‘Solutions needed to optimise end-to-end supply chain’

Few disagree that sustainable
logistics solutions can only be
generated through effective
collaboration between private and
public sectors, process improvements
and structural changes.
It was the essential finding of the
sixth State of Logistics™ survey
published by the Council for Scientific
and Industrial Research (CSIR),
IMPERIAL Logistics and Stellenbosch
University last year.
The survey, which breaks down
logistics costs in SA into transport
costs, inventory carrying costs, storage
and port costs, and management
and administration costs, found that
although South Africa saw an increase
of 6.9% in logistics costs compared
to the previous year’s R317 billion,
2008 costs were at their lowest since
2004, totalling R339 billion or 14.7%
of GDP. However, when compared to
other countries’ logistics costs, e.g. the
USA’s 9.4% (2008), domestic costs
remained too high.
During 2008, the recessionary global
oil price positively impacted industry
costs, whereas South Africa’s higherthan-
normal transport demand and
poor network configuration, rising bad
road conditions, radically increased
storage and inventory costs, need for
increased funding to bolster capacity
and consistently increasing road
corridor traffic had a negative effect.
The percentage decrease of bad
to very bad national roads over a 10
year period from 1998 to 2008 varies
from 7% to 9% and on secondary
roads from 8% to 20% with significant
deliveries routed via this road network.
The deterioration of road quality can
and will lead to drastic increases in
vehicle maintenance and repair costs
– higher product and logistics costs
– unless addressed adequately and
quickly, according to the survey.
The survey was introduced in 2004
and aims to provide a comprehensive
picture of the state of logistics in
South Africa.