A hub and spoke approach to logistics is cutting costs and slashing emissions, says Hans Modipane, a logistics executive at SA Cargo Services. The company unpacks goods and consolidates them in Durban before distributing them inland, providing a one-stop back of port solution. “Our model requires proper warehousing and container freight station facilities where customers can consolidate their goods. Consolidation supports what the government is trying to do in terms of reducing the number of long-haul trucks on the road,” he says. To illustrate his point, he says a manufacturer based in Gauteng, which imports 100 containers a month, could, through consolidation, reduce the number of truck moves from 100 to 70. Furthermore, by consolidating goods in Durban, importers can slash container drop-off fees, while also lowering the cost of returning empty containers to the port, according to Modipane. However, he cautions that the hub and spoke business model is reliant on uninterrupted port operations. “If the port is unable to operate for any reason, it increases stock keeping times. If manufacturers don’t keep much stock and containers are delayed, they have to run trucks directly. This means warehouses lose business and companies trying to save money via the hub and spoke approach do not do so.” He says apart from reducing road freight traffic and its associated emissions, the value of the company’s hub and spoke approach lies in its boost to the local eThekwini economy and its creation of additional work for Durban-based transport operators. The company also has a learnership programme which, with the support of the Transport Education Training Authority (Teta), is able to employ about 20 school leavers annually. They receive training both in the classroom and on the job in various aspects of logistics. Modipane believes there is a need for smaller logistics players to collaborate to create scale and develop one-stop solutions. “We don’t own everything; we collaborate with other players to get containers brought to our warehouses. We also don’t own trucks, but we use subcontractors who need the business.” He argues that collaboration can work at various levels. “At a higher level, there is a need for greater industry collaboration because various industry associations don’t ordinarily talk to each other. There is a clear need for a unified voice that understands how the different role-players in logistics are affected by what goes on in the ports. The question is: How do we collaborate in such a way that benefits end-users?”
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There is a need for a unified voice that understands how the different roleplayers in logistics are affected by what goes on in the ports. – Hans Modipane