy should therefore consider that greater efficiency in one mode is a "second prize" compared to greater efficiency between road and rail. CSIR Centre for Logistics and Decision Support and Spoornet
South Africa’s rising logistics costs: An uncertain future
Journal of Transport and Supply Chain Management, 2014
A country’s competitiveness can be severely hampered by an uncompetitive freight logistics system. During the first decade of the 21st century, two in-depth models were developed for South Africa which provide a framework for measuring and improving the country’s freight logistics system – the cost of logistics survey and the freight demand model. These models also allow for the development of scenarios for key identified risks. The objectives of this study were to provide an overview of South Africa’s surface freight transport industry,identify key risks to national competitiveness and suggest ways in which these risks could be mitigated. Freight flows were modelled by disaggregating the national input–output model into 372 origin–destination pairs and 71 commodity groups, followed by distance decay gravity-modelling. Logistics costs were calculated by relating commodity-level freight flows to the costs of fulfilling associated logistical functions. South Africa’s economy is highly...
The State of LogisticsTM – an overview of logistics in South Africa
2010
Logistics and supply chain management play a big role in any economy and are a critical contributor to the competitiveness of a country. The demand for products can only be satisfied through the proper and costeffective delivery of goods and services. South Africa’s main economic activity is located in Gauteng and this has a serious effect on logistics costs. In addition, most of the freight in the country is transported by road. Furthermore, for South Africa to grow its market share of various products in the global market, the supply chains need to be world class to ensure effective delivery of goods. These and other aspects of the logistics environment in South Africa will be presented and major issues affecting logistics costs will be discussed. In addition, reference is made to the recent World Bank report on logistics competitiveness, and comparisons are made with Brazil and the USA on logistics performance.
2007
Logistics was identified by the South African government in the Accelerated and Shared-Growth Initiative of South Africa (ASGISA) as one of the six potential hurdles that may limit future growth in the country. Strategies were put in place to address this potential treat. The National Freight Logistics Strategy and the National Land Transport Strategic Framework are two such strategies, supported by strategies in many other spheres of government to ensure that the country increases its competitiveness. Currently these strategies are being implemented within our developing economy with varying degrees of success. The theme of this survey, "Implementing logistics strategies in a developing economy", is therefore highly appropriate. Implementation is critical but doing it properly and thoroughly with a long-term view does not happen overnight. Proper foundations need to be laid to ensure sustainable growth as well as increased competitiveness through world-class supply chains. It is only through such endeavours that South Africa will be able to operate and compete in the global market place. In addition, those within the second economy who require focused assistance, specifically from a logistics and supply chain management point of view, cannot be ignored. The CSIR (Council for Scientific and Industrial Research) and its associates believe that critical aspects are addressed in the third State of Logistics report. The report is similar in format to the first two surveys and allows for trend analysis, which is vital to keep track of what is happening in this critical area. From our current results it is interesting to note that although logistics costs are rising as a result of growth, the percentage of logistics cost, as a percentage of GDP, is decreasing since the growth in GDP is faster! Indications are that the envisaged improvements in infrastructure have not yet happened and this is to be expected. These improvements will take time to have the desired effect and impact. Nevertheless, all indications are that the appropriate interventions have been made and these now need to be implemented. As stated in the second survey, the National Freight Logistics Strategy now also needs time to affect reform. Our industry focus in this survey is the fast-moving consumer goods (FMCG) sector. This is a large sector which is growing at almost the same rate as the economy but it also faces a whole range of challenges in the supply chain environment. It was important to determine how the sector copes with these and what innovation, if any, there is in this sector. This survey should not only open the agenda for further discussions on various logistics and supply chain management issues, but also contribute to an appropriate R&D agenda. In this regard all stakeholders are urged to interact with the CSIR and academic institutions. It is only through these collaborative interactions that relevant research can be conducted that will benefit the country. The CSIR and its associates are however grateful for past feedback and interactions.
2005
The following organisations made publication of this document possible: The CSIR is one of the leading R&D, technology and innovation institutions in Africa, with a track record spanning 60 years. The Centre for Logistics is home to extensive expertise in operations research, quantitative modelling and logistics. It has a long history in research and consulting in various industries, and is the originator of the Annual State of Logistics Survey for South Africa. USB-ED Consulting offers customised business solutions which combine the theory and practice of business science. This allows for strong research-based methodologies when assisting clients in fields such as strategy-setting, market research and change management. The Department of Logistics offers undergraduate and postgraduate programmes in logistics, as well as academic and professional research and the production of accredited publications.
Freight corridor performance measurement system: A framework for South Africa
Journal of Transport and Supply Chain Management, 2016
Background: On a national level, South Africa’s freight logistics industry is inefficient. The country ranks 36th out of 40 countries in terms of transport productivity (tonne kilometres as a ratio of gross domestic product, or GDP); the ratio of freight logistics costs to GDP measured 11.1% in 2013, compared to that of developed regions which measures in the order of 9%; and rail tonne-km market share on the two most dense long-distance corridors, namely, GautengDurban and Gauteng-Cape Town, is only 12.8% and 4.4%, respectively, whereas rail is globally acknowledged as a more efficient provider of long-distance freight solutions, given appropriate investments and service commitments.Objectives: A cornerstone of improved national freight logistics performance is the availability of reliable indicators to quantify the efficiency and capacity of the logistics network over the intermediate and long term, thereby enabling an evidence-based policy and investment environment. The objectiv...
Sustainable freight transport in South Africa:Domestic intermodal solutions
Journal of Transport and Supply Chain Management, 2011
Due to the rapid deregulation of freight transport in South Africa two decades ago, and low historical investment in rail (with resultant poor service delivery), an integrated alternative to road and rail competition was never developed. High national freight logistics costs, significant road infrastructure challenges and environmental impact concerns of a road-dominated freight transport market have, however, fuelled renewed interest in intermodal transport solutions. In this article, a high-level business case for domestic intermodal solutions in South Africa is presented. The results demonstrate that building three intermodal terminals to connect the three major industrial hubs (i.e. Gauteng, Durban and Cape Town) through an intermodal solution could reduce transport costs (including externalities) for the identified 11.5 million tons of intermodalfriendly freight flows on the Cape and Natal corridors by 42% (including externalities).
Logistics in Namibia: Issues and challenges
2012
Logistics is perceived to be important for Namibia's growth and development, but this may be a matter of conjecture as there is a dearth of documented information about the industry in Namibia. Furthermore, it is uncertain what the understanding of logistics is for key stakeholders in the country. This article reports on a project; the objectives were to address some of these issues and to lay the foundation for a more thorough investigation in the future. The findings of the initial project were disseminated in 2012 by: a conference paper showing the challenges and opportunities facing logistics in Namibia in 2012; a report; and through a Logistics and Transport Workshop held in Walvis Bay, Namibia in September 2012. These reports, additional interviews and subsequent discussions highlighted some potential opportunities and problems. This article summarises the project to date, showing the methodology and findings as updated by subsequent feedback and further interviews. The findings from key stakeholders of the logistics industry in Namibia include: universal agreement on the importance of logistics to Namibia; the variety in the understanding of the term logistics; the strength of the continuing influence of South Africa as the dominant economic power in southern Africa; and contrasting views on the main factors limiting logistics development, including infrastructure, attitude, government, customs, training, railways, corruption and driver shortage.