Logistics challenges have been identified as a major obstacle to South Africa’s manufacturing and export growth. According to Ockert Berry, vice president operations, Ford Middle East and Africa, a successful export programme is based on delivering the right product, produced at the right price to the highest level of quality and, crucially, delivered on time to customer markets. Port congestion, delays and lack of equipment and infrastructure, however, continue to impact on manufacturers’ ability to achieve this. “We have to resolve the logistics challenges in order to guarantee future investments and start creating the job opportunities we need.” Berry said that Durban port’s ongoing congestion was one of industry’s biggest challenges, hence its move to a multi-port strategy. This saw the company investing over R11 billion in its local operations to ensure that it was capable of building vehicles to the highest standard. It is, however, not just the port congestion that is a concern. “The efficiency of the Transnet rail infrastructure is also far from perfect and needs to be improved significantly to enhance exports from South Africa – which are crucial to ensure the longterm sustainability of the local automotive industry,” said Berry. “With the industry growing and other OEMs exporting more, the shortage of rail vehicle carriages is likely to become more problematic, and Transnet needs to invest in additional infrastructure and the efficiency of its network to support this growth.” That did not mean that it was all down to road, said Berry, as this mode of transport was also not without its hazards. “With trucks being attacked along the N3, which is the main national road between Gauteng and Durban, it presents a significant risk to the country’s development and growth as a whole, and specifically for the exports and imports of vehicles as well as parts to support the automotive industry. Security at border crossings into southern and Sub-Saharan African countries is also of major concern.” According to Berry Ford’s Silverton assembly plant currently has an installed capacity to produce up to 168 000 vehicles per year. The continuous expansion of export volumes, said Berry, had also increased pressure on efficiency and delivery timeframes. “The majority of our vehicles are shipped via the Port of Durban’s roll on roll off (roro) terminal. The vehicles are transported to Durban via road and rail. More than 15 vessels depart each month,” he said. Over and above that it has to move vehicles across southern Africa where the distribution is done by road transport, locally to dealerships across the country. The company also handles the entire spare parts logistics for both local and southern African vehicles sold. It is a massive operation that requires a streamlined logistics process, said Berry. “Logistics plays a critical role in the company’s daily operations,” he said. “Many of the parts and components used in the local assembly are sourced from local and international supplier companies. Our engines are assembled at the Struandale Engine Plant in Port Elizabeth, and these are then transported by road to the Silverton plant according to a very tight production schedule.” Berry told FTW that any disruption in this chain from any of its suppliers had the potential to bring production to a halt. “As production volumes grow, obtaining these parts on time becomes even more critical to ensure that we are able to meet our vehicle orders – whether supplying to domestic customers or global markets.” He said due to the high level of congestion at the Durban ro-ro terminal, the company had recently adopted a multiport strategy using the Port of Port Elizabeth as its ro-ro terminal was under-utilised. This move had brought major efficiency and delivery time gains, especially to the European market. “We are also optimising the use of the rail infrastructure that carries vehicles from the PE-based vehicle manufacturers to Gauteng. Previously the carriages returned empty. This gives us greater flexibility to support our expanded production,” said Berry. An in-house logistics team handled the outbound export vehicles as well as the movement of the domestic vehicles, he said, while the company made use of external service providers as well.
The efficiency of the Transnet rail infrastructure is far from perfect and needs to be improved significantly to enhance exports. – Ockert Berry
