Consolidators cushioned against full impact of slowdown

Against a background of global economic turmoil, a weakening rand and escalating local logistics costs, working smarter has become an industry imperative. Independent sea and airfreight consolidator CFR Freight has come off a record year, with the first six months of the current financial year well on budgeted target, says managing director Martin Keck. While the weak rand will clearly benefit SA manufacturers, making exports more competitive, importers will feel the pain. Not only will goods become more expensive, but higher petrol costs will bump up inflation as will the impending toll roads and ongoing electricity hikes. All in all a lethal combination. For companies like CFR, whose seafreight division is dollar-based, higher costs will be the order of the day. “And while the costs of operating are going up, it’s not easy to pass on those increased costs to your customers,” says Keck. The solution, says marketing director Peter Schmidt-Löffler, is to work smarter, and that means investing more and more in IT. “And that involves not only CFR but also its overseas partners in the WorldWide Alliance. “We’re now getting more linked in terms of not having to capture information more than once, we get manifest information from most of our partners via EDI, and track and trace is done on a global platform via EDI. “Our automatic tariffing and quoting system is upgraded all the time – and that involves global tracking through the WorldWide Alliance. It frees up our operators by taking over the paper-pushing so that they now have time to deal with customers directly.” Volume-wise, imports have exceeded exports over the past year, but with the weaker rand, Keck believes this trend could be reversed. The future is more uncertain than it ever was – but consolidators like CFR will always be cushioned against the full impact of a slowdown because during a recession shippers tend to opt for smaller loads more often to keep inventory low. Airfreight shippers will also often switch to seafreight to cut costs, once again providing additional volumes. So for CFR, the future looks positive – but how it will play out is a question of ‘wait and see’.