Strike and recession a two-punch whammy

The recent Transnet Strike “ain’t over ‘cause it’s over” logistics firms are noting. “I think the short term repercussion is we have got a large backlog. Hopefully you can clear that. For the long term, if strikes of this nature continue, all business is in jeopardy, not just us in logistics,” said Manie Kruger of Kwela Logistics. Noting that if their customers cannot move goods then their contracts cannot be honoured, logistics firms are concerned that the reliability of SA exporters may be compromised. “Business is very bad at the moment. The recession pays a major role obviously, because our utilisation factor comes down. But what really affects us is strikes. Transnet seriously affected us. In May it was really coming to a standstill for us. Our company has been seven years in the business and I’ve never seen anything like this,” said Kruger. Reduced use of warehousing has been one effect of the one-two punch of strike and recession. “Clients were keeping goods in storage for up to three months normally. Now they don’t store as long as they did. They bring in and take out immediately. They are looking at their cash flow situation,” Kruger said. “It’s a big part of our business, warehousing,” he said. Kwela runs a 12 000 m² warehouse in Cape Town where the firm is headquartered, and a 4000 m² facility at its Johannesburg branch office.