System suppliers feel the impact of severe business slowdown

The serious business slowdown in the SA vehicle industry has filtered down to the freight computer system suppliers, with a slowdown in demand for system development programmes. “The demand for new motor industry systems has diminished dramatically,” said Arnold Garber, chairman of Compu Clearing, “because production levels in some cases are down by as much as 40%. “The pressures on us to develop new systems faster has eased off significantly.” And, according to Garber, some of the forwarding agencies – which are Compu Clearing’s direct customer base – have been hit proportionately harder than others because of their commitment to the motor industry. “Things are down in the industry,” he said, “and the freight industry round it is similarly under severe pressure. “A year ago, it was booming – but, as an industry, it collapsed seemingly overnight.” Until this collapse, the motor industry and its service providers were completely committed to electronic systems if they wished to successfully survive. And it’s a complete dependency, according to Garber. “When you clear motor cars, for example, you can’t just say you’ve got 2 000 cars coming in, at such-and-such an individual unit value, and therefore the total shipment is valued at so much,” he told FTW. “In the auto industry, all the single, separate parts on these completely knocked-down (CKD) vehicles need their own individual line items created. “So those 2 000 vehicles landed in SA need enormous bills of entry – and an electronic system to handle these huge numbers of line items is utterly vital.” But the pressures on further streamlining the existing systems have slackened, and will only build up again when the global economies recover from the current credit crisis. Quizzed as to when this will be, Garber said: “My prediction? I just don’t know – it was so sudden.” But, at the same time, he added: “If it went down so quickly, it is my opinion that it will recover just as quickly.” The basic fundamentals in the auto industry haven’t changed, and Garber ventures that in 12-months at the most we will see the upturn coming. “So,” he said, “I expect Christmas sales in 2010 to be at record levels. But, till then, we’ll still have a problem.”