Logistics operators are in uncharted territory. As the world grapples with the ongoing Covid-19 pandemic, the industry is facing supply chain disruptions which have impacted competitiveness, economic growth and job creation.Experts, however, remain bullish about the long-term outlook for the sector.
“We’re experiencing difficult times at the moment but exciting times are ahead,” says Dr Peter Kilbourn, senior deputy head and lecturer of the Department of Transport and Supply Chain Management at the University of Johannesburg.Describing the sector as resilient and innovative, he says it is all about weathering the current storm – and that it is all about survival, especially for smaller organisations.
“The type of industry vertical serviced by operators will largely determine their profitability in the short term i.e. fast moving consumer goods vs automotive components,” he explains. “Market rationalisation is common under conditions similar to what we are experiencing now. However, there are also many opportunities for repositioning in the market place. Online sales are growing fast – albeit from a low base - and will create new last-mile challenges and therefore opportunities.”According to a recent report by the International Finance Corporation (IFC), a member of the World Bank Group, recovery prospects will vary by country and by subsector. The report highlights the importance of technology and e-commerce going forward.
“Logistics has been in the midst of a tech-driven revolution. Companies with robust digital capabilities that allow them to provide cargo visibility/traceability and do business online are at an advantage,” reads the report. “This would entail investments in technology, such as the Internet of Things (IoT), cloud computing, automation, and data analytics. In the long term, robotics, drones and autonomous vehicles may reduce logistics services providers’ exposure to labour shortages.”According to Kilbourn the digitisation of supply chain activities incorporated into f lexible platforms will create exciting new opportunities to grow revenue or to re-engineer logistics processes to higher levels of efficiency.
“Very few industries will be able to capitalise on new technologies used to accumulate and analyse big data to the same extent as the transport and logistics industry.”
Adapting faster to this changing environment in which the role of digital technology becomes increasingly important will be critical.“It is expected that cloud-based technology and platform solutions will drive new business models, yet few companies are on an advanced level of digitisation at present,” says Kilbourn.
According to Professor Jan Havenga of the University of Stellenbosch’s logistics department, the need for investment in soft infrastructure for the logistics sector will be critical.
“We simply don’t focus on it enough,” he says.One area of extreme concern has been education – resulting in skills shortages across the sector.“Improving skills is important for an improved long-term outlook,” says Havenga.
