Logistics industry must address issue of rising costs

South Africa’s logistics industry will have to find ways of adapting to its everchanging environment where rising costs are just one of the challenges to overcome. That’s the view of Francis Kingston, underwriting manager for Lombard Insurance, who says that rising fuel costs, additional toll fees and the strong rand are just some of the economic factors that affect the way organisations in the industry operate. “In addition there is always the threat of strike action, such as the Transnet strike in April 2010, that crippled the industry for over a month – the ramifications of which are still being felt today.” On the legislative side companies need to be aware of the implementation of the New Companies Act and The Consumer Protection Act, with the new Customs Act hovering on the horizon, he added. “The South African economy is slowly showing signs of growth, but as Greece has shown us, the global financial crisis is not yet over and many developed countries around the world are heavily indebted,” says Kingston. “Until all these issues have been sorted out, we can expect only a tentative approach to global economic recovery and significant growth.” According to Kingston, one of the largest assets (and risks) on a company’s balance sheet is its debtors’ book. “Companies should seriously consider taking out credit insurance on their debtors’ book if they have not done so already.”