'Tighten your belts for 2016 take-off"

As the industry
contemplates one of
its toughest years ever,
logistics specialists suggest
that tightening belts and
working smarter must be
the order of the day.
Low demand from trading
partners, weak domestic
demand and anaemic
investment rates mean that
it is simply no longer enough
for logistics operators to
lower their costs, says Cobus
Rossouw, chief business
development officer for
Imperial Logistics.
“We cannot just
squeeze margins
but should look
at removing
inefficiencies from the
supply chain,” he says.
According to Rossouw,
important
aspects
such as
safety
are often put
aside in the quest
for lower costs and
higher margins.
“Getting more
kilometres out of tyres on a
vehicle f leet or less frequent
servicing for example are
ways in which transport
operators cut costs.
Instead, the focus should
be on improved efficiency –
dealing with factors such as
standing time and vehicle
utilisation – in order to
drive greater proficiency,”
says Rossouw.
Alwyn Nel, managing
director of Kingfisher
Freight Services, agrees,
pointing out that due to the
country’s poor economic
growth creditors are
already delaying payments
or reneging on
them altogether.
“There is
already a
decrease in f leet
operations with
large companies
closing depots,
reducing staff and
selling their assets,”
he says.
Nel suggests that
diversification of
services, strict cash
management and
overhead control
are key to upping efficiency
in a challenging economic
environment.
Juanita Maree, executive
director of Savino Del
Bene and alternate
director of the South
African Association
of Freight Forwarders
(Saaff), believes that the
changes in the macro
logistics scenario will see
companies re-examining
their in-house strategies
by focusing on innovation
and greater sustainability.
“This means more reliance
on data and robust
handover points between
operators, while providing
added value to the entire
supply chain,” she says.
The industry needs
to get more involved by
studying the new Acts and
regulations and proactively
tabling solutions through
positioning papers, she
says. “The private sector
has a lot to offer and
increased co-operation
between government and
the industry will bring its
own successes.”
Kate Stubbs, executive:
marketing at Barloworld
Logistics says 2016 will
be all about the industry
tightening its belt and
holding onto its braces.
“Businesses need a clear
short-term plan to be able
to deal with unexpected
events and a longer term
plan which focuses on
the collective growth
of the country and its
people,” she says, adding
that the plans should
include effective and
sustainable management
of resources and labour
relations as well as moral
responsibilities.