Logistics costs at their highest – worldwide

GROWTH IN trade and logistics is an on-going trend and delivering goods is becoming increasingly more expensive, according to Marius Swanepoel, CEO of Imperial Logistics – which has sponsored the just-released CSIR logistics survey. “As we are challenged to continuously work smarter and manage our costs, it's important to monitor our performance and put learnings into practice,” he said. Putting the spotlight on domestic logistics and transportation in relation to international trade, the CSIR reported positive logistics growth for the southern African region and highlighted the challenges faced in increasing SA’s global competitiveness. Based on 2006 data and information, the report found that domestic logistics costs account for 15.7% of the country's gross domestic product (GDP) – half a percentage less than the previous figure. Transportation constitutes the major component of logistics at 56.9% – an increase of 0.7%. Since 1997, growth in transportation has predominantly been captured by road. In 2006, total land transport in SA amounted to 1.5-billion tons shipped – up by 5.5% from 2005. This cost factor is not only an SA phenomenon, the report added, but a global trend. It was also reported in the 19th State of Logistics Survey (based on 2007 data) and released by the Council of Supply Chain Management Professionals (CSCMP) in the US. It found that the logistics costs as a percentage of GDP at 10.1% in 2007 was at its highest in the US since 2000. Still focusing on the world stage, the CSIR report calculated that sea-borne trade increased from 2005 to 2006 by 4.3% to reach a total of 7.4-bn tons. Meantime, containerised traffic handled at SA ports grew by 7% in 2006 – and bulk exports and imports increased 6% and 4%, respectively. “Seaports are generally acknowledged as a region's economic lifeline,” said the CSIR. “With growth figures exceeding that of international trade, SA is increasingly becoming the gateway into Africa, and the region's logistics hub for international trade.”