Survey warns of SA’s ‘tenous’ gateway status

South Africa’s status as the trading and logistics gateway into Africa is under threat from the likes of Nigeria, Egypt and other southern African trade corridors, Barloworld Logistics marketing executive Kate Stubbs told delegates at the Johannesburg presentation of the company’s supplychainforesight 2012 survey titled South Africa Inc: Growth, Competitiveness and the Africa Question. “The research highlighted that South African companies need to understand the threats and opportunities present for industry and the national supply chain in other African markets,” she said. The biggest constraint to South Africa’s competitiveness, according to the report, is the skills dearth, with rail inefficiency, lack of coordinated logistics strategy and cost of transport among the top concerns. On the question of which sectors of the SA economy were seen as having unique competitive advantages and why, unsuprisingly mining was in top position with 75%, while logistics and transportation scored a mere 30%, the second lowest score. A look at the article this week about the demise of DTB Cartage (see page 4) – attributed largely to the inefficient performance of Transnet Port Terminals – underscores the practical impact of this finding. Transnet general manager: corporate strategy Irvindra Naidoo however expressed surprise at this outcome. While he welcomed the findings of the survey and agreed with the need in the report to work towards common strategies “because at the end of the day we all want the same thing,” he expressed concern at the fact that transport and logistics had scored so poorly in terms of competitiveness. “That’s strange,” he said, “because we have a really highly regarded logistics industry. “Based on an annual World Bank survey of 5000 freight forwarder representatives in 155 countries – where they were asked to rate the performance of the national freight system looking at efficiency of customs processes, quality of infrastructure and the like – SA in the last survey was ranked 28. “We were the highest performing of the upper middle income countries in the world – and we tend to forget that as much as we do have problems these problems are not unique. There are a lot of countries struggling with infrastructure and skills problems,” he said. “We are well positioned to play a role as a transhipment point into the region.” While “well positioned” is not debated, one of the points made in the survey suggests that we have some way to go before we can claim to be the optimum gateway into the subcontinent. “Despite the widespread assumption that South Africa is the continent’s economic powerhouse and the supply chain and logistics gateway to sub- Saharan Africa,” said the report, “the majority of the sample felt that this position was tenuous. “Unless the country actively addresses trade competition and does something to develop trade corridors and capture market share in the southern African economic region, major competition from Mozambique and Nigeria among others will reduce the country’s market share.” Perhaps it’s time for every stakeholder to face up to this reality and start working towards solutions rather than finding excuses to justify poor performance.