Efficient logistics underpins global success

In the global trade environment efficient logistics remains one of the biggest competitive differentiators, which is why it’s imperative for exporters and importers to have a thorough understanding of what it involves to move their product. For Deon Wahl, managing director of international fruit juice concentrate company SCP, logistics is integral if the company is to stay on top of its game – and means knowing how much product is going where and everything in between. “I can’t have my product standing in a stack somewhere waiting to be loaded on a vessel that may or may not call. While it has a stable shelf life, the time involved in moving it determines how we pack and transport it, when we move it and how we move it.” SCP, founded some nine years ago, handles an annual volume of around 40 000 tons of fruit juice concentrate and purees across the globe, importing from Spain, China and South America, and exporting to several European countries, Russia, the Far East and Africa. “We change from being a net importer to a net exporter depending on the market and product availability. We are moving large amounts of concentrate across the world and it is imperative that we keep our fingers on the pulse and understand exactly what the logistics of it all entails – we cannot just rely on a service provider,” he told FTW. “It is essential that we are aware of the logistical challenges and issues in each and every country in which we operate to make sure we know where our product is at any given time. Theoretically our product is perishable and quality has to be maintained at all times.” It is for this reason that Wahl makes use of reliable service providers. “We cannot have fly-bynight transporters who may or may not arrive on time. The same goes for the shipping lines that we use – they need to be calling regularly at ports and have good track records for keeping to schedule. Reliable logistics is imperative.” In this regard Wahl has taken the time to build meaningful relationships with his service providers. “We also try to negotiate rates up front so that we know at the beginning of the financial year what costs are involved and don’t get surprised down the line.” In the South African context this is often not an easy accomplishment as the volatility of the rand and the ever-increasing cost of fuel continues to add to already high logistical costs. “We handle our own negotiations with our big service providers including the shipping lines and the transporters, to make sure that we are getting the best rates possible – but also that there is a clear understanding of our requirements.” For Wahl it is not always about rate. He believes that quality does sometimes come at a premium and if one wants that high standard one must be willing to pay for it. “It is essential though that we have as few delays as possible as it does affect our product – so we choose the most direct routes and also people who are able to deal with any unforeseeable crisis and who can make sure that our containers are delivered on time, regardless of what challenges come their way.” He believes that bringing down logistical costs in South Africa is imperative and to do this rail must make a come-back. “Our product, for example, could very easily be moved on rail. Several years ago we took part in a survey to see how effectively it could be done, but since then we have not seen much further development,” said Wahl. “We are reliant on road and it is an expensive option. The transportation component alone is often in the region of 10% of the production cost. These costs are ultimately passed on to the consumer and unless we find ways of bringing the costs of logistics down, the consumer is going to just have to continue to pay more and more for goods.” INSERT & CAPTION We try to negotiate rates up front so that we know at the beginning of the financial year what costs are involved and don’t get surprised down the line. – Deon Wahl INSERT Testing, testing and more testing. Quality is of utmost importance in the shipping of fruit juice concentrate.