Shifting market trends demand pliable supply chain

In the face of production disruption due to strikes, continued weakness in Europe, and growing direct imports into the African market, it is in the power of the logistics value chain – and most importantly Transnet – to position South Africa as the gateway to the African market. If we don’t get that right then it will be a very rocky downhill road for the local industry, says FTW’s Ed Richardson. Far-reaching changes in the global auto market will continue to challenge the South African logistics supply chain. Shifts in consumer buying patterns and the emergence of new markets are creating both challenges and opportunities for logistics and transport suppliers. An example is the growing demand for larger sport utility vehicles (SUVs) in Brics countries at a time when motorists in the United States, Europe, Japan and Australia are scaling down, according to the 2013 KPMG Global Automotive Executive Survey. SUVs are the fastestgrowing segment in the Chinese market, and multinational companies are scrabbling to build capacity in China to meet the demand. “With demand for vehicles declining in most mature markets in the face of the global recession, high fuel costs and urban driving restrictions, the industry is turning its attention even more strongly towards the expanding middle classes in the new powerhouses of China, India, Brazil, Russia and other growing nations,” says the report. At the same time the emergence of mega-cities and rapid urbanisation are forcing original equipment manufacturers to produce more environmentally friendly and connected vehicles and to explore concepts such as shared mobility rather than ownership. This model, rather like the bicycles in Amsterdam and other cities, will see commuters paying for the use of a vehicle rather than owning it. Logistics challenges will include ensuring that sufficient vehicles are available at the different parking stations around the city. “Together these forces add considerable complexity to OEMs’ business models,” the report said. CAPTION The Port of Durban ... driving for growth.