South Africa has retained its position as one of the top performing countries in the 2018 Logistics Performance Index (LPI) published by the World Bank.
“South Africa has kept its position quite well,” said LPI researcher and author Professor Lauri Ojala of the University of Turku in Finland. “It has consistently improved over the past few years and does very well when compared internationally.”
Speaking at the Transport Forum in Stellenbosch recently, Ojala said the LPI was an interactive benchmarking tool created by the World Bank to help countries identify the challenges and opportunities they faced in their logistics performance and what they could do to improve. “It is a synthetic metric of supply chain efficiency and has had a significant impact in raising awareness and establishing logistics as a cross-cutting policy concern,” he said.
Launched in 2007, the biennial survey ranks countries through six criteria, including customs and border management clearance and the quality of trade-and transportrelated infrastructure. Covering some 160 countries, the report rates South Africa at an overall 33rd place achieving an overall score of 3.38 compared to the top-achieving country, Germany, which scored 4.20. It was the only African country in the top quintile or the top fifth of the countries surveyed. These countries are considered very logistics friendly.
“South Africa’s scores did have a rather broad confidence interval in the LPI survey,” said Ojala. “Hence its scores are not as accurate as those of the biggest traders.” He said the country scored well on timeliness, customs and border management as well as on international shipments. It performed slightly worse on logistics competence.
According to Ojala researchers did not manage to get nearly as many responses on African countries as they had two years ago. The reason for this was not known. Not everyone, however, is as positive about the logistics performance of the country. Stellenbosch professors Jan Havenga and Stephan Krygsman, whilst both welcoming the findings of the LPI, warned against complacency saying the country was on a treacherous path and needed to up its game. For the first time China surpassed South Africa in the LPI rankings while countries like Brazil and India significantly improved their performances.
“South Africa’s logistics costs are still rising,” said Havenga. “This is caused by high demand and inefficient supply, while the country also has real competency challenges.” According to Havenga if one looked at tonne-kilometre “productivity”, then South Africa had one of the worst in the world due to its spatial challenges. Krygsman said yet-to-be-published research was indicating that South Africa’s attempt to deliver economic growth through ongoing road infrastructure investment was not paying off.
“There are probably enough roads in this country. It is clear from our research that other factors need to be present if road infrastructure is to continue to support economic growth,” he said. Of these factors skills development and labour productivity were crucial while it was also accepted that overall infrastructure management and financing had to improve.
Havenga told FTW there was no doubt that the 2018 LPI proved South Africa’s logistics capability, but that did not eliminate existing concerns over cost and logistics efficiency.
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For the first time China surpassed South Africa in the LPI rankings. – Professor Jan Havenga
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SA scored well on timeliness, customs and border management as well as on international shipments. – Professor Lauri Ojala
