SA’s logistics costs still way too high

South Africa’s consistently high total cost of logistics continues to hamper the country’s economic growth – having decreased by just 1.2% between 2008 and 2009, from 14.7% to 13.5% of Gross Domestic Product (GDP). This is according to the 7th State of Logistics™ survey released last week by the Council for Scientific and Industrial Research (CSIR), IMPERIAL Logistics and Stellenbosch University. “Total logistics costs should have been significantly lower in 2009 due to the financial crisis and contraction of the economy,” said Hans Ittmann, executive director of the CSIR. “It would have been fair to have expected this percentage to have dropped to a level of closer to 12.5% given the downward changes in the two leading cost drivers, namely the sharp drop in the price of diesel and in the interest rate.” Speaking at the launch of the survey Abrie de Swardt, marketing director for IMPERIAL Logistics, said it was important for South Africa to see the big picture of its high transport and logistics cost. “We represent ‘Brand South Africa’ and it is time we realise that government and the private sector must work together to find solutions to these costs whether we like it or not. “It is not about road or rail and the two modes competing, but rather about South Africa optimising its entire system. We compete with other countries that are going to take volumes away from this country so best we do something about standing together as an industry to make sure we capture those volumes.” The survey – themed Value Creation towards Global Competitiveness and Sustainability – found that while investment into transport infrastructure had been necessary, it had also been costly, with a major concern being the effect of the recovery of infrastructural development costs over the next few years.