Rising fuel prices and driver shortages will push up the price of logistics in 2018 – and this may result in more transport services being outsourced. This is according to Stellenbosch Professor Jan Havenga who told FTW that the outlook for 2018 was not very positive. “This is because transport is demand driven and the South African economy is not doing well. But I see a few structural changes developing which is slightly encouraging.” Havenga said he hoped various cost pressures would increase the outsourcing of logistics. “I think the fuel price will continue to rise, and driver shortages will persist, which will add to these cost pressures.” While he believes the logistics industry is “reasonably” well consolidated compared to other countries, further consolidation and outsourcing would serve the country well. “Currently, only about 50% of freight transport in South Africa is outsourced, which is a pity because the outsourced option is definitely more efficient.” Havenga said there would be new opportunities for combined solutions in rail and road. “I see new rail capacity coming on line. This will begin to create challenges for road operators who specialiae in long-haul, bulk material transport only.” Mike Schüssler from economists.co.za was cautiously optimistic. “While the South African economy is not in a good space right now, there are indications that the country could be in a better political space next year, which will positively affect credit ratings and investment.” He added that transporters could be in for a few additional price shocks, including the carbon tax, which was expected to be implemented by October next year, and a potential increase in the Road Accident Fund (RAF) levy. Schüssler projected that the RAF levy could increase by 10 cents per litre of fuel in April and that the carbon tax could be set at 13 cents per litre. The World Bank is predicting GDP growth in South Africa of 1.1% in 2018.
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The fuel price will continue to rise, and driver shortages will persist, which will add to cost pressures. – Jan Havenga
