Recession has forced down logistics costs

With commodity prices increasing, logistics companies are expecting business growth in the months ahead. Analysts are predicting that even though the speed and extent of the global economic recovery remains uncertain, commodity prices are likely to put in a strong performance in 2010, boosting the worldwide mining industry. Kriba Naiken, managing director – shipping for ICM Group, a mineral packing logistics company, this is good news. “We will face two major challenges in the next few months to ensure that opportunity is turned in to profit, and that is the strength of the rand and the cost of logistics.” Naiken told FTW that while the impact of the global recession had severely impacted logistics companies involved in the mining industry, it had also levelled the playing field. “If anything positive has come out of this it is that the cost of logistics has stabilised. Before the recession companies were creaming it and logistics was expensive. Last year we saw logistics costs having to subsidise the cost of the product.” Naiken said many companies had also found innovative ways of doing business. “There is no doubt that the next few months are offering us an opportunity to recover some of the losses.”