Diminishing margins are forcing companies to cut costs – and the result has been a growing trend towards outsourcing, says Alwyn Nel, managing director of Kingfisher Freight Services. “There are not only cutbacks in terms of staff but in any area where there is a need to trim expenditure and increase profitability – and that includes warehousing and transport operations.” All of which makes sense, says Nel, in the current business environment where there are often liquidity challenges, cash f low issues and increased operating costs across the board. “We are also as an industry having to deal with the deterioration of rates, while revenues are becoming tighter as the market shrinks due to cutbacks by importers and manufacturers. Paired with the uncertainty in the economy due to the ongoing mining strike and the looming strikes in July by other sectors of industry – along with the lack of confidence in the manufacturing sector – we are indeed facing some serious challenges.” He said now more than ever logistics service providers needed to be competitive and priceconscious. “The increase in just-intime shipments as importers and manufacturers reduce stock holdings as well as a trend towards smaller and more frequent shipments have brought changes to the way we do business,” said Nel. INSERT & CAPTION We as an industry have to deal with the deterioration of rates. – Alwyn Nel
