T he high cost of air freight is the biggest challenge for manufacturers who maintain it is often unaffordable. According to Dr Andries Botha, senior manager at Toyota South Africa, sea freight will remain the base logistics for the auto manufacturer. “The reason is quite simple. It is cost effective, reliable and fits sufficiently with our lead times.” He said manufacturers were far too often caught short, having to pay the prescribed rates because there was no other option to move the cargo quickly. “Our supply chain operates on a sell one, buy one policy,” he said. “All stock is centralised in one place rather than at the various dealers. We deliver to each and every one of our dealers every day. If the part, however, misses the truck and it needs to be there urgently, we will send it via air.” Ultimately, said Botha, it came down to rate. “In our operation air freight is used mainly when there are emergencies and parts have to be moved quickly from one point to another. There are abnormal conditions where we can’t rely on sea or road and will opt for air, but it is not the norm.” He said only three vehicles had been flown into the country by Toyota. Vehicles were mostly imported fully constructed by sea while the various vehicle components were manufactured at several of the OEMs' factories around the world. These parts, said Botha, were all imported in containers. “There are also some of these components manufactured in South Africa and these are also exported via sea. The bulk of our accessories are manufactured locally and moved around the country using road freight.” He said the company continued to minimise stock as this was most cost effective. “We have a stock manual with more than 750 000 parts. We would have to roof the entire Boksburg facility if all of these were to be available and kept in stock. Around 123 000 parts are kept in our warehouse based on what is high and low demand.” He said there was no denying the advantages of air freight as it was quick and extremely reliable. “When it comes to very high-value vehicles there is no doubt that we will airfreight them, but it comes at a high cost.” He said from a vehicle manufacturer point of view air freight, over and above cost, posed three more challenges. “Size, volume and regulations,” said Botha. “The size of some of our items is not suitable for air cargo, while weight would increase the cost too much. Also the regulations that exist around some of the items in our vehicles prevent us from shipping by air.” Ultimately, said Botha, there was no getting past the fact that air freight was ten times the cost of sea freight. “Our target is to never fly in more than 10% of our turnover.” The cost was also absorbed by the OEM. “Our clients don’t pay for the cost of bringing in any part for any vehicle via air freight. Our margins are already under real pressure and when one adds the cost of air freight into the equation it becomes very difficult for a manufacturer to be profitable.”