‘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.