The Port of Durban needs
to pull up its socks now
if it is to remain relevant
when South Africa’s
financial fortunes improve.
That’s the view of Berto
van der Lith, Suzuki SA
divisional manager: finance,
administration and logistics,
who believes that lower
container volumes are all that’s
keeping major congestion
relatively under control.
When the growth rate
increases, port inefficiencies
will become more pronounced
and force shippers to look
elsewhere for an alternative
import hub.
Van der Lith told FTW the
company had in the recent past
evaluated its seafreight import
strategy.
“Additional costs are incurred
because of Customs delays and
the heavy truck congestion
on the Bayhead road,” he
said, noting that Suzuki had
managed to find solutions
to deal with some of the
operational headaches.
These include Suzuki’s
application to be part of South
African Revenue Service’s (Sars)
preferred trader programme
to minimise the frequent
stoppages by the National
Regulator for Compulsory
Specifications (NRCS).
“Stoppages are not ideal as
they increase
the total landed
cost of products.
However, Suzuki
fully supports
these necessary
controls to
mitigate
dumping and
other illegal
activities,”
Van der Lith
commented.
Furthermore,
Suzuki
makes use of
airfreight for
some of its product orders.
Airfreight is delivered directly
to Johannesburg for urgent
customer stock orders and, in
these instances, the company
absorbs the additional costs
instead of passing them on to
the customer.
“But when congestion
happens, companies need
to be ready to move toward
alternative options,” Van der
Lith pointed out.
These options include
the port of Port Elizabeth
which, although further from
Johannesburg geographically,
could provide benefits in terms
of faster Customs clearance due
to lower container handling
volumes as well as easy access to
and from the port.
Another alternative, Van der
Lith suggested, was the port of
Mozambique. However, that is
currently not a feasible option as
it charges supply
chain fees in
US dollars.
“The current
rand dollar
exchange rate
makes it too
expensive.” The
lead time for
goods to arrive
at destination
could also be
longer.
He told FTW that as part
of the Japanese philosophy
of Kaizen – which means
continuous improvement –
embraced locally by Suzuki, the
company was always looking for
innovative ways
to optimise costs
and efficiencies.
“During 2014,
we brought a
large part of
our supply
chain services
in-house,
including our
warehousing and
distribution,”
said Van der
Lith, noting that
this decision
not only saw a
decrease in external risks such
as stock theft but dramatically
cut down on overall logistics
costs and improved customer
service in terms of delivery
turnaround time.
“Customers’ expectations have
changed and even businessto-
business
customers
demand
faster delivery
and higher
operational
efficiencies at
a lower price –
but we’ve learnt
to judge the
urgency and
adjust our supply
chain services to meet every
need individually,” said logistics
and warehouse manager, Wilton
Dladla.
This allowed for much
greater f lexibility and therefore
gave Suzuki South Africa
the scope to explore various
supply chain options, added
Van der Lith, pointing out
that although South Africa’s
rail infrastructure should be
expanded in order to increase
capacity and efficiencies, the
company used rail to send
Suzuki parts division products
from Durban to City Deep in
Johannesburg.
“Rail transport has proven to
work really well in countries or
regions such as the European
Union or North America where
there are a variety of rail service
providers,” he said. “In South
Africa the situation is different.
There is only one rail service
provider and, because it has
such a low market share, the
efficiency is lacking.”
According to Van der Lith, it
takes an average of two days to
get stock delivered from the Port
of Durban to the Johannesburg
warehouse via road. It could take
up to six days via rail.
“This may be due to a number
of factors which include space
bookings, wagon availability,
terminal services or the
utilisation of trains to ensure
cost-effectiveness,” he said.
He believes that for rail to
work in South Africa as a viable
freight option there needs to be
greater industry buy-in. “And
for that to happen, efficiencies
have to improve. And efficiencies
will only improve once there is
improved competition.”
CAPTION
The Suzuki SA team from the left: Johannes Thokoa; Charl Grobler; Yukio Sato
(MD); Wilton Dladla and Berto van der Lith.
INSERT AND CAPTION
When congestion
happens, companies
need to be ready to
move toward alternative options.
– Berto van der Lith, divisional manager:
finance, admin and logistics.
INSERT AND CAPTION
While we pursue our SA
Africa expansion,
we’ve learnt
that it’s better to do business in
countries where cash flow isn’t
a problem. Letters of credit can
become a logistical nightmare.
– Wilton Dladla, logistics and warehouse
manager.
